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Comment by artursapek | Hacker News Reader

Crazy to think people were doing construction and remodeling at 3x typical lumber costs

I wonder how much of that remodeling was to accommodate a newly required home office due to WFH. If you really needed to have a separate office (eg kids), you simply had to grit your teeth and bear the cost.

Also there was little else to spend your money on. It is easy to spend ten thousand on a family vacation and for a couple years you didn't take one. Plus all the eating out you didn't do, movies you didn't go to and whatever else people stopped doing.

It seems weird to think of money as something you have to spend. We just added it to our savings.

If you didn't have the money, you would make it work...

Could do the same even if you did..

Lumber is not that big of an input to total construction cost.

Right around 15% on a traditional stick build.

Not insignificant but not the majority either.

And less than that as you mover higher-end!

Labour is the biggest cost of house building.

And during a pandemic, that is almost free, since many people are stuck at home with nothing to do.

You best believe it wasn’t free. Especially for smaller jobs like flooring it’s often priced based on material. Everyone I know in construction was making $$$ in pandemic

I think they were talking about DIY. People couldn't really travel or do things outside the house so they might start home improvement projects themselves where as you might be more inclined to hire if you're busy with outside things.

I assume it varied greatly by region, but my experience was that it was extremely difficult to find workers during the pandemic response.

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.

GP was suggesting that many people found a supply of labor in the mirror while brushing their teeth.

Labor was not free during covid, it was harder to find than ever

Built an entire house at the peak :(

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.

These things are always cyclical, but FOMO is a tough emotion to combat.

Let's hope being stuck at home for a year is not a cyclical event! That's what drove a lot of it, not FOMO. Building a home office, using