Lumber pricing. Returning to normal?

  It has been a tumultuous 24 months.  The headlines of price spikes and supply chain issues are everywhere.   The idea that lumber pricing would ever come back down from the stratosphere was a bit of a dream.  Most doubted it could last, but in such an unprecedented time, who knew?  Perhaps now turning the COVID corner, I have some good news, lumber prices have fallen.  Drastically so.  But to so many of us right under our noses.  

  It's one of the most frequent questions I still get asked, "when are lumber prices coming back down?".   The answer is both good and bad.  The good news is that lumber prices have dropped precipitously over the past 6 months.  In fact, in many of my projects saving the customer $30K, $40K, even $50k in lumber prices over the last few months.  (We put a de-escalation/escalation clause in our agreement for our customer so if lumber prices go down, they receive that savings.)  At the time of this writing Home Depot 3/4" OSB plywood is $54 a sheet.  While, at last writing was over $80.  Similarly, 7/16" OSB is $18 a sheet, down by a larger percentage during the same time frame.  A huge price reduction from months prior.  This is fantastic.  But why doesn't it feel so fantastic?  

   The second part of my answer is the bad news.   Why this is going largely undetected is due to so many other housing materials climbing fast.  Cabinets (25%+), insulation (15%+), drywall (18%+), pool shells (20%+), electrical wire (100%+) and unfortunately just about everything else has gone up too.  To compound the materials issue labor is scarce as ever.  Whether it's government, generational, or seasonally related, there isn't the labor force to get the work done.  Although this is true nationally it is especially dire on the Outer Banks.  People in the field 40 and 50 years have never seen anything like it.  Price spikes, labor shortages, and large (understatement) demand all erasing the overall effect of reduced lumber costs.  

  So here we are at the end of 2021.  Lumber prices are back down to agreeable levels, at least for the moment, and we can exhale.  Now as manufacturing plants and supply chains open up, we wait for other building materials to stabilize and return to pre-pandemic levels.   The choppy environment continues.  Navigating these waters can be challenging.  We are here to help you get through it.    

-Austin Kelly

Croatan Custom Homes

Soaring Building Costs and the Outer Banks.

Soaring building costs have been front-page news for more than a year.  One doesn’t need to be planning a remodel or designing a new home to be aware of such things.  My mother-in-law (who is pretty savvy I will add), said “Austin, did you know that Home Depot’s ¾” plywood is up from $35 a sheet a year ago to over $90 today!”  The pricing of lumber and building material has been causing concern and disruption in our sector since the start of COVID.  The following sheds light on some of the various factors effecting the industry’s current climate.

  To start I don’t believe the price increases are necessarily a nefarious price gouge from some powerful executives.   Although some greed may have had a part in this.  I believe it’s simpler, and goes back to age-old economic principles of Supply and Demand. 

   When COVID-19 was just starting and the country was unsure about the normalcy of the everyday life, lumber mills and plants slowed or shut down expecting a decline in demand of their goods (and in protection of their people’s health).  This was the first factor and start of issues, turning off the supply spicket.  Reduced inventory. 

  Shelter-in-place and quarantining lead to extra time at home.  That time we had staring at our outdated kitchens or undersized family rooms sparked us to action.  We called contractors and the DIY’s took Home Depot and Lowes by storm.  As the demand increased, the mills tried to open and increase supply to meet demands, but COVID was indirectly or directly keeping the producers closed or at reduced capacity.  Demand large and Supply small.   

   A client asked if we could replace the high cost of Southern Yellow Pine (SYP) with Spruce or Fur.  On the surface it made sense.  The idea of replacing a good with a like good.  AKA a substitute good.  The market reacts quickly and puts the same constraints and conditions on those substitute goods quickly evening the playing field.  In this example the other wood species pricing caught up almost instantly.  Furthermore, as the country imported more goods, the tariffs added additional cost to the already scarce products. 

  On a local level it’s more extreme.  Many of us have never seen anything like the growth we have experienced in the last 12-18 months.  The movement started before COVID and accelerated with it.   COVID restrictions spawned the home place as the new work place.  It opened many people’s eyes to working remotely.   If we can work at home, why not work at the beach?   Even if moving fulltime to the Outer Banks is out of the question many wanted the option to come stay at their own place and take advantage of the strong rental market the rest of the year.   These factors on top of the already strong and healthy building economy of the OBX put further demand on the already stressed work force. 

