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Lumber price prediction

J

john in la

Well-known Member
Location
What part of in La do you not understand
I had plans to build a few one bedroom rentals this past summer when $10 OSB went to $28 and $3 2x4's went to $6.
Needless to say I put my plans on hold.
Now I'm trying to decide if todays lumber prices are the new normal price; or if lumber prices will return to some what reasonable prices in the next year or so.

I would like to hear your prediction and reason you feel that way.
 
Being a sliver picker for the last 3 decades my hunch is it will come down. We’ve seen it cycle like this through weather events in the past.
 
Jo and I put off building a house on our CO. property this Spring after the contractor gave us a number $125,000 higher than before the weather and riots. Maybe next year?
 

I say go ahead and build. Interest rates are going to stay low so housing demand will stay high. Lumber industry is going to face increased taxes causing prices to go up. Then there will be changes in EPA and other regs that will limit the cutting of forests. Trend is for composite anyway. Most commercial buildings are using steel studs and I'm seriously considering those for a house and some already do that. I'm looking at stuff that doesn't rot or need paint even though a little higher going in. With all the rain you get down there I'd think that is something to consider. I remember basic training and infantry AIT at Fort Polk and it seemed like we were always humping around in the rain forests there and eating wet grub. Been wanting to stop in and see the place during our trips to Florida and then heard they tore out all the old WWII barracks that we stayed in. Had to keep the windows open in the winter for ventilation to avoid URI. 40 degrees at 100% humidity just freezes a person all the way to the bone.

When all the tree huggers, bird huggers, lizard huggers, skunk huggers, and the mice huggers jump in to preserve forest land again the price is bound to go up. We need some more swamp loggers like the ones you have down there. Liked to watch the one who raced around wrecking his boats wearing shorts and shinnying up trees. Remember the time he pulled his pistol out, started shooting, stuck in his pants, and immediately pulled it out saying darn that was hot!
 
I think once most people get nnalert things will come down a little, but prices never come down as fast as they go up. It amazes me how much building is taking place here in Arizona with $28 osb and $8 2x4's!
 

Buy one trip 20' shipping container, put a slant metal roof on it using insulated "Florida room" roofing panels.
Then sheath the outside with styrofoam and pole barn steel siding.
Finish inside with bare minimum.

Will be more resistant to weather, vermin and renter damages.

A 40 footer can be a duplex.
 
I think lumber was cheaper than it should have been. I would expect prices to go back to $14/5 eventually, but it will take a while unless someone throws some dynamite at the economy. Just about everything outside the service sector is humping along.

I did a major renovation on my house this summer. Bought most of the materials this spring before prices went up. Still need to finish the inside of the garage, it will wait till prices moderate.
 
Actually if you look back on the prices of commodities prices usually go up over a long period of time and fall dramatically over over a short period of time.Same with the stock market.
 
I was in Home Depot yesterday getting a counter top, didn't ask the price, but walked the lumber aisles, not short on stock, but the prices, OUCH.
 
Hard to predict where prices will go and when. Around here people are throwing up houses and pole barns as fast as they can find someone to build them. Bundles of treated wood at our Lowes are gobbled up the same day they arrive. I agree with the one poster that we are in a bubble right now. When that pops building will all but stop for x months and that will provide downward pressure on lumber prices. Government printing money to cover stimulus packages will put inflation to work soon, in some areas it already has. I think that if a new building was in my plans I'd just put it up,,,
 
I don't see anything coming down.

They're cranking up the printing presses, get ready for some serious inflation.

Wage regulations will drive up prices.

Fuel prices will go UP!!!

Green taxes, permits, regulations on every thing!
 
I bought three 4 X 8 sheets of CDX from Home Depot yesterday right at 40.00 each. I haven't priced plywood for a while. Seamed a little high, but I need them. When the price goes up on most items, it hardly never comes down, because they know people still build things. Stan
 
As soon as the tree huggers get their regulations into effect lumber harvesting in the US will practically cease. Same with oil, predicting gas at the pump will exceed $3 or more by mid summer.
 
