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Lumber Prices Set to hit Record Highs!

Posted by REEF Cape Cod's Home Builder on Thu, Mar 08, 2018

This spring, we expect to see lumber prices hit record highs due to a number of factors in the industry. Over the last year the US government has imposed a 20% tariff on Canadian lumber in an effort to protect US Lumber manufacturers. In addition to tariffs, lumber supplies have been limited due to bad weather and wild fires in western Canada. The supply shortages got so bad last month that some lumber yards in the western US completely ran out of materials! Current commodity projections now show lumber moving to unprecedented record highs.

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So what does this all mean? Over the last 14 Months, lumber commodity prices have increased over 50% and we could see an additional increases as overall demand for construction materials is expected to skyrocket this spring and summer! Consumers can expect to pay anywhere from $3,000 to $10,000 in additional costs on a new small to mid-sized home project.

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If you are considering a new Custom Home project, or major renovation project here on Cape Cod, plan on increasing your overall budget by at least 2-3%. There are also several design considerations you may want to take into account to reduce waste and maximize the value of the structural lumber used in your project.

At REEF we provide complete design, permitting and construction management services for all of your project needs here on Cape Cod. Contact us today to see how we can help!

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For more information about lumber prices - check out this article by the Wall Street Journal!

Tags: lumber, construction, custom waterfront homes, Cape Cod custom home, new home cape cod, cost per square foot

Proposed Lumber Duties Will Harm Housing Affordability!

Posted by REEF Custom Homes on Mon, May 01, 2017

Many have you may be following the ongoing lumber trade dispute between the US and Canada over the last few months. Today, the National Association of Home Builders issued a statement denouncing a proposed 20% tariff on all Canadian lumber imports. 95% of the lumber currently used in the United States is imported from Canada, and it is the essential building component used in all levels of residential construction. So regardless whether you are planning an addition, or renovation project, or a custom built home, plan on seeing the overall cost of your project increase this year as this trade dispute continues.

Here on Cape Cod, we have seen lumber prices steadily increasing since late 2016. It is unfortunate, that our government has not taken more aggressive action to curb this sort of situation. Housing, at all levels, from starter homes to elaborate custom homes, is a vital part of both the national and local economies. After watching regulations steadily increase over the last 7 years, it is disappointing to see this lumber dispute add additional unnecessary costs to the construction process. Lumber makes up approximately 7-10% of the overall cost of a new home, so a 20% increase in materials costs will add about $3,600 to an average home, and can easily add $10,000 to $20,000 to the cost of a larger custom home or renovation project.

Here's more info from the NAHB: Proposed Lumber Duties will Harm Housing

Let's hope we can get this resolved quickly!

If you are considering a new custom home, addition, or remodel on your Cape Cod property, Contact Us today!

Cape Custom Builder, Cape Cod Builder, Custom Homes

 

 

 

 

 

 

Tags: lumber, Construction Costs

Lumber Prices on the Rise

Posted by REEF Custom Homes on Tue, Feb 28, 2017

If you are considering designing and building a custom home over the next year, you should take some time to understand some of the major cost components and how they can impact the overall cost of construction. Over the last few years, most construction cost increases have been driven by substantial regulatory change, and an overall shortage of labor vs. demand. Lumber, which accounts for 10-20% of the overall cost of a custom home has remained fairly steady over the last year or two. We did just get news from our team at Shepley Wood Products that lumber prices are expected to increase over the next year, namely due to lumber agreements between the US and Canada. Here's an explaination:

Softwood Lumber Agreement Information

With the Softwood Lumber Agreement (SLA) between the US and Canada coming to a close and the possibility of a duty being imposed on Canadian lumber imports , we as consumers can expect to see price increases on both Canadian and domestic timber over the next few months. Speculators typically try to create panic in the market place about sharp price escalation to drive impulse purchasing and some mills have already imposed price increases out of knee jerk reaction. However, historically, sharp rises like this have been short lived and adjust quickly as the United States and Canada find compromise in the name of doing business.

 

We recognize how disruptive economic change like the end of the SLA can be to business, so in an effort to reduce its impact, Shepley Wood Products is making the following commitments.

  • We will buy right and leverage our average inventory value to ensure our prices are always better than market. Well planned purchasing allows us to take the edge off of sharp market changes.
  • We will buy enough inventory to keep your projects well supplied
  • We will not over buy inventory, allowing us to more quickly lower prices as the market corrects
  • We will not drop our price hold commitment below 30 Days
  • We will always be forthcoming about market conditions and make sure you have the most recent and accurate information.

Click Here for More Information

 

Bottom Line: IF you are considering designing and building your custom home or retirement home, or even a major renovation project here on Cape Cod expect to pay more over the next year as lumber prices increase in reaction to this news about the Softwood Lumber Agreement.

We are expecting prices to change 3-5% over the next few months, and we are already seeing prices move 1% or so this month.

If you have any questions, please feel free to email us at sales@capecodbuilder.com

Once we get more information, we'll issue a new Construction Cost Guide for spring of 2017

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Tags: lumber, Construction Costs, Custom Homes

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