  The Outer Banks is not only unique in its beauty, but in its geography and how that effects the labor force.  Our economy is slowly shifting to a more year-round one, but it’s still lacking.  Our industry is less ranging drawing fewer potential applicants to the area.  We have very limited access to workers.  The increased labor demand and reduced supply of workers add to the increasing home costs.    

  Returning to a national component, interest rates are historically low.  Many have planned their retirement home, or investment home, for years and want to take advantage of the cheaper money.  An investment banker I am working with believes today’s rates will outweigh today's building cost in the long run and is choosing to build now.  More demand.

  The full extent of the Pandemic and how it will affect the building industry is still unknown.  As we attempt to turn the corner and return to normalcy there have been signs of stabilization, thankfully increasing signs.  However, in my opinion, until the supply of building materials (specifically lumber) equals or exceeds its demand, prices and building costs will remain high.

FEMA, Flood Zones, and Building Implications

    If you’ve vacationed on the Outer Banks you most likely have seen elements of flooding.  It’s something we’ve come to expect and deal with.   “Dealing with” includes paying flood insurance if you are in a designated flood plain.  The Federal Emergency Management Agency, FEMA, has revised their flood maps affecting the Outer Bank.  The result is an overall reduction in flooding areas.  Which resulted in a reduction in insurance costs, to many it was a welcomed change.  However, many townships have tightened their building requirements to combat the overcorrection by FEMA.   Below is an overview of flood zone types, terminology, and building implications regarding flood areas and the Outer Banks.

  When it comes to flood plains the Outer Banks has 3 main zones; AE, X, and VE with some variations.  The areas are defined through FEMA and periodically reexamined (approximately every 10 years).  The flood zones are delineated on “FIRMS”, Flood Insurance Rate Maps, which can be found online.  Townships and Counties also have mapping available however confirmation of the parcel is prudent.  The AE zone is a Special Flood Hazard Area(s), SHFA.  The VE zone is a high wind zone.  AE and VE zones are FEMA required flood insurance areas.  X zones are outside the SHFAs and not mandated to have flood insurance.  X flood zones are coveted on the Outer Banks.    

  Base Flood Elevation, BFE, is an important benchmark used by FEMA in identifying these areas.  It is the elevation at which a flood has a 1% chance of exceeding the rainfall for a given year.   Said another way, a flood line that has a 1% chance of happening this year.  The BFE is derived from MSL, Mean Sea Level and measured from “NAVD”, The North America Vertical Datum of 1988.  You will see “NAVD” stated on many surveys.  Lending institutions and Insurance companies will require an Elevation Certificate (EC) prepared by a licensed surveyor for the lot or property.  The certificate identifies many elevations of your home (or proposed home) including the lowest horizontal framing member, lowest mechanical unit elevation, and floor elevation of heated space as well as unheated storage areas.   These factors affect insurance rates and buildability.

    When planning your home, townships will have their requirements regarding elevations.  In fact, their elevation standards can be are more stringent than FEMA’s.  Some areas may be out of a SHFA, but the town mandates a “local elevation standard” or LES.  The building will need to meet the standards of the township and FEMA.  For example, a home’s lowest building member is required to be above BFE, Base Flood Elevation.  The distance above BFE is called “freeboard”.  Township’s freeboard varies, but is usually 1-2 feet.  A lot with a BFE of 7’ and a 2’ freeboard would need to have its lowest horizonal framing member no lower than 9’ AND be in congruence with the townships LES.  It can require some investigation.    

   When planning your purchase or build on the Outer Banks take time and remember each flood zone and township has its own characteristics and requirements.  It can be complex.  Feel free to reach out for assistance through the process.  It’s research that’s worth doing and we’re happy to help.      

The Andersen 100 Series Window: Revisited

  Some time has passed since my post on the Andersen 100 Series window.  During that time, I’ve had the opportunity to use them.  A homeowner had a specific want and need then decided on the Andersen 100 which seemed a prudent decision.  And let me say the windows are beautiful.  A work of art really.  The design, and precision are similar to a fine German automobile. 

