Lumber is well above where it was for all of 2019, pre-pandemic.
Lumber crash leads to 'blowout' sales as prices crater
511–520 of 553 posts
Re: Lumber crash leads to 'blowout' sales as prices crater
#512Earlier quoted context omitted.
100% of the analysts that I read, and, if I'm not mistaken, close to 100% of the mill owners recognized that this was a temporary blip, and that lumber would fall back into the $500sh range (There is a natural floor - that's the price at which BC mills no longer make money and start shutting down/curtailing capacity.) None of the mills started expanding or engaging in capital programs to try and take advantage of the…
> None of the mills started expanding or engaging in capital programs to try and take advantage of the increased prices. I'm a bit doubtful about this because I know that even German mills started to produce lumber with US dimensions, causing shortages for metric lumber locally.
Part of the issue was caused by issues getting Canadian supplies of lumber into the USA due to a trade dispute. It's possible that these German mills are just taking advantage of being in a temporarily good trading position, with the understanding that cheap Canadian imports will retake their market position shortly.
If they thought this was permanent, they would have expanded to supply the USA, rather than doing so at the expense of domestic production.
Re: Lumber crash leads to 'blowout' sales as prices crater
#513Earlier quoted context omitted.
Why does the USA, The Land of the Free and The Land of Opportunity, have so much bureaucracy? Look, I know fire codes are important, and you don't want a building to crumble in around you, but... Seems the building codes in the US are unnecessarily strict. Is it power hungry bureaucrats or exploitation from contractors that has lead to it? And how can the people be given more liberty to build the way they want?
> Why does the USA, The Land of the Free and The Land of Opportunity, have so much bureaucracy? Look, I know fire codes are important, and you don't want a building to crumble in around you, but... Yep, we should leave that to the market. You happen to live in a building that collapses, well, then you can have The Choice(TM) to never inhabit a building made by the same company again (if you're lucky). Eventually they…
He's being sarcastic.
Re: Lumber crash leads to 'blowout' sales as prices crater
#514I’ve been following these prices closely for most of the year and what’s striking to me is just how wrong nearly all the industry experts were throughout the year. I don’t recall reading a single opinion that was anything other than “prices will remain very high for the foreseeable future.”
I was also in that camp. I figured it would go the way of gasoline where they'd conjure up constant excuses to keep the price high almost indefinitely. "A missile landed in the middle of a farm in Uzbekistan, we better increase gas price $0.50/gallon due to global instability concerns".
It doesn't really work that way with commodities the scale of lumber. The amount of money one would to have to corner the lumber market is insane, even a cartel probably couldn't pull it off.
Timber is abundant and lumber mills are pretty easy to get going. If you live anywhere near where timber is grown, there's almost certainly a handful of mom-and-pop mills around you. The moment prices elevate for an extended period of time, these operations will start looking to expand.
Re: Lumber crash leads to 'blowout' sales as prices crater
#515I’ve been following these prices closely for most of the year and what’s striking to me is just how wrong nearly all the industry experts were throughout the year. I don’t recall reading a single opinion that was anything other than “prices will remain very high for the foreseeable future.”
Seems like everyone suffers from recency bias - "what has been happening for the past few months is how it will be in the future". I remember when gas prices peaked back around 2006 everyone said "gas prices will never come down, peak oil, blah, blah". 6 months later gas prices crashed by 75%. Keep that in mind when people talk about housing prices or the stock market. "It's different this time" is rarely true.
Gasoline is a little different because 2006 was the tail end of the Peak Oil era. There was a real fear that production of gasoline was going to peak around that time and never recover.
Imagine being criticized in 2035 for believing in 2020 that climate change was going to permanently change the world.
So that is a fear that I wouldn't call baseless. I don't think lay people expected the kind of technical innovation that happened in the petroleum industry in the past 15 years.
Re: Lumber crash leads to 'blowout' sales as prices crater
#516Earlier quoted context omitted.
This was the biggest lesson I learned during my first pre-IPO quiet period. Seemed like everything I read that was inferring things from the S-1 or forecasting the future were immediately wrong or turned out to be wrong in the end. I suspect there's a lot of the Gell-Mann amnesia effect going on in the economy.
"Effect" implies a cause. Any guesses?
I don't think Crichton intended to imply a cause. But I guess it's just a bias toward believing the media and forgetting the isolated experience. I suppose there's an opposite effect at play regarding the media's treatment of COVID and recent politics, etc.
Re: Lumber crash leads to 'blowout' sales as prices crater
#517Earlier quoted context omitted.
There's a form of reputation arbitrage where when there's a lot of demand, a reputable contractor just says yes to everyone with a project and then subcontracts out to the not-so-reputable contractors that the customer doesn't want to touch. We ran into this with our solar installer - they came with great reviews from 2 coworkers, and all their other reviews up until about a month or two before our project were great…
Were they not supposed to drill through the roof? Did they botch the install?
Yeah puncturing a roof is a big no-no - it can lead to water or structural damage to the house. Most companies (including ours) offer a warranty for it, and they did come out and fix it with some wood putty and paint, but we're still a little pissed. The also damaged the driveway (we're on a steep hill with a private drive, and told them that they can't drive large trucks up it, but they did anyway). And they seem completely incompetent for the first 2-3 times coming out and fixing it, until they finally gave up on subcontractors and sent their own guys out. CEO seemed to have no idea what was going on with his company with his underlings intentionally undermining him.
Re: Lumber crash leads to 'blowout' sales as prices crater
#518Earlier quoted context omitted.
5% year over year, not per month.
Not what I'm seeing. Hot dog buns to cheese, everything that was $2 is $3 right now. I swear everything has whole foods price right now. I don't care what the govt. is tracking they are obviously not in my safeway.
My understanding is that the price of food is not generally included in the most-commonly reported version of the CPI for the past few decades. So you could both be right.
Re: Lumber crash leads to 'blowout' sales as prices crater
#519Earlier quoted context omitted.
It depends on the area. And it applies to Europe too. Plenty of areas where wood frames are more common.
I live in south-eastern Europe and almost all houses are brick. Only smaller buildings in the yard are built from wood but sometimes even they are made with bricks.
Good. Now go visit northern europe.
Re: Lumber crash leads to 'blowout' sales as prices crater
#520Earlier quoted context omitted.
I spent 1.1M on a house with my wife of course and am very happy with my purchase. Lots of land and nobody around to tell me what to do.
> with my wife > nobody around to tell me what to do
The only person this reflects on is you. My life has done nothing but improve since getting married.