Lumber prices down 11% YoY
calculatedriskblog.com
calculatedriskblog.com
Considering that books are written on the subject, it's not reasonable to summarize what's happening in Florida in single comment. The subject may be easily dismissed here as trivial in the carbon tunnel vision of wondrous 'hackers', but it's very real and recognized by many.
If you're young enough, you'll see the future look back in great disgust at what has been done to this state and others. If all newcomers to Florida were constrained to visit only Disneyland, they'd probably and understandably think it was an accurate representation. Lennar is Disney, without any of the cool stuff.
Seems this is could be a direct result of warming:
"The Asian form, Ca. L. asiaticus is heat tolerant. This means the greening symptoms can develop at temperatures up to 35 °C. The African form, Ca. L. africanus, and American form, Ca. L. americanus, are heat sensitive, thus symptoms only develop when the temperature is in the range 20–25 °C."
Something similar happens with Spanish olives, and with them, olive oil. Most Olive groves are not irrigated, because they historically don't need to be, and we've had two very dry years. Production is down to 50% of what it was, and irrigating isn't cheap or easy. And again, replanting isn't a sensible choice, as the trees don't mature in a season. We can plant different kinds of corn and wheat in different places as weather changes: A winter that is a little too short, and too long, and big ag will sell you a different bag to adapt to your updated planting date with minimal yield losses. But not with trees.
Same with my own cherry trees. Beautiful flowers. Looked like it would be just as good as last year's awesome harvest. Then frost at just the wrong time. I had maybe a couple handfuls of cherries. Not even enough on the trees to warrant putting up the bird netting.
[1] https://www.pandemicoversight.gov/news/articles/update-three...
Just because "lots of people not being able to go to their job and get paid" doesn't mean all or even most were in the same situation; the numbers[1] tell a different story, and that doesn't even begin to account for the aggregate impact of nationwide loan pauses, or the irrational exuberance in equity/crypto markets at the time.
And during a pandemic, that is almost free, since many people are stuck at home with nothing to do.
It seemed like a combination of fear and restrictions, plus free money at least in the US. I saw hourly rates for physical labor jobs go through the roof, double the pre-response rates and still couldn't fill positions.
Could do the same even if you did..
Not insignificant but not the majority either.
It sucked but plans were in motion pre-covid and waiting a year (or two? Who knew back then) would have meant missing the window that minimized disrupting our kids' school lives.
Sometimes timing matters more than other factors.
However, in addition, we can see that nominal prices remain stable over multiple 5 year periods. So yes, healthy.
Too bad that this very good presentation on a decent blog has such a clickbait headline. I guess that's the world we live in. Someone somewhere is going to say this is the death of lumber or other such drama, based on just the title of the post though.
I am a little surprised things like chip and plywood suffered, I guess when you cannot get timber, you go to manufactured wood (which in some circumstances actually has better mechanical strength, but most people think has lower aesthetics although opinions differ on this) and maybe even as a downstream (sometimes, waste+, certainly different cuts/grades of timber go in) informed component of construction it "costs more" in these times.
The whole Price/Value/Worth thing is really confusing. Timber is amazing. Burying it inside the carcase of a home feels at first glance like "why not something else" but the entire tooling of construction crews can be built around "its wood" not "erect this premade steel form" or "lower the entire wall with insulation, wires windows and pipes into place" as they do on 'grand designs'
The problem really is that price isn't just a pure supply signal. People treat the ratchet up and down as distinct arcs with their own dynamic. It goes up faster than it comes down unless you know something about the future to make it worth dumping at any price. With wood, there isn't much surprise in the future driving price down, only suprises driving price up.
"Building codes to forbid wooden housing due to giant space termites" wasn't on my roadmap for 2024 but you never know...
i thought timber wasn't the bottleneck here, at least not in the US? from what i know, US timber has a glut of supply, something like 40 years worth of inventory.
maybe you meant "lumber"?
I am less sure why the same thing happened here in Australia because we have a huge logging, processing and distributing system domestically and for export, but we also had massive shortages of framing supplies. I suspect it was the timber/lumber distinction, maybe the woods available on-shore weren't being directed into framing and this depends on cheaper sources off-shore, which just disappeared.
Our cost of construction has gone up so much a lot of builders are going bust. It's causing angst in a hot market, house prices and rents out of control, and the government intervening but the industry says it can't build that much more than is on the table, its not lack of desire, it's lack of capacity in construction overall.
Most of the fixes simply increase housing cost inflation. But this glitch on framing wood and related products, was really bad for us.
Prices in Europe still haven't dropped back to their original levels. In my country pellets for heating were €150 per ton in 2021, €600 per ton (and much worse quality) in 2022, and now are around €300 per ton.
https://www.nbcnews.com/business/consumer/chicken-wing-price...
I've yet to find a restaurant, however, where menu prices for wings aren't at least 20% higher than 2019 or so -- often much higher. Similarly, I have a hard time believing that lower lumber prices will reduce new construction costs.
Maybe I'm too price-conscious, but I'd expect demand to go down over time as the rising interest rates affect daily life.
Personally, I think there's a lot of overlap between heavy DD users and people on social media complaining publicly about how tough it is to make ends meet. Just a guess.
So an 8' long board 12" wide and 1" thick is 8 board feet. Or half as wide and twice as thick (6" x 2") in the same length is also 8 board feet. You get the idea.
Just like with board feet it doesn't say anything about the actual dimensions. Also, I don't think it's much better as a unit than board feet either, both have very unclear relationship to the actual amounts you need. You'll always need to do a pretty complex calculation to figure out how much you'd need to buy. The pricing is mostly useful as a comparison to look at relative or day to day pricing differences.
