Soaring lumber costs hammer homebuilders across nation
Conflict helps kids figure out what is unique and special about themselves
Homebuilders who are scrambling to meet a swell of buyer demand are hitting a wall.
Prices of lumber and other wood products have soared in recent months, eating away at their profits and causing a further rise in new home prices.
Builders and industry analysts say that costs of some building materials have doubled and tripled from a year ago, thanks to increased demand and supply constraints.
“Lumber is in flux so much right now it may cost you an extra $50,000 to build a house,” Dallas homebuilder Jeff Dworkin said. “A 2-by-10 framing piece that cost me five bucks a year ago is now costing me over $10.”
Dworkin said the lumber framing on his latest house is costing him 80% more than a similar home he just sold. “We are trying to lock in our lumber prices for 30 to 60 days, and we are lucky to get that,” he said. “Typically this time of year lumber costs come down because the cold weather slows down construction.
“But we have yet to see that.”
Robert Dietz, top economist for the National Association of Home Builders, said the surge in lumber costs is affecting builders nationwide.
“Pricing is back near the highs of mid-September, which at the time was the
result of a 170% spike over the pricing in the spring,” Dietz said. “The industry has faced two surges in lumber pricing in 2020, including one that persists here at the start of 2021.
“The gains are adding about $16,000 to the price of a typical newly built home,” he said. “Materials are also taking longer to arrive at construction sites.”
Dietz said the lumber price volatility is mostly being caused by pandemic-related supply chain disruptions.
“The main issue is domestic lumber mills not answering the bell on demand,” said Phil Crone, executive officer of the Dallas Builders Association. “Many are running two shifts when the market dictates they run all three.
“The lack of a long-term lumber deal with Canada curtails competition from abroad and allows producers to enjoy the profits of high prices at consumers’ expense,” Crone said. “One custom builder reported today that (wood panel) sheathing went from $7.20 a sheet early last year to $32 a sheet.”
With home starts in many parts of the country at their highest level in more than a decade, it’s not just lumber prices that are hammering builders.
Costs of all types of building materials, land and labor are rising in North Texas, said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies.
“It’s really not just lumber but the entire supply chain,” Wilson said. “Some of it is COVID-related — these plants have had to shut down temporally when there are outbreaks.
“Appliances coming from out of the country have also been disrupted.”
The increase in construction costs can put a pinch on builders who sell a house before starting work and see costs soar during the build.
“You want to try to lock in prices as much as you can, but it is hard,” Wilson said. “Some of the builders have a six- to nine-month backlog of orders.
“They want to price up the houses to anticipate some price increases,” he said. “A lot of builders have definitely increased prices to improve their margins, but those profits have eroded because of building cost issues.”
With a shortage of preowned houses on the market, thousands of buyers are turning to the new home market. North Texas home starts were up 33% in 2020, and the Dallas-Fort Worth area leads the country in single-family building.
“We may be setting a record in 2021 with respect to starts because the sales backlogs are so huge,” Wilson said. “The construction capacity is as stretched as it has been in some time.”
Q: My wife and I have owned two homes during our marriage. We lived in the first one for 20 years and have owned our current home for almost 20 years. So, we are not first-time buyers but still not overly experienced with the process of buying real estate.
We are ready to downsize to a single-story ranch to hopefully age in place. I have read some of your comments in your book, “100 Questions Every First-Time Home Buyer Should Ask,” and your weekly newsletter about buyer’s agents, seller’s agents, dual agents and transactional agents, but I am unsure of the best way to handle our situation.
Should we find a buyer’s agent to represent us in finding a new home and also hire a seller’s agent to sell our current house? We will be staying near our current location, so our seller’s agent would know of the local homes for sale that could match our needs.
Is it too much of a risk to use one real estate agent to handle both selling and buying for us?
A: Great questions. Over the last 30 years, real estate brokerage has changed in many respects. Perhaps the most significant change is how buyers and sellers obtain information about the real estate market and the value of homes.
Today, it’s all about the internet. About 25 years ago, pre-Google, buyers and sellers worked with agents who printed black-andwhite listing books once or twice a month. Agents were the gatekeepers of all real estate knowledge, and that made the process unfair and unfriendly (sometimes to the point of hostile) for some.