I quoted a 60x60 metal shed with 16' sidewalls, just the shell materials no doors windows etc, last June for $27k. Same shed last week was $37k. And this time they added a line about estimating the delivery date only after the order was placed. My guy tells me suppliers are having a hard time restarting plants shut down by the nnalert. So I looked it up. Found that reason (or excuse) and environmental issues as leading causes. Google "Boise Cascade plywood plant in Elgin closes". "If the Boise Cascade plywood plant in Elgin closes this year, it could cost Eastern Oregon 446 jobs, nearly $21 million in labor income and more than $78 million in economic output within a year." I think its only going to get worse, so I'll postpone the shed project for a year.
 
You could expect it with all the forest fires burning down homes and the hurricanes. Add that to the
expanding population. And it's not just in the US. High exports can raise prices.
 


A long time friend has been running a log yard for many years. Trucks that haul finished lumber from Quebec to the lumber yards all around the Northeast come to his yard and pick up saw logs to go north to those mills in Quebec. He told me that the drivers tell him that there are huge stacks of lumber up there just waiting to be ordered.
 
Just on the news this morning Phoenix & Nashville the fastest two growing housing markets in the nation. Right now things are just going like wild here , who knows what all this new administration will mess up. Prices and regulations.
 
I think it's stabilized but I don't believe it will go down to a reasonable price in the next few years. It takes about a year for prices to recover from a hurricane but the nnalert keeps going and going.
 
It’s a saw mill. Why wouldn’t they have a large inventory? I don’t
understand what your point is.

Vito
 
(quoted from post at 10:56:18 01/20/21) I think it's stabilized but I don't believe it will go down to a reasonable price in the next few years. It takes about a year for prices to recover from a hurricane but the nnalert keeps going and going.
Click to expand...

Short term is getting close to the all time high.
Gonna be LONG TIME. With interest rates this low its going to fly until the rates are raised. Then we go tumbling down. Check out gold.

mvphoto68657.jpg


mvphoto68658.jpg
 
The supply of western softwood timber is decreased each yr when forest fires happen. Cal is said to have lost 4 million acre timber to forest fire in 2020 alone. Some estimates are as high as 10 million acres Cal forest lost in 2020. This happens every year in September when Cal forests catch fire. These are long term losses in timber supply in just one state .
 
As soon as folks catch up on all the additions and such they dreamed up while stuck at home so much the prices will drop.

Other option, our local bandsaw guy still charges the same for milling. Cut your own trees and get them milled. I have a mill I built years ago but it needs some attention after sitting idle for 10 years. Would be a good thing to have running at the moment.
 
(quoted from post at 12:20:08 01/20/21) As soon as folks catch up on all the additions and such they dreamed up while stuck at home so much the prices will drop.

Other option, our local bandsaw guy still charges the same for milling. Cut your own trees and get them milled. I have a mill I built years ago but it needs some attention after sitting idle for 10 years. Would be a good thing to have running at the moment.
Click to expand...


The weekend warriors are a very small percentage of the overall market, most dont get building permits. This gives a more detailed perspective.

mvphoto68665.jpg


Homebuilt mills are okay for some projects, then you have the issue of curing the lumber.
 
Working on a 50’ x 60’, 14’ tall to the eaves addition to one of our buildings. Reuse the one end and move the overhead door. Add one man door. Building only is $32,000 with price good only until 2-6-21.
 
(quoted from post at 11:34:39 01/20/21) As soon as the tree huggers get their regulations into effect lumber harvesting in the US will practically cease. Same with oil, predicting gas at the pump will exceed $3 or more by mid summer.
Click to expand...

This is right. Nothing will ever be back to as good as we have had it.
 
There are a lot of factors at work here. First thing is inflation. If the government keeps printing and handing out money by the billions, inflation will inevitably follow. To what degree is open for discussion.

Next thing is economics 101. Supply versus demand. As prices rise, demand falls off. As demand falls off, prices tend to fall off as well. At some point, they stabilize. Here in this economic climate, demand rose because of the travel/work/stay home restrictions. Supply fell of because of illness and restrictions. These two factors led to higher prices and scarce supplies. Same with paper products and sanitizing products.