  Firstly, the windows come thoroughly packaged for shipping.  Not a long-term factor, however perhaps maybe they are.  Andersen seems to care about every aspect.  Secondly, they are heavy as heck.  This can be sign of quality.  Of course, heavy isn’t always a good thing, but with the 100 series it’s apparent.  Next, the tracks and sliding of the window goes back to that whole German automobile thing.  The nailing flanges are strong and crisp at a 90-degree angle.  Lastly, the black finish on the inside and out is striking.  The mat finish appears to be very durable.  And if you remember, the “Fibrex” does not act as wood and will not rot like other Andersen windows making it an exciting creation.  (Our installer was very impressed with them too.)  On a side note, due to the brand and size these windows are 2 times the cost of a “average window”.   I believe many would say money well spent.   

  In an effort to be one of the best builders on the beach I’m always asking questions to the guys behind the lines.  Bill Smith (not his real name) who works for one of the biggest window suppliers on the beach said “I don’t believe there is a difference between vinyl windows.”  What?! I thought.  To Bill, what makes a vinyl window great is the customer service and warranty.  By that standard “Andersen and Pella are the top” he said.  When I asked him his favorite all around non-vinyl window, he said, “Andersen.”  In light of my recent experience, I can see why. 

  The Andersen 100 windows are located on a home we’re building on Sea Oats in Southern Shores.  If you’d like to come take a look before end of construction feel free to contact me and I’m happy to show you around.   

Structural Panels – Part II

                An additional panel sheathing that was not discussed last month – Huber Zip System.   It is new to the industry and standing out due to its advancements and step saving properties. 

                Zip panels are OSB wall and roof panels with upgrades.  The OSB is constructed with more resin content and a “facer”, the face is impregnated with a mesh material and latex paint (usually green which makes them easily recognizable.)  “Why?” you ask.  To save steps and improve efficiencies. 

                Years ago, siding boards were covered with rosin paper.  As the building industry advanced, we coated the rosin paper with tar, alas tar paper.  The next evolution was Tyvek, it controlled against water as tar paper did, but also could be taped to control air passage.  It controls the passage of air AND water.  Finally, Huber’s Zip system emerged in which the OSB panels and tape system create an air and water control WITHOUT the need for tarpaper, Tyvek, or other rolled substrate.  The additional step is redundant since the facer makes the panel waterproof and the tape give air and water control. 

                This innovation is worth noting for two reasons.  The first, in home building efficiency (both in construction and performance) is critical.  If a home builder can construct a house faster that performs better (for a similar cost*) than it’s a win.  Second, since it’s a big improvement to OSB, the industry will not hold their noses over its use and may actually come to prefer it to CDX.  It caught This Old House’s attention and it’s been featured on the program.   That is a big step for an OSB product.   Making this structural panel alternative potentially the best for many homes. 

*At time of this post Zip is approximately the same price as CDX (which is almost twice the cost of OSB).

Structural Panels: OSB vs Plywood

Which is better, OSB or CDX?  It’s a question that is often asked and hastily answered.  The reference point of the one answering is as important as their answer.  It most often comes down to background and personal preference, not facts or statistics.  This post will identify the pros and cons, characteristics, and studies of OSB and CDX.

You don’t have a to an expert in the industry to tell the difference between the two products so we’ll keep it simple.  OSB, Oriented Strand Board, is composed of chips pressed together with resin.  CDX is what many people consider “real plywood” and is 3-to-8 thin plies of wood layered to form one sheet.  The composition of the product effects its performance.      

Characteristics:

OSB – OSB is machine regulated and very consistent.  More so than CDX.  It doesn’t have the inconsistent layers, knots, or defects.  It is denser.  This is a main argument for its uses as decking material for your home.  You don’t get the weak parts of a sheet which causes “give” or the squeaks that occur over time.  

   -It typically has higher shear rating making it a good choice for walls. 

   -Can be manufactured in 9’ or 10’ panels to better tie in the floor boxes.

   -OSB also absorbs water at a lesser rate.  Which has advantages. 

   Unfortunately, the flip side is it actually holds onto moisture longer.  In the past there have been issues with the sides swelling due to this absorption (and OSB has issues with returning to original thickness once the moisture evaporates).  This was once a larger concern than it is today.  Massive complaints have driven manufactures to improve the process and change this.     

CDX – CDX dries out faster.  Meaning it is less susceptible to rot.  It can and should be used as underlayment for tile or flooring.  Although OSB can still be used, it must be thicker material to acquire the same rating.  Dampness may cause swelling and separation causing poor adhesion.  Additionally, the flooring contractors I use do not recommend OSB as an underlayment.   

