According to the National Association of Realtors, the price of lumber isn’t getting better. It’s a bit of a dour note to open on, but that’s the situation. A combination of Covid restrictions shutting down lumber mills and extensive fires destroying prime lumber land has left the supply of wood cripplingly small. At the same time, the number of people looking to use the extra time spent home to complete DIY projects, or extend their home created an unprecedented supply. As a result, the price of lumber is increasing in 2021 yet again.
What Is Anyone Doing About The Lumber Price Hike?
There isn’t really too much that can be done, unfortunately. The demand is super high, the supply cannot meet it. Currently, the lumber industry is lobbying the president to ease tariffs on import lumber from Canada to get us more supply, but that will take time and the president has other priorities beyond just helping people get wood. For the time being, the price hike is inevitable. I wouldn’t count on it going back to normal either; there’s nothing like a good crisis to give industries an excuse to permanently raise prices. Market forces will inevitably drive the prices down, but I would expect things will never go to pre-2020 levels again.
Who’s Still Buying?
Well, that is the question, isn’t it? Before, it was people who were looking to upgrade their homes because they had nothing else to do with all their time. Now, however, it looks like people are trying to buy before the price gets any higher. This leads to even more increased demand, which further lowers the supply and it’s become the lumber industry’s dream turned nightmare – they have no choice to raise their prices, but they can’t sell enough to profit from those prices.
It’s not just home upgrades either. According to Cache Valley Sheds, a company that sells prefabricated sheds in Cache Valley, Utah, sheds are still selling. Companies like Cache Valley Sheds go through suppliers who get bulk discounts and thus are able to lower the prices a little bit.
It’s easy to think that the best option is to just stop buying and reduce the demand. That might not be for the best, either. If the demand suddenly bottoms out, that could cause the reverse problem, where prices start dropping to the point where they crash the companies after all the hard work and expense they’ve gone to trying to get their supply. How do we navigate this situation?
Well, there are some options.
1. Buy Now If There Is Need
Obviously, there needs to be some reduction in demand. So, one option to consider is to only buy if there’s a need for it. Sometimes, there’s just nothing for it. If you need to repair or upgrade something to meet an actual need, that’s what you’ve got to do. Buying now would be necessary to lock in the current prices. This is what suppliers are encouraging.
2. Consider Alternative Building Materials
Wood isn’t the only building material being surcharged. We’re also seeing it for metals as well. These aren’t the only building materials out there, though. Consider other options. Bricks, for example. It was good enough for the smart little pig. There’s also ICF (insulated concrete forms). These are slabs of concrete with internal supports. The insulation makes them energy efficient as well as easy to install and they can replace most of the wood used in support walls. They have many other benefits, but with the drawback that they’re much harder to remodel with once installed.
There’s also reclaimed wood. Look for companies willing to work with reclaimed wood to cut down on the demand for new lumber. It will save you some money, let the lumber industry have a break to rebuild their supply, and might just be cheaper than getting new lumber.
3. Put Pressure on Congress
This might seem like a long-shot, but there’s good justification for it. Housing demands hit record highs every 14 years, according to Fortune. They predict there’s going to be a demand for more housing in December. While the Covid pandemic might possibly be slowing down, it’s anybody’s guess whether or not it’s going to end over the summer. If it’s going come December, we’re going to be needing a supply that isn’t there. Congress has the power to ease the tariffs on lumber from Canada and that would help us cover the supply needs more. Combining this with using more reclaimed wood and other alternative building materials can help us avoid the housing problem that looms over us now. The only problem is congress can only act if they know there’s a problem – and enough people care about the problem to force them to get off their lazy butts and do something.
Time To Consider Need
The supply cannot meet the pace of demand, that’s a simple fact. The solution is not so simple. What needs to happen is for the situation to normalize. Demand must decrease to a level the supply can support, and the supply needs to increase. The supply is outside the hands of regular people – aside from attempting to pressure the government – but the demand can’t simply disappear.
That means it’s on us to consider our actual needs. If we can do without the DIY projects that, let’s face it, we’ve been ignoring for years already, it might be a good idea to pass on them again. If you can’t pass on it, however, now is definitely the time to buy in if you want to lock in the price before the next big price hike hits. Even so, consider your needs. You might not need as much as you think you do. Talk with your construction teams and sellers about what your needs are. They can help you work the project to meet your needs while minimizing the amount of lumber you use.
This situation won’t be easy to navigate, but with careful planning, we can help minimize the price hikes. We just have to know what our options are before we rush into it.