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