Dang! Wood is expensive these days...

Read last night that the timber industry was in a 12-year lull of historically low demand, partially due to the Great Recession. Sawmills had shut down, workers were laid off, forests were going unharvested, nobody was making money on timber. So the market was in a period of low supply that met the low demand. Then the pandemic happened, some people were home with time on their hands, and started wanting wood for projects and remodeling. Demand went way up, supply couldn't keep up (it takes two years to open a sawmill to turn timber into lumber) prices shot up, and then things got even worse when speculators starting buying supplies up because suddenly there was stoopid money to be had if you had lumber to sell. I wouldn't discount the effects of people getting sent checks either, since it gave them money to spend on projects needing wood, and yeah, why work a crappy job if the government's sending enough money to squeeze by on?

Perfect storm.
 
Read last night that the timber industry was in a 12-year lull of historically low demand, partially due to the Great Recession. Sawmills had shut down, workers were laid off, forests were going unharvested, nobody was making money on timber. So the market was in a period of low supply that met the low demand. Then the pandemic happened, some people were home with time on their hands, and started wanting wood for projects and remodeling. Demand went way up, supply couldn't keep up (it takes two years to open a sawmill to turn timber into lumber) prices shot up, and then things got even worse when speculators starting buying supplies up because suddenly there was stoopid money to be had if you had lumber to sell. I wouldn't discount the effects of people getting sent checks either, since it gave them money to spend on projects needing wood, and yeah, why work a crappy job if the government's sending enough money to squeeze by on?

Perfect storm.
It will probably get worse once inflation starts kicking in. You can't print and borrow this much money into an economy and not not get inflationary effects.
 
Read last night that the timber industry was in a 12-year lull of historically low demand, partially due to the Great Recession. Sawmills had shut down, workers were laid off, forests were going unharvested, nobody was making money on timber. So the market was in a period of low supply that met the low demand. Then the pandemic happened, some people were home with time on their hands, and started wanting wood for projects and remodeling. Demand went way up, supply couldn't keep up (it takes two years to open a sawmill to turn timber into lumber) prices shot up, and then things got even worse when speculators starting buying supplies up because suddenly there was stoopid money to be had if you had lumber to sell. I wouldn't discount the effects of people getting sent checks either, since it gave them money to spend on projects needing wood, and yeah, why work a crappy job if the government's sending enough money to squeeze by on?

Perfect storm.

That makes the most sense.... to me. I am betting we will see similar
impacts in other areas, like the food supply and distribution network.
With the loss of demand in the restaurant industry there was a glut of supply.
That tightened, though, as suppliers cut back. Now that things are ramping
up again will their be a lack of supply and a rise in prices as a result??

Lots of unintended consequences from the impact of closures and disruptions
due to the pandemic. And it isn't over yet by no means as it wreaks havoc in
new places now. :(
 
It will probably get worse once inflation starts kicking in. You can't print and borrow this much money into an economy and not not get inflationary effects.

Yet the econocritters seem to believe inflation won't be that bad. Which in my book means it's fixing to bite us in the butt. Hard. Because "we" took our eyes off it.
 
Yet the econocritters seem to believe inflation won't be that bad. Which in my book means it's fixing to bite us in the butt. Hard. Because "we" took our eyes off it.
It's human nature I guess. We haven't had massive inflation for a long time. So we've forgotten what its like and the longer its absent, the more the people in charge think they will get away with it. Kinda like how the banks thought maybe we don't need as much money in the bank to create new loans. Maybe only 5% of all our loans have to be covered with savings accounts. Maybe 4.5%? 4%? 3%? 2%? None?

When things go good we like to think it will always be this good. I reckon its a survival mechanism that nature built into us to be overconfident in our abilities. Because if we were realistic we might have never gotten out of our caves in the first place.
 
I'm just looking at the Gold/Lumber ratio:

https://www.grufity.com/historical-data-chart-graph/GOLD.LUMBER/Gold-to-Lumber-Ratio

Not sure how much harder Lumber can rally at this point in time. I'll say it'll start to reverse once 0.8-0.9 is hit...

It seems like too many people blindly bought houses due to the very low interest rates and a fed rate spike would force the less intelligent among them to foreclose on their homes in a few years. I'm sure the good folks at Goldman Sachs, Fannie Mae, Wells Fargo etc. already started to structure these mortgages into credit risk tranches that they can sell to gullible pension funds etc. I can somehow see 2007/2008 happening all over again....

Look at those Home Price Index Gains since 2008:

https://fred.stlouisfed.org/series/SPCS20RSA
 
Given there has been regulation allowing for no evictions for well over a year or more if/when those regulations are lifted I’m sure the housing supply will get a huge influx of inventory
 
These wood prices are a bummer. We are building a stem wall for are new house now and the lumber prices are really going to hurt the budget.
i was hoping it might get better but that’s not looking good.