Another significant change has been how buyers and sellers are represented in the transaction. Traditionally, a real estate agent represented the seller, and only the seller. Buyers commonly thought the broker or agent who shepherded you around to showings and helped out with closing documents represented you, but that wasn’t the case. The idea was that the seller was paying the brokerage commission so the listing broker and any broker the buyer worked with were actually agents of the seller.
Of course, the idea that the seller paid the commission belied the truth that the buyer is the one providing the funds for the transaction. More recent changes to state laws have separated the responsibilities a broker owes to a buyer or a seller and now a listing broker represents the seller and a buyer’s broker represents the buyer.
Why is this important? Well, if you’re working with a broker, you may share information with that broker about your likes and dislikes and about your specific financial situation. You might even tell the broker what you’re willing to pay for a home.
You want all that personal financial information you share to be used to help you get the best deal, and not to assist the other party to your transaction.
At some point over the last 20 years, real estate brokerage began to change; a small percentage broke away from traditional real estate to service niche markets. A small number of agents and brokers decided they would only work with buyers and advocate only for buyers interests.
Some companies decided to offer sellers a reduction in the commission if the sellers would handle some of the work typically assigned to the listing agent. Other models, which industry observers now categorize as “iBuyers,” eliminate the use of a listing agent altogether, and allow buyers to tour homes that the company is listing or even that the company has purchased to resell.
And, finally, a small percentage of sellers will try to sell their homes without the aid of a listing agent (although they may still pay a fee to list their home on the local multiple listing service used by Realtors) and sell the home as a “For Sale By Owner” or “FSBO.”
Today, there is a full range of options available to you when it comes to buying and selling a home. And, as Ilyce often says, “If you haven’t bought or sold in the last five or 10 years, go ahead and treat yourself like a first-time buyer, because the game has changed.”
The most important thing to remember is to find someone who is competent and trustworthy and will have your best interests at heart. If you find someone who really understands your neighborhood and price range, whose company has a long list of buyers looking for a home just like yours, it’s fine to use the same person to sell your home and buy the next one. Many home sellers go that route.
But since we’re in one of the strongest sellers markets in history, you could try to sell your home by owner, and then find an agent to represent you on the buy side, if housing stock is scarce in your neighborhood of choice.
Your comfort is key. So, consider forgetting the specific labels attached to any one type of agent, and instead find someone who comes highly recommended by many people, who has lots of experience in your neighborhood, and meets whatever other needs and requirements you have.
Sibling screaming matches may seem louder and more oppressive during a pandemic when no one is leaving the house, but according to Jeanine Vivona, a professor of psychology at the College of New Jersey who has studied sibling rivalry, “competition with siblings is just a fact of life. And we, as people with siblings and people with children, can just try to manage it as best we can.”
The book of Genesis holds what Mark Ethan Feinberg calls the “founding stories of the Western psyche.” Feinberg, an expert in sibling behavior at Penn State, points out that, among other things, it is dripping with tales of murderous and covetous siblings, such as Cain and Abel and Jacob and Esau. And these stories unfurl “themes researchers are exploring today: dastardly deeds, conflict over parental love and resources, and triangulation of children into parental conflicts.”
Sibling rivalry is so profound that hundreds of years ago, when child mortality was much higher, children under 5 with close-in-age siblings were more likely to die. These deaths were most likely “related to increased prevalence of childhood infectious disease in such households, and lower levels of maternal nutrition, and perhaps more general competition for parental attention,” said Sarah Walters, an associate professor of demography at the London School of Hygiene and Tropical Medicine and an author of a study on siblings and mortality clustering in 19th-century Belgium.
Still, observational studies have shown that sibling conflicts today may happen up to eight times an hour. Other research finds that pairs of sisters tend to be the closest, and that sibling dyads that include a brother have the most conflict. “Conflict does decrease into adolescence; it sort of levels off,” Feinberg said. “Early and middle childhood are particularly difficult times for sibling aggression.”
While most siblings aren’t fighting for actual scraps, psychologically, sibling rivalry serves a developmental purpose: It helps children figure out what is unique and special about themselves, otherwise known as “differentiation.” Children want to be seen as the most special by their parents, so they’re “always going to push for preferential treatment” over their siblings, Vivona said. But they may also shape their interests and personalities around their siblings’ skills and desires.
For example, let’s say the older son is a soccer star. The younger child or children may then avoid soccer altogether, either because they are afraid they won’t be as good or because they fear they might be better — and they don’t want to take that risk either, Vivona said. Or perhaps they both end
up on the soccer team, but the older one is the serious hard worker, and the younger one tries to establish himself as the team jester.
