Multi-year chart of lumber prices puts some of these "skyrocketing" and "cratering" headlines in perspective: https://tradingeconomics.com/commodity/lumber
Prices have NEVER been this low since like, June of last year.
Lumber crash leads to 'blowout' sales as prices crater
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Re: Lumber crash leads to 'blowout' sales as prices crater
#92I’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.
Re: Lumber crash leads to 'blowout' sales as prices crater
#93Earlier quoted context omitted.
To me what is interesting is comparing to other commodities. For Iron you see a similar pattern to lumber. Copper and steel boombed but are only starting to turn now. Is there a lag between raw materials and more refined materials? Silver and gold similarly, though gold has fallen harder. I'm guessing because of all the doomers that buy gold when the economy dips. I don't know how to analyze wheat. And crude oil just…
Note that you can't just cut down a tree and make lumber out of it. You have to dry it out first, which, afaik can take a long time. I don't know about the other stuff though.
Most construction lumber is kiln dried in less than five weeks.
Re: Lumber crash leads to 'blowout' sales as prices crater
#94I’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.”
The only people I saw saying this were the people on mainstream news like CNN or Fox (more Fox). But outside that I didn't hear anyone. Lumber has been falling since May and lumber futures have been going down as well. Really the only people that were saying that prices would remain high had a vested interest in keeping it high. It is such an insane position to even take considering that a pandemic is a temporary thi…
Nobody clicks on a news article that says "Lumbar price jump 300% but are expected to return to normal by end of year".
Re: Lumber crash leads to 'blowout' sales as prices crater
#95Multi-year chart of lumber prices puts some of these "skyrocketing" and "cratering" headlines in perspective: https://tradingeconomics.com/commodity/lumber
I don’t understand your comment and scare quotes, do you think a quadrupling in price of a commodity is not skyrocketing? That’s a cool website thank you for sharing it.
those aren't scare quotes. they're just quotes.
Re: Lumber crash leads to 'blowout' sales as prices crater
#96Earlier quoted context omitted.
who has all this money to spend? everywhere everything is so expensive. i make a ton, and this doesn't add up. nothing about home prices seems to add up.
I think people have just increased the fraction of their income they are willing to spend. If people in Austin will spend 50% of income instead of a third prices can go up a lot
People over spending is the only thing that makes sense
Re: Lumber crash leads to 'blowout' sales as prices crater
#97Earlier quoted context omitted.
Note that you can't just cut down a tree and make lumber out of it. You have to dry it out first, which, afaik can take a long time. I don't know about the other stuff though.
Most construction lumber is kiln dried in less than five weeks.
Five weeks is a fucking long time !
Re: Lumber crash leads to 'blowout' sales as prices crater
#98Earlier quoted context omitted.
who has all this money to spend? everywhere everything is so expensive. i make a ton, and this doesn't add up. nothing about home prices seems to add up.
Mortgage borrowing costs are at historic lows.
its still expensive to borrow $700,000, on top of your current expenses. that's an extra payment of $3300, whos got that laying around to wait for a house to be built
Re: Lumber crash leads to 'blowout' sales as prices crater
#99If the price keeps dropping at this rate lumber will be free by December! /s Seriously, this is a welcome correction, and another sign that runaway inflation fears were based on hyperbole.
Wait, people were saying/thought that this was runaway inflation and not a result of supply chain issues because of COVID and tons of people suddenly having to spend way more time in their house because of COVID? Maybe I'm ignorant of the inflation argument more than anything else but it doesn't even pass the sniff test in my opinion.
Low interest rates, QE, stimulus, and rocketing stock prices facilitated the hot real estate market as much as proximate covid policies. You are correct to guess there is a substantial discussion that you're ignorant of.
Re: Lumber crash leads to 'blowout' sales as prices crater
#100"If high prices held you back from building, you are in luck, as the tables have now turned" Except... many builders will find some other reason/excuse where prices are high to keep prices high. We were looking at building a house - talked to builder last November and... looking at $470-$480k range (ballpark estimate). Lumber was going higher, but we'd reduced the house plan size. Lumber kept going up... and up... Th…
who has all this money to spend? everywhere everything is so expensive. i make a ton, and this doesn't add up. nothing about home prices seems to add up.
Stocks only go up