As we close out the year 2020 and plan to welcome the year 2021, here are some things that are pertinent to the construction industry and specifically to the residential construction industry.
1. What will the lumber prices be like in the New Year?
There are many variables and I think anyone telling you they know exactly what will happen is just blowing smoke in areas you don’t want them to. There is no way to “guess” each variable correctly enough to make that statement this early in the game.
No, we have to wait and see, understanding the different avenues that could lead to higher, or lower, lumber prices.
First, we have to consider the election results. With everything in such turmoil, we do not have an absolutely clear understanding of how the inauguration will go. We do not know if President Trump will be able to overturn the current election results with his accusations of fraud, or if Biden will actually be awarded the win and be inaugurated in January. This puts our entire market system on standby, fluctuating costs as the media puts out one article after another, creating massive hysteria and division.
Something that will directly effect lumber costs is the supply of lumber. We get about 1/3 of our lumber from Canada. (They have vast amounts of forests) In the United States, we have been plagued with forest fires, depleting our current domestic supply and Canada has also had forest fires, depleting their supply. This is the old, “supply and demand” issue. Add to the depleted supply a greater demand caused by the sudden home bound worker due to COVID-19 and you get rising prices.
At first, it seemed that only treated lumber was effected, but as the year went on, it has become apparent that regular framing lumber has also become higher in demand, therefore, the cost has risen.
Now, forecast to 2021, when we begin to see the winter turn to spring and the projects turn from inside projects, like kitchens, baths, rec rooms and painting to decks, additions, sheds, etc. This is what I see happening based on the evidence shown so far.
Prices will rise as supply is less than normal. (Possibly an influx of foreign lumber to help relieve the demand, but that is another issue.) Framing lumber is easier and less expensive that treated lumber to cut and store, so you may not see the rise being as high in that market, but the treated lumber will rise higher than it has. The process to treat lumber means that less treated lumber will be available.
You will see other materials become prevalent in exterior construction. Possibly more metal framing, possibly more concrete construction. I think patios will become more popular than decks as the cost will probably become less and the availability of materials will be higher.
Metal framing will begin to gain in popularity as well. There are areas where the contractors are wood framing only and the metal industry has only gotten a small foothold into the area, especially in residential construction. I think you may see that change over the course of the next year, as people want rooms added, or new houses built, but supply becomes harder to get and higher in price.
All in all, as long as people stay working, I think the housing market will flourish, the construction industry will adapt to the changes like they always do. I think that general contractors who build houses will re-evaluate things like spec homes and construction methods, looking for sustainable and cost efficient means with which to build.
I think that those of us who are used to designing with wood need to start understanding other methods and begin to truly learn how to design with those methods. We need to also learn how to share our information with our contractors so they know there are other avenues they can take and learn how to help them, so we can survive.
I think 2021 will be a difficult year, even if COVID-19 is decimated, we will have a lot to come back from and a lot to do to build our country back up.
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