Hacker News Reader

Comment by xyzzyz | Hacker News Reader

Good, lumber has been too cheap lately, which was pushing construction costs down and depressing house prices.

Am I completely out of the loop or is this sarcasm? I thought the lumber costs were skyrocketing and housing prices were too. At least in the US, I thought this was the case.

Sarcasm, the exact opposite is true.

Not OP, but it is sarcasm. Lumber is at record prices.

https://tradingeconomics.com/commodity/lumber

Wow, history goes back to 1979. Roughly same 200-600 USD envelope until 2020.

Are those 2021 dollars?

The 1979 value of $200 would be $735 today.

Sheathing plywood and OSB are now basically as expensive as cabinet grade hardwood plywood. It's insane.

In many places cabinet grade hardwood plywood is cheaper! I could sheath my roof and house with 3/4" cabinet grade maple for the same price as "cheap" ugly OSB.

Dry sarcasm is ambiguous online.

Normally I would agree with you but lumber prices have been so high in the last few months I'd say the sarcasm is warranted.

right, what we needs is high housing prices.

Now I know how the people who got in early on real estate in SF or Seattle feel.

This is a great narrative, until we remember that lumber is a tiny fraction of the price of a house.

It was, but now it's actually a very significant component. In many regions, the cost paid for lumber went from like 5% of the cost to ~20%!

It still adds 20-30k when building a new house so not exactly a trivial amount.

Which in practice just means that the land didn't get a chance to appreciate by 20-30k.

Houses cost every spare penny that we can save up to pay for them. Whether the pennies end up going into raw materials, or speculators doesn't really matter to the end purchaser.

If labour and materials became free tomorrow, the cost of housing would remain unchanged, but the cost of land would rise to pick up the slack.

Thank you for a very insightful comment. Houses are worth what people will pay for them, and when you can borrow money so cheaply they are worth a lot! What else are you going to buy? Having a nice place where you spend a lot of time that is near things you do be it work or recreation is worth as much as you can afford to pay - a house in a good location saves precious minutes of your life!

Reply on news.ycombinator.com