Material whirl
Homebuilding squeezed by high demand, supply shortage
Lumber prices are finally beginning to decrease after months of skyrocketing prices amid the pandemic. At the start of the pandemic, lumber mills and factories temporarily shut down, though not for long. As the construction industry was deemed essential, they opened their doors but produced at a slower pace due to safety restrictions. The production slowdown, coupled with high demand from homeowners, led to historically high prices and extended lead times. “Right now, the demand for people to invest in their properties is at an all-time high. People are pulling the trigger on projects on things they have not thought about for years,” said Genn Howley, owner of GNH Lumber. “There were all these details that woke up homeowners. We were all trapped between these four walls all the time and now are paying attention to things that never bothered us before.”
Builders across the Capital Region said over and over
again that COVID-19 lead to the highest prices they’ve ever seen during their careers. Higher than during the Great Recession and during the building boom. And it didn’t just happen to lumber.
Wood fiber, composite decking, appliances, fasteners, roofing shingles, circuit breakers and vinyl siding for the outside of your home are just some of the products that building suppliers have had a hard time getting their hands on.
At hardware stores, paint, bird seed, wood fencing, ball jars for canning, and topsoil, are items you might have to wait for.
In January, an eight-foot piece of twoby-four cost $3.07. Today it costs $7 dollars, according to Billy Deorazio, a sale manager at Bellevue Builders Supply.
Prices for lumber have started to come down in the last couple of months, but retailers are still being cautious, said Rita Ferris, the president of the Northeastern Lumber Association. Retailers don’t want to order lumber now and get stuck later when the price drops.
“At the moment we are seeing significant softening in prices, which is good, it is good for consumers, it needed to happen,” Ferris said. “There is a point where things get too expensive and people back off, and I think it was getting to that point.”
For homeowners looking to do their own projects they have to pay more and accept longer wait times. Howley, from GNH Lumber, says it all comes down to communication and making sure the customer knows how slow it will be before they get started.
Multiple hardware store owners said at the start of the pandemic some customers would be frustrated and try to go elsewhere but would soon come back after they realized everyone was having the same issue. Before the pandemic, vinyl windows took seven to 10 days to come in, Howley said. Now, they take seven weeks. Treated wood decking that would typically take eight weeks to come in is now taking 12, according to Deorazio. Roofing shingles that would typically take four weeks now take six, according to Rich Keating, vice president of sales and marketing at Curtis Lumber.
The high prices and lack of inventory have hurt builders. When builders sell a home, they go under contract with set prices. “I know some builders losing $10,000 a home under contracts they already have in place,” Deorazio said. “And there’s nothing they can do about it.”
Howley had vendors cancel contracts at the height of the pandemic because getting materials was so difficult.
“They were not able to honor the pricing they had given us,” Howley said. “We negotiated the price and took whatever we could get. It wasn’t just us… every industry, every manufacturer out there was experiencing this in some form.”
Where the price of lumber is going to settle is still a question builders and distributors are left wondering about.
“I don’t think it will go down as quick as it went up,” said Deorazio, from Bellevue Builders. “But there will be a continued downward swing.”
“Nobody’s ever been in this situation before,” said Peter Krihak, owner of Holbrook Lumber. “Is the new normal going to be at a higher value level than the old normal?”