The durability of CDX has made it a favorite of many for roof applications.  The idea is it doesn’t show the “ghost lines” or waviness that OSB sheets had once shown on roofs.   

Similarities

When it comes to wall sheathing OSB and CDX are equal in regard to “nail holding and rack resistance” according to Kevin Chung an engineer for Western Wood Product Association.   On average OSB is 7% less stiff than CDX, however, OSB is stronger than CDX in shear according to a study done by University of Massachusetts.  Additionally, when the APA, The Engineered Wood Association, rate plywood, it rates them as equivalents.  (As they rate spans, not whether it’s OSB or CDX.)  With all that said, many users are beholden to their product.  From my experience and research, you can find one study that gives OSB the advantage and then another that gives CDX the advantage.  With data that is very close. 

Price

When it comes to price, OSB is a clear winner.  It is almost always more affordable than CDX.  At time of this post OSB is approximately 25% less per sheet. 

As you can see these products have their advantages.  People have their opinions, including myself, and love to voice them, but in my research, one is not far and away superior.  Studies and tests prove, they each have their strengths and are generally equivalents. 



New and Improved Andersen - 100 Series

New Andersen 100 Series

   The gentlemen at Andersen came down and put on a “lunch and learn” to promote the Andersen 100 Series Line.  The truth is, it was very hard for me to stay open for one simple reason, I don’t like Andersen.  That’s right.  In fact, I feel stronger and more negative than that.   People love the idea of Andersen and the status symbol, but I’ve seen the other side.  I’ve changed plenty of windows on the Outer Banks and Andersen just don’t cut it.  In Andersen’s defense wood windows in general don’t work here.  So for that reason I WAS interested in their sales pitch to see if they could win me over.   This is what I found. 

  The 100 Series Andersen line is a step in the right direction -it’s not wood.  It’s Andersen’s patented “Fibrex” material which they say is 2x stronger than vinyl.  It’s a composite of about 40% wood filler and 60% polymer.  Apparently, it has over 30 patents and 12 x thicker finish than painted vinyl.  An eyebrow raising start.

  To continue, like a wood window, you can have more than just a “white” appearance, both inside and out.  Andersen offers Sandstone, Terratone, Dark Bronze, Black and White for exterior colors and Sandstone, Dark Bronze, Black, and White for interior colors.  It’s my understanding that the color is part of the polymer which is a big advantage.  Many of the existing colored vinyl windows on the market today don’t hold up in this harsh environment.  They scratch or mar leaving a white or different color below.  So Andersen is jumping into non-wood windows with both feet and setting themselves apart. 

  A few notables….

  -The window hardware is also offered in a low-grade stainless option or can be upgraded to a Corrosion Resistant hardware.  A great option and critical for the Outer Banks.

- Although not a deal breaker for many, the 100 series is only offered in Single Hung (only the bottom sash operates and no tilt-in washing for top sash.)

 - From an environmental standpoint, Andersen is a Green Seal Certified manufacturer with “98% of the material that goes in through the front door comes out the through back door” according to their rep, leaving little waste for mother earth. 

  Is Andersen my new favorite window company?  No.  However, they are moving in the right direction.   Where before I wouldn’t consider putting Andersen in one of my homes, now, in the right scenario, I would.   Specifically, if a colored window is at the top of a client’s list due to exterior design preferences and they don’t care for double hung sashes.   If you are more interested in the Andersen 100 Series or window options on your custom home give us a call and we’ll be happy to explore your possibilities. 

House Wrap vs Air Barrier

*Code Update*

Energy Efficiency Provisions for Building Thermal Envelope – House Wrap vs Air Barrier

Did I lose you already? I know, I know, not the most riveting post topic. But the idea is to inform you on the differences of the two and how the code update affects them.  This year the question was posed to the North Carolina Energy Conservation Code committee “must house wrap material be rated as an air barrier material?”  After some deliberation they have weighed in. 

I try to aim my posts towards homebuyers/owners and their interests -without getting too technical. Admittedly, this post may be a bit technical. With that said, this is an overview of a very complex topic.  We must understand (1) what they are, (2) how they act, and (3) how the committee updated the energy conservation code.

 What Are They?