When folks return to work in more normal numbers and demand falls off due to high prices or return to normal routines, prices will stabilize.

This is my observation and opinion.
 
(quoted from post at 11:05:52 01/20/21) Trying to figure the new reset,I have already had my 'Told you so' tee shirts and hats printed up before the price increase.
Click to expand...


Well TF, what did you have printed up to commemorate the 40% increase in national debt over the last four years. Sure the interest on it is low right now, but how about once the economy gets going again?
 
(quoted from post at 14:47:01 01/20/21)
(quoted from post at 11:05:52 01/20/21) Trying to figure the new reset,I have already had my 'Told you so' tee shirts and hats printed up before the price increase.
Click to expand...


Sure the interest on it is low right now, but how about once the economy gets going again?
Click to expand...

Gonna be a long time before the economy gets going again.
When/ if they raise interest rates all hell brakes loose and the markets crash hard.
 
I agree spending has been totally out of control for years,but with more taxes,increased energy costs,more regulation being promised that isn't the way
to bring the economy back.Just the opposite they're economy killers.
 
About 10% answered your question. The first house I worked on was a spec house in the town of the yard I worked for. It’s selling price was 83K. I just looked up houses in that same town. A new spec house comparable is listing right now for 280K. Lumber has gone up in that time and of 35 years. Along with labor, insurance, transportation, and other materials. The family that settled the farm I grew up on sold the oldest daughter and her new husband 50 acres for $250.00. That property today is worth XXX times that. (That was 150 years ago)

I think materials will come down a bit, but don’t hold your breath too long. Talk to your supplier and see if he can look into his crystal ball.
 
The economy won’t be growing for another four years starting today. We’re about to see taxes go up on everything, lumber prices are going to keep going up and they’re not coming down. For the next four years this country is going to be in a economic quagmire ,Just my prediction.
 
Keep in mind that the Federal Reserve's stated goal is to devalue your money by 2% every year. so even if nothing else happens your wood will be that much more next year. And the year after that....yada yada yada....
 
(quoted from post at 15:06:42 01/20/21) It s a saw mill. Why wouldn t they have a large inventory? I don t
understand what your point is.

Vito
Click to expand...

If inventory at the mill is piling up......
Maybe the mill has set a price too high.

Or the retailers just do not want to buy it, and/or creating a false demand as an excuse to jack up prices.
 
(quoted from post at 11:06:42 01/20/21) It s a saw mill. Why wouldn t they have a large inventory? I don t
understand what your point is.

Vito
Click to expand...

Vito, I don't understand why you think that I have to be trying to make a point,


Colin
 
I think it gets a little worse before it gets better.

I think it will get better (lumber prices) but I think it will be slower to drop than it was to come up.

I think by the time we start thinking it is getting better and might get back to normal soon some version of inflation will be dragging the prices back up again.

That might be over the next 3 years or so view.

It’s only my opinion, so it’s not worth the time you spent reading it.
 
(quoted from post at 17:56:41 01/20/21) Keep in mind that the Federal Reserve's stated goal is to devalue your money by 2% every year. so even if nothing else happens your wood will be that much more next year. And the year after that....yada yada yada....
Click to expand...

Jeff B, I just read through the policy statement of the Board of Governors of the Federal Reserve System, and I can't find anywhere about devaluing currency by 2%/year. Could you help me to get narrowed in on where it is? I can cut and paste it here if you want.
 
(quoted from post at 11:08:04 01/20/21)
(quoted from post at 10:56:18 01/20/21) I think it's stabilized but I don't believe it will go down to a reasonable price in the next few years. It takes about a year for prices to recover from a hurricane but the nnalert keeps going and going.
Click to expand...

Short term is getting close to the all time high.
Gonna be LONG TIME. With interest rates this low its going to fly until the rates are raised. Then we go tumbling down. Check out gold.

mvphoto68657.jpg


mvphoto68658.jpg
Click to expand...


Lumber futures are still close to ATH. Gonna be awhile
before it falls.

mvphoto68813.jpg


mvphoto68814.jpg
 
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