The real estate market and prices for wood materials is outlandish right now.
I’m still engaged in house hunting. But feeling discouraged. The prices are outrageous. People are in bidding wars to pay thousands of dollars over the asking price when home prices are too high to begin with.
I’m not savvy about the machinations of real estate. My daughter is much better at this than I am. But she too is perplexed and a bit afraid due to her house flipping business currently costing her so much more.
The Staggering Price Of Lumber These Days:
Kendra bought what seemed like a paltry amount of wood for her flip house last week and paid $1800 for it.
Here is what $1800 of wood looks like today.
A Perfect Storm Of Factors:
Here’s what was written in Fortune magazine just over a week ago with this title:
Southern Loggers Are Pushing Wood Production To A 13-Year High. So Why Is The Price Of Lumber Up 288%?
In April, the U.S. industrial wood production index hit 134.2, its highest level since the 135.3 struck in December 2007. This was the first month of the Great Recession, after which home-building and lumber production screeched to a halt.
Earlier in June the cash price per thousand board feet of lumber was at $1,391, according to industry trade publication Random Lengths. While that’s down a bit from its $1,515 all-time high set on May 28, it’s up a staggering 288% since April 2020.
Prior to the pandemic, the price usually floated between $350 and $500.
As Fortune previously explained, this historic lumber shortage was spurred by a perfect storm of factors set off during the pandemic.
When COVID-19 broke out in spring 2020, sawmills cut production and unloaded inventory in fears of a looming housing crash.
A Predicted Crash That Didn’t Happen:
The crash didn’t happen. Instead, the opposite occurred. Americans rushed to Home Depot and Lowe’s to buy up materials for do-it-yourself projects, while recession-induced interest rates helped spur a housing boom.
That boom, which was exacerbated by a large cohort of millennials starting to hit their peak home-buying years, dried up housing inventory and sent buyers in search of new construction.
Home improvements and construction require a lot of lumber, and mills couldn’t keep up.
So I’ve told myself I may be living here longer than I wanted to. Either to find a reasonably priced house to buy or to wait in line to get into a senior apartment complex.
I can’t see renting a house, as the prices for renting are outlandish now as well. And getting worse all the time.
It all kind of depends on who my next-door neighbor ends up being in a few weeks and what happens in this crazy market.
I scan the rentals and houses on the market every single day hoping things will level out.