Great News if You’re Looking to Build a Home Soon!
On Friday 8/27/2021, the cash market price of lumber fell to $389 per thousand board feet, according to data from Fastmarkets Random Lengths, an industry trade publication. That’s down 74% from its $1,515 all-time high in May.
“The market seems to be trying to find a bottom,” says Shawn Church, editor at Fastmarkets Random Lengths. “However, there is now a lot of wood in the distribution system, and a bottom is proving elusive.”
In a matter of three months, lumber has gone from exorbitant to relatively affordable levels. Prior to the pandemic, the price usually ranged from $350 to $500. It’s now at the lower end of that spectrum.
But some lumber yards are resisting dropping their prices. After all, they bought some of this wood for much higher prices this summer. So lowering prices can mean taking losses.
“Many buyers [are] still working through high-priced inventories. They won’t return to the open market in any meaningful way until they get that gorilla off of their backs. Contract volumes and purchases out of distribution are currently filling many of any holes that develop in inventories,” Church says.
Looking to Build A Home Soon?
So if you’ve been holding off building a home it looks like the end is near. To the untrained eye, a lot of people were getting quotes to build homes and just thought,”ok the price is the price”. What worried me about that is if someone built a home without a large down payment and an unfortunate event took place (loss of job etc.) and they had to quickly sell after the market makes this correction. They could find themselves in a situation where they owed more on their home than what it was worth! When lumber prices decrease the cost of building will be cheaper, therefore values could also start to drop because builders can offer homes at a more affordable price. So if you built/bought a home at the height of lumber prices and it cost you $350,000! That same home could be built/bought at $300,000. If you find yourself in a situation where you’re looking to build a home in the Lafayette, LA area or want an opinion of what you can sell your home for? Please fill out the form below or as always you can call/text 337-654-0569 for more info and speak with me directly!