It'll return to previous prices. Lumber supply is, for all practical purposes, fixed. Demand will taper off, prices will return.
D
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Fixed supply and high demand. It's easy to say that demand will taper off. But that's hardly going off a cliff has
@Hauler describes.This isn't a bubble. We have a massive housing shortage in our country and it will take a couple years for us to get that demand met Even intentionally trying starting now.
Yes prices will taper off but That's a minimal consequence if you don't have a timeline of what that means. Prices will stabilize but I don't see any reason to think they would go back to previous prices for 2 to 3 years... Short of a USA economic crisis that crashes housing demand overnight. Our baseline housing need keeps demand well above supply due to so little building over the last 12 years.
Demand will fall off a cliff. The demand hasn't risen due to new home building, that too is fairly static. The demand has risen due to people doing renovations and other shit because they're at home, bored and have money to spend. AsFixed supply and high demand. It's easy to say that demand will taper off. But that's hardly going off a cliff has
This isn't a bubble. We have a massive housing shortage in our country and it will take a couple years for us to get that demand met Even intentionally trying starting now.
Yes prices will taper off but That's a minimal consequence if you don't have a timeline of what that means. Prices will stabilize but I don't see any reason to think they would go back to previous prices for 2 to 3 years... Short of a USA economic crisis that crashes housing demand overnight. Our baseline housing need keeps demand well above supply due to so little building over the last 12 years.
@Hauler has pointed out, prices are already rolling back. That coincides with the economy reopening.
D
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As I just said I am aware that it is not due to due to new home building. Quite the opposite. Since 2008 we have been well below our 50 year average on new housing supply creation. All while our population is growing. People have moved out of high-cost urban centers into more low-cost areas following the pandemic and they're significantly more demand in those areas. Every single city in Texas is experiencing this. Every single Southern Urban center is experiencing this.
The distribution of housing supply is out of whack with where people are at right now.
The significantly increases housing prices in those areas as you would expect.
And with that there is money to be made on new home builds and that is starting now as builders race to take advantage of this demand and flippers do construction on existing homes to compete..
Demand will fall off a cliff. The demand hasn't risen due to new home building, that too is fairly static. The demand has risen due to people doing renovations and other shit because they're at home, bored and have money to spend. As
D
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If you think lumber prices are going to fall off a cliff then you will also need to assume that the United States massive housing cost increases will also fall off a cliff. That ain't happening. This isn't 2008 due to oversupply with a sudden credit crisis occurring for buyers.
Hot prices will start to modulate and flatten out over the few years. But it's not a bubble.
Hot prices will start to modulate and flatten out over the few years. But it's not a bubble.
High housing prices propped up by cheap credit is exactly what the housing market is, so yes, it's a lot like 08. That being said, of what you're saying was correct, them the price of wood should still be sky high and it's not. A lot of public economists are making bold predictions about "new normals", these people, generally, are just manipulating the market.
There's no reason to think that by this time next year wood won't have returned to normal-ish (inflation is a thing) prices.
Demand will need to fall off considerably for prices to return to pre-covid levels. I don't see that happening for 2 or 3 years. Prices will fall off of where we are for sure, but I don't know if we ever get back to pre-covid levels.
As I said, inflation is a thing, basically everything goes up at least some amount year over year. That being said 2 year correction to an 18 month peak strikes me as "falling off a cliff". I also dont think it will take 2 years. I think the end of 2022 things are largely back to normal, they're definitely trending in that direction.
It's good if you can afford cost of living going up 4%.
Chipotle hikes prices to cover the cost of raising wages
Chipotle Mexican Grill has hiked menu prices by roughly 4% to cover the cost of raising its workers' wages.www.cnbc.com
I can get fast food workers a living wage for only 4% more on each burrito?
That seems like a pretty good plan.
$7 burrito now cost 7.28.
Comparitively speaking, the price of lumber is still being traded at levels that were unthinkable just 1 year ago. It just happened to print down 2 weeks in a row.
We broke records, then the price continued to climb for 15 straight weeks. That doesn't unwind overnight when construction is still at a breakneck pace.
What would you consider normal?
What would you consider normal? I dont regularly buy large quantities of wood so I'm not qualified to speak on the specific dollars and cents.
To use a common item, 7/16 osb had a per sheet range of $6.67 to $11.94 from March 2019 to March 2020. It's currently trading at $38.34 landed cost to me. It hasn't dropped off yet - I think we'll see $39 before it slowly falls and settles around $25 to $30.
To use a common lumber item, 2x4 12' SPF had a per stick range of $2.90 to $3.89 in that same March '19 to March '20 period. It reached a high of $13.74, then just recently "crashed" 2 weeks in a row - all the way down to $12.38 - Haha.
I'm thinking we settle around $8 to $10 for a bit.
We're not even in the same stratoshpere as what was considered "normal"
OSB will be $15 by the end of 2022 of not sooner.
M
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Yes
but no
but yeeees
but no
but yeeees
M
member 1013
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Inshallah
End of 2022? Very possible.
Up on 18 months, back down in 18 months. World keeps on spinning.
M
member 1013
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The earth is flat.
M
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It’s borne upon the backs of four elephants that themselves stand upon the back of a giant turtle