House wrap.  Usually a synthetic rolled barrier between the house sheathing and the siding.  It's used to prevent water or driven rain from entering the wall assembly.  It also allows for moisture trapped, water vapor, in the wall assembly to pass to the exterior.  Ex.  Barricade or Tyvek.  House wraps are often considered moisture barriers.
Air barrier.  The ICC defines as "Materials assembled and joined together to provide a barrier to air leakage through the building."  It may be a single material or combination of materials.   Ex Drywall, insulation, and/or plywood with taped seams.  House wrap CAN be Included in this category (keep reading).  More specifically to be a good air barrier it must stop air flow, be continuous, and be durable. 

 How They Act

                Things can get confusing since the names sound similar.  Also, there are different names for these different components and which can perform more than one function.  For example, House wrap by itself is not an air barrier, it is a vapor barrier.  However, IF installed properly, which is rare, with taped seams, bottom, top edges, and no tears, it acts as an air barrier.  So primarily it acts as a vapor barrier, but installed properly can do both; vapor barrier and air barrier. 

                To take it one level deeper, a contractor might use tarpaper (a moisture barrier) between his sheathing and siding, tape his plywood seam (air barrier), and utilize kraft-faced insulation (vapor barrier AND air barrier if properly installed), to help maximize energy efficiency and moisture control.

 Code Update

                The question that sparked this post was “does the 2018 NC Energy Conservation Code require that house wrap be rated as an air barrier material?”  And the answer is NO.  House wrap material does not need to be an air barrier, BUT the product used must be installed to manufacture specs (which most likely includes sealed joints and seams).   Furthermore, the material itself is not affected by the NC Energy Conservation Code (as long as approved by NC Building Code and Residential Code), but the installation is.   

  A lot of technical stuff?  Yes.  But the bottom line is to make sure the builder of your future home knows and understands these distinctions.  Many builders can build a house "to code", but knowing why and improving the end product is the kind of builder you deserve.  Croatan Custom Homes strives to stay on the leading edge to deliver you a quality home that will be a sound investment for generations. 

LP SmartSide Trim & Siding

 As a home builder on the Outer Banks with all the harsh weather conditions I’m often asked, “which siding (product) do you use?”, which is then inevitably followed up with “why?”.   While many siding products have their strengths, this blog will identify some compelling reasons as to why LP SmartSiding is at the top of the pack.      

     A local supplier in town, Kempsville, periodically puts on a tradeshow to educate contractors and subs on the latest products and industry innovations.  The events are two pronged, (1) why the contractor should use it (how easy or time savings standpoint) and (2) why is it better for the homeowner.  I went in search of educating the homeowner on its benefits. 

    The advantages for the HOMEOWNER are below and worth noting.  

 LP’s “Smart Guard Process” - This revolutionary product protects your home against rot, termite and fungal decay.  The proprietary 4 components of protection include; resins, waxes, zinc, and overlay.  This Smart Guard Process protects from the inside out, and with a composite product that is critical.  The aggregate pieces are covered in wax (water protection) and zinc borate (pest protection) along with resin (adhesion).  Each piece within the wood, or chip, is protected.  Then the entire product is soaked and bonded with a resin overlay creating a tough saturated product which far exceeds the characteristics of conventional siding.  True synergy- the whole is greater than the sum of its parts.

Strength, Durability, and Impact Resistance - It takes about one hurricane on the outer banks to start to understand the extent of mother nature’s power… her wind is formidable and nothing to take lightly.  Because of this, wind protection is something I obsess over.  When I heard SmartSiding is designed to withstand tough storms with wind gusts up to 200 miles per hour I took notice.  Incorporating siding with design strength that adds another layer of wind protection to the home’s frame helps the owner (and the builder) sleep better.  Additionally, the product is more resistant to hail and airborne debris than most other siding used on the beach. The warranty covers hail up to 1.75" diameter. 

Industry Leading Warranty -   The 5/50 Year Limited Warranty is nothing to glaze over and will give you peace of mind for decades to come.  The product is covered with a 100% labor and material replacement (Installed to specs) for the first 5 years, and then a prorated limited warranty over the next 50 year….. which is TRANSFERABLE to the next owner.  (Full disclosure, the installation obviously must be done per specs, including painting uncaulked edges as well as 3/16" gap between seams, but those details are for another post.

   LP Smartsiding is the siding of choice for Croatan Custom Homes and will protect your home today, and for years to come.  The next time you are contemplating exterior siding, keep these 3 benefits in mind, they are hard to beat.  

  If you have questions about siding a new house, or how your current siding holds up, I would be happy to talk with you in more detail.  Call or text today to set up an appointment.