A board foot is a measure of volume - with an implicit third dimension.
So you could just use the SI unit for volume.
A board foot ~= 2.4 litres.
This seems a bit silly though, as timber is not fungible in the way you'd expect a volume of something to be.
As noted by sibling comments, you very much can buy timber in cubic metres - a convenience for costing / transport - but you're not going to buy timber without knowing dimensions of the individual lengths.
Dimensional lumber is the original shrinkflator
So in a 10ft long 2x4 it would be the actual size of a 2x4 (1.5"x3.5"x10').
A standard board foot would be (1"x12"x12"), or any other math that makes up the same volume.
Board thicknesses are measured in the "quarter system" - 4/4 (pronounced "4 quarter", that is 4 quarters of an inch) is a 1" thick rough-rough sawn board; 8/4 (8 quarter) is a 2" thick rough board. As this is rough sawn (super rough and unsightly finish), you usually lose at least 1/8" while finishing the board, so a 4/4 rough board gives you something around 3/4" finished product.
This leads to 5/4 being another fairly common dimension, as you can get a 1" finished board out of it. 6/4 and 12/4 are somewhat common as well.
It might seem like an "ugly dimension" compared to something like m^3, but its really built around speed. Watching someone skilled price out an enormous stack of mismatched lumber (width, thickness, and length) in seconds with a lumber rule is always a fascinating process to watch (https://www.popularwoodworking.com/techniques/the-lumber-rul...).
Usually the $/board foot increases slightly at higher dimensions as thicker lumber is harder to produce. I got some 4/4 black walnut for $12.80/bdft last week; 8/4 was closer to $16.
Edit: This is also why 2x4s are actually 1.5"x3.5" - historically they were 2x4 rough sawn lumber, but .5" is lost in both dimension when producing finished boards you purchase in the store.
In the hardwoods I usually work with (walnut/maple/padauk) its fairly minimal. A nominally 4/4 board usually comes in about 1/16" small; which is a lot less than I lose running it through the planar. Some of that could be the sawmill skimping out too and cutting just a bit undersized....
I'm finding quoted numbers between 2-8% volumetric shrinkage (https://www.wood-database.com/wood-articles/dimensional-shri...), which is still quite a bit less than you find in the small dimension of a 2x4 (2"-> 1.5%, or ~33%)
To get a 1" finished board you need to start with at least 5/4, because you may have some twist in the board and you can flatten alternating sides to make it flat. If you were just running it through a machine without paying attention, your might need to take that same board down to 0.75" to get it flat.
But they aren't wasting time like that for framing lumber. But when your lumber is expensive, it's worth a little focused labored to use more of the board
I imagine there are people all over the world doing the same tricks with metric measurements.
Box of gloves is very close to pre covid level.
Used to be $2/box in 2019. now you can get it around $2.5 box.
CPI less food and energy[1] over the same period increased +17.3%...so currently priced worse than nominal inflation.
Of course, this baseline reference assumes shrinkflation hasn't impacted your "box" unit.
Annualized, that is 5.7% inflation. (1.25 increase ^ 0.25 for 4 years elapsed). So not pre-covid levels, but not nominal 25% annual inflation. Still a little over 2x desired annual growth rate.
* https://omny.fm/shows/odd-lots/why-the-price-of-lumber-has-s...
* https://omny.fm/shows/odd-lots/stinson-dean-on-the-lumber-cr...
https://www.calculatedriskblog.com/2023/10/vehicles-sales-in...
Not necessarily a sign of health, but playing catcup with hisotrical trend.
For new cars, there was a dealer/scarcity dynamic that seems to have allowed dealers to charge more than RRP, and consumers were paying it. I wonder if that has had an impact.
Definitely come down, but still quite elevated
And don't say "so pay labor more" because there is a labor shortage in every single industry. If you pay more for job x, job y will also go up, until everyone goes up and then inflation is higher.
And yes, "just pay more" is the solution. There is no shortage of Lamborghinis, but there is a shortage at $1000. Machine operators near me are paid $12/hour, the equivalent of 2009's minimum wage after inflation adjustment.
Yes, wages are too low. Yes, it's good to pay more money and for everyone to be forced to pay more money for wages. If you want cheap services built on extreme inequality, you're free to move to a 2nd or 3rd world country.
You might not have thought that through - if you actually did that, then everything costs more, and there is no net change in affordability. All you did was cause inflation.
If you want to help everyone, without drawbacks, then increased productivity is the way to go. Then things are cheaper. Services are harder to improve though.
> There is no labor shortage.
Unemployment is historically low, so that's not correct.
Is your mental model of goods and services that 100% of the cost is labor, and that everything is sold at-cost?
This makes absolutely no sense.
Unemployment is a flawed metric. Prime age employment captures everyone, not just those who fall under the government's many convenient exceptions.
or would the economy be the fun part of the game, automating and driving down prices?
I think games like factorio, the fun comes from automating and being less of a mental burden.
I'd be interested to see someone attempt market manipulation IRL to affect their game though.
You used to be able to get 3/4 maple 4x8 for ~$50, now it's $85 at Home Depot and over $100 from the local lumberyard.
Is it because most lumber volume is performed under commercial contracts? The DIY market is too small to chase?
High prices are their own cure. Given high demand and high margins, people will increase production to meet demand. And yet this is not going to happen because interest rate hikes have doubled the price of new construction.
High interest rates may lower or slow real estate appreciation in the short term, but they also increase it in the long term by killing production increases.
https://www.nbcnews.com/data-graphics/tough-immigration-laws...
https://www.cbp.gov/newsroom/national-media-release/cbp-rele....
It doesn't mean 2 million people stay illegally per year.
In Asia, for example, they have doubled.