Just because sibling rivalry is to be expected does not mean there aren’t ways to mitigate it. Here are five suggestions from the experts to handle squabbling sibs.
Figure out what sets them off. “Pay attention to what tends to happen before conflict breaks out,” said Sally Beville Hunter, a clinical associate professor in child and family studies at the University of Tennessee at Knoxville. If your children fight every time they play video games, for example, make sure you’re in earshot when they sit down to play. Listen for the particular words or tones of voice they are using that are combative, and try to intervene before it escalates.
Help them learn to resolve conflict. Once tempers have settled, try to sit your kids down and discuss the problem “without blaming or accusing,” Feinberg advised. Give each child a chance to talk, uninterrupted, and have them try to come up with solutions to the problem themselves. By the time kids are elementary school age, they can “evaluate which of those solutions are win-win solutions and which ones are most likely to work and satisfy each other over time,” he said. They should also learn to revisit problems when solutions are no longer working.
Praise them in public and punish them in private. If your children are being kind to each other, “praise really loudly all over the place,” Hunter said. For example, “I love that you let your sister go first!” But if you’re criticizing them, try to do it outside of the other child’s earshot, because she may use it as ammunition (“Remember, Mom said you couldn’t jump off the couch!”).
Try to find moments where everyone can come together. Your children’s temperaments and personalities may be similar, or they may not. They may both love dance, or one loves dance and the other just wants to play chess. One might be rigid, and the other is a free spirit. “Try to find common activities that allow everyone to be flexible and to feel connected,” Vivona said.
Don’t be afraid to choose an activity, like family movie night, that might result in an absurdly long delay as children argue over which one to watch. “The fact that it takes a long time should not take away from the fact that it’s something valuable,” she said. “You’re going to experience the rivalry — there’s no short-circuiting it.” But at the end, you can all sit together and keep each other company and eat popcorn, while your children learn valuable skills, like compromise. Even if you are watching “Toy Story” for the 15th time.
Don’t forget the pandemic is hard on children. “We are all spending more time with each other indoors, especially in the winter,” Hunter said. “I think some of these conflicts can be really solved by telling our kids to go outside and run around the house.” They may get twitchy when they’re cooped up, so throwing some physical activity into the mix — even if it’s an indoor obstacle course made with couch pillows — can change the mood.
Last week, Consumer Reports sent recommendations to the Department of Transportation concerning its policies for air travel. They’re all beneficial, but some are more likely to be adopted than others.
Three are obvious no-brainers that will likely get quick DoT attention and make quick improvements to your travel experience:
COVID-19 protections. DoT needs to issue additional rules for COVID protection on airplanes and in airports, as well as uniform procedures for testing and screening air passengers along with valid documentation. This is an obvious and sensible suggestion — everyone has to be on the same page for any sort of testing and screening program to work.
The additional suggestion that airlines should keep limiting middle-seat occupancy, however, is a nonstarter: Airlines need to fill middle seats to keep fares reasonable, and, long term, you can’t expect empty middles.
Family seating. This issue is a puzzlement as well as a no-brainer: It’s a no-brainer because of the obvious benefit to everyone of having family groups seated together without their having to pay seat fees.
It’s a puzzlement because the airlines have ignored the issue. In response to possible regulations, airlines always whine, “we don’t need new rules, the market will solve it,” but the market hasn’t worked. Family seating has been a consumer pain point a long time; the airlines have done nothing, so DoT will.
Ticket refunds. Currently, many airlines offer no-fee ticket changes, but some have dragged their feet about complying with cash-refund rules and a few have stonewalled. DoT needs to step up enforcement of existing rules — and it will.
But in the long term, cash refunds should be mandatory in force majeure circumstances even when consumers cancel first. This will be tougher.
Three other recommendations deal with internal DoT organization and procedures that affect its ability to protect consumers. DoT could act quickly, but all three might face opposition.
Revamp consumer committee. The four-member Aviation Consumer Protection Advisory Committee is fundamentally broken. Neither the designated state nor consumer representative can pass the Rosten test: “By consumer advocates are they consumer advocates?”
In theory, this committee can act as a gatekeeper for new proposals, and it needs at least two true consumer advocates. DoT is likely to agree.
Revoke new unfair and deceptive rule. Although it sounds benign, the rule passed last year has the potential to make it harder for DoT to protect consumers.
The airlines supported it vigorously, so you can bet it’s a bad idea. For now, color this “maybe.”
Airfare transparency. Currently, DoT requires that airlines include all mandatory fees and taxes in airfare displays. The airlines tried to kill this requirement last year, but DoT pulled the airlines’ proposal and is not likely to reintroduce it. Beyond the current rule, however, some advocates are plumping for “all up” fare postings inclusive of some “options.”
Although the idea is admirable, nobody is quote sure which “options” need to be included. For now, DoT may study the issue, but this is a great opportunity for online travel agencies and metasearch systems to take the lead. So far, they haven’t.
Beyond these six, the CR recommendations are something of a wish list of actions that would benefit travelers but face some combination of complexity, airline opposition and the need for legislation.
Among those that apply directly to your experience is relief from ultra-tight economy class seating, but you won’t get any. DoT might look at minimum standards for seat sizes and associated rules for emergency evacuation, but you can bet that today’s tightest seating will pass any new requirements.
Travel leaders say they support all efforts to rid the world of the coronavirus pandemic — except for a mandate that would require airline passengers to present a negative COVID-19 test before flying.
The CEOs of American, United, Southwest, Alaska and JetBlue airlines met with White House officials recently in a virtual meeting to discuss the proposal, and all of them — as well as key industry figures — say such a mandate would do more harm than good for U.S. carriers.
“We had a very positive, constructive conversation focused on our shared commitment to sciencebased policies as we work together to end the pandemic, restore air travel and lead our nation toward recovery,” said Nick Calio, head of the trade group Airlines for America.
The meeting was arranged after Transportation Secretary Pete Buttigieg and officials with the Centers for Disease Control and Prevention said that such a testing requirement was under consideration.
The Southwest Airlines pilots’ union said a testing mandate “would decimate domestic air travel demand, put aviation jobs at risk, and create serious unintended consequences.”
U.S. Travel Association President and CEO Roger Dow said the high cost and low availability of testing make a domestic testing mandate a challenging concept to put into practice.
“Based on January 2021 data, a testing requirement for domestic air travel would necessitate a 42 percent increase in daily testing capacity nationwide —a substantial use of testing resources when air travel has already been shown to be safer than many other routine activities,” Dow said.
A: If your airline ticket was refundable, you should be able to get a full refund. Unfortunately, airlines have taken their time during the pandemic. They were slow before, and they’re even slower now.
Your case is instructive for anyone planning an international trip in 2021. Passports and visas are your responsibility, not your airline’s. Had Alitalia allowed you to board your flight with the wrong visa, it could have faced government fines. So make sure you have permission to enter the country before you book your ticket.
What paperwork do you need? If you live in the U.S., check the U.S. Department of State site
Q: I booked a flight from Cairo to New York via Rome on Alitalia. When I tried to check in for my flight to Italy, an airline representative denied me boarding because my visa was rejected. My visa doesn’t allow me to enter Europe en route to the U.S., according to Alitalia.
Fortunately, my ticket was refundable. I sent an email to Alitalia before the flight departed, requesting a refund. I enclosed the ticket receipt, which shows that the ticket is refundable, as long as I cancel before departure, and is subject to fees.
Alitalia replied that my ticket had “no value,” and it denied a refund. Instead, it offered me a ticket credit and a refund of the taxes. They’ve stopped answering my emails. I’ve also called them, but I’ve gotten nowhere. Can you help me get my $700 back, please? — Ahmed Seloma, Giza, Egypt at https://travel.state.gov/. Also, visit the International Air Transport Association site at www.iatatravelcentre.com/, which keeps the most up-to-date visa information.
You kept a great paper trail of the correspondence between you and Alitalia. It would have been good if you also sent the information to an executive contact at the airline, asking for their assistance. I list the names, numbers and email addresses of all the Alitalia managers on my consumer advocacy site at www.elliott.org/ company-contacts/alitalia/.
Looking at your case, I think part of the delay was related to COVID19. Another part was just normal airline shenanigans. Alitalia appears to have misread the terms of your ticket, falsely claiming that they owe you a ticket credit. By the way, if they’d persisted, you could have filed a credit card chargeback. In the U.S., the Fair Credit Billing Act protects you against charges for products or services not delivered, which this certainly was.
I contacted Alitalia on your behalf. It issued a $700 refund.