Lumber and Home Prices
Hi Friends,
Today's market headlines were all about earnings beats (there were some big beats) and shortages - both for Lumber and microprocessing chips.
The lumber shortage is being called poor planning as outsized demand for wood (lots of residential construction) and supply constraints, exacerbated by covid, have made demand increase at a greater rate than supply.
To me, this also signals that home price increases we have been seeing are mostly warranted. Low interest rates make higher home prices affordable, and increasing costs to build make existing homes more valuable.
I have a few friends who sold their houses and started renting because they wanted to cash in on their equity and rebuy something better but wanted to wait for home prices to drop. Many months later, they are priced out of the market they really wanted and now stuck renting as they are unhappy with their options and any houses that come to market get swooped up immediately by all cash buyers - it is ruthless out there.
Has this been your experience as well?
Thanks for coming by,
Brian
Note: image courtesy of pixabay.com
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You don’t have to tell me I’m a cabinet/furniture maker. It’s made things very difficult and has ruined the flow of jobs. Pricing is crazy, my furniture grade plywood has had a 175% price increase. I can’t pass that off to my clients.
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Yes.... here in Ontario Canada, houses go up for $800,000 and sell for $1.2 Million ... people are paying in Cash, no Conditions. Everyone is a billionaire, thanks to Shopify, Tesla and Dogecoin. All the kids are buying Porches, Audi, BMWs ... paid in cash.
I heard about the shortage I just didn't know about the effects.
This is going to cause those in demand areas in the country to boom. All around me, houses go above asking every time in that "entry" level housing. Even the entry level housing market is starting to get to a house price level that seems to be out of reach for many even with dual incomes given other typical debts.
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