We have been living in our 5th wheel since Hurricane Michael wrecked our house.
High wood prices are the last thing we need. Seems like nothing but bad luck things have got to get better...
 
Read last night that the timber industry was in a 12-year lull of historically low demand, partially due to the Great Recession. Sawmills had shut down, workers were laid off, forests were going unharvested, nobody was making money on timber. So the market was in a period of low supply that met the low demand. Then the pandemic happened, some people were home with time on their hands, and started wanting wood for projects and remodeling. Demand went way up, supply couldn't keep up (it takes two years to open a sawmill to turn timber into lumber) prices shot up, and then things got even worse when speculators starting buying supplies up because suddenly there was stoopid money to be had if you had lumber to sell. I wouldn't discount the effects of people getting sent checks either, since it gave them money to spend on projects needing wood, and yeah, why work a crappy job if the government's sending enough money to squeeze by on?

Perfect storm.
Uh no. Like I said earlier there is no drop in supply. The sawmill here was never shut down.

Demand has exploded with new home buying and building. Using the excuse of a labor shortage in logistics, this is pure price gouging, plain and simple.
 

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Uh no. Like I said earlier there is no drop in supply. The sawmill here was never shut down.

Demand has exploded with new home buying and building. Using the excuse of a labor shortage in logistics, this is pure price gouging, plain and simple.
It’s not that simple. The problem varies from region to region. In the south, there is plenty of timber, but there are distribution problems. In the northwest, timber is in short supply. The pandemic is at the root of the problem, but the way it is manifested varies.
 
Uh no. Like I said earlier there is no drop in supply. The sawmill here was never shut down.

Demand has exploded with new home buying and building. Using the excuse of a labor shortage in logistics, this is pure price gouging, plain and simple.

No doubt demand has exploded. I think there's better supply in the southeast, and maybe some stockpiling in pockets where the supply is good. Is that where you are?

There's lots of wood to be cut, but apparently a shortage of wherewithal to turn trees into timber into lumber.
 
The lumber yards are stocked here in north west Florida. There saying its because they don’t have enough workers to process all the trees.
They showed over stock in trees and not enough workers to process.

All I know is we’re going to get screwed on the prices building a home Ugh!
We have been in a camper for almost 3 years and we want out.

Hurricanes, insurance companies, Pandemic, now this I can’t take anymore new normals for us....
 
We wanted to start building but our insurance company was saying that Hurricane Michael didn’t do all the damage to are house.
Now we are having to deal with the lumber prices what a nightmare.

We just settled 2 1/2 years later with the insurance company. We are having a stem wall foundation built now.
 
All I know is we’re going to get screwed on the prices building a home Ugh!
I got a guy staying with me while he looks for a house. My house was built in June and I bought it in October for what I think is a good price. The market was dead at that moment, so I made out. He showed up to work in our company in January and the housing market has absolutely blown up. Completely unexpected, totally off-cycle, makes no sense. Just a total seller's market right now. The house the developer just finished is a model that they did for $330K and they're listing the same exact spec house for $360K and they're blaming it on the lumber prices, which - if they're buying matarials and building on spec starting in December/January - seems like an outright lie.

It's just a lot of people cashing in on BS.
 
I got a guy staying with me while he looks for a house. My house was built in June and I bought it in October for what I think is a good price. The market was dead at that moment, so I made out. He showed up to work in our company in January and the housing market has absolutely blown up. Completely unexpected, totally off-cycle, makes no sense. Just a total seller's market right now. The house the developer just finished is a model that they did for $330K and they're listing the same exact spec house for $360K and they're blaming it on the lumber prices, which - if they're buying matarials and building on spec starting in December/January - seems like an outright lie.

It's just a lot of people cashing in on BS.
It totally is BS for sure building here in the panhandle of Florida is crazy because there was so much destruction from Hurricane Michael Oct 2018.
we had a quote and it was right at 330k also and the lumber yards are full I don’t get it.
 
I started building a new house 3-4 years ago. I saw the writing on the wall and purchased all the lumber up front.
...inked a contract on a house last year....9 months in and:
1) house i bought is now going for ~12-15% higher
2) house i’m selling is now ~10% higher
3) there are no homes for sale in my sub-division
4) there are no homes for sale in my new sub-division
...I’ve not seen this type of market before !
 
I've always had the impression that a lot of homes in the US are made of wood, whereas over here in the Netherlands the vast majority are made from brick. Actual wooden homes are quite rare here. If true, why is that the case? I've always wondered about that.
 
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