What are we doing these days besides sitting home watching Netflix, knitting, walking around the neighborhood, and cooking banana bread?

Apparently, we’re building things, according to reports by the U.S. lumber industry, which confirms that the overwhelming need for lumber and the shortage due to shutdowns during the past 10 months or so has sent prices skyrocketing.

Lumber companies that ship out materials to construction companies around the Southern California area concur, noting that the pandemic has wreaked havoc with prices and that the rapid change in costs through 2020 and into 2021 are like nothing they’ve ever seen.

A major misconception

Why? Well, it seems that the industry was under the incorrect assumption that building would come to a halt or at least slow down drastically during lockdowns. However, the opposite occurred. While individuals were stuck inside, they started to think about repairs, remodels, and additions to their homes or businesses. Many people took on do-it-yourself projects or hired contractors for other jobs they deemed too difficult. Then the housing market went crazy, setting up both the lumber shortage and the price increase.

Data released by the National Association of Home Builders, a trade organization, showed that lumber prices per thousand board feet more than doubled from less than $400 in January to more than $900 in September.  Though prices dropped off a bit in October, they still remain higher than they were a year ago, according to industry publications.

As such, both builders/contractors and the general public are taking the hit for the rise in costs. While most contractors try to pass as little as possible on to their clients, there’s still a substantial financial impact for both residential and commercial clients who choose to build using wood framing, for example, rather than steel or concrete.

This rise in prices, of course, threatens the affordability of homes and commercial buildings. Only the ramping up of production will alleviate this problem and ease shortages and more price increases. But what does one do in the meantime if they need to build with lumber?

Will lumber prices stay high?

At Core Contracting, we’ve watched the cost of framing lumber rise each month. We’ve also been fighting material shortages for months due to the pandemic and the stoppage or slowing of work.

In their 4th quarter report, the U.S. Chamber of Commerce Commercial Construction Index noted that this was true to most commercial construction contractors. Everyone was suffering. And though things got a little better from September through December, the going was still tough, with about 41 percent reporting less availability of building products and materials as a “severe” consequence of the pandemic.

However, according to the U.S. Census Bureau, nonresidential (commercial) construction spending broke a four-month pattern of declines and remained flat in October. From there, things have been looking up, say industry professionals. New business is coming and, better yet, companies like Core Contracting are even at times finding reason to hire new union contractors to tackle upcoming projects for which our framing expertise is required.

Of course, worker health and safety remain a top concern during the pandemic, which will still be with us for months (or longer). But projections show us having to deal with fewer delays in the upcoming months, thanks to not only the national vaccination effort but also because mills are opening at higher capacity once again and will continue to increase production.

Once these things happen to a large extent, prices should come back down though none of us can truly predict when anything will be “normal” again. In the meantime, Core Contracting remains committed to providing the best service possible for our clients at the best prices we can offer at this time. We’d be happy to talk to you about your upcoming wood framing project, including providing details on cost and scheduling. For more information, call us at 760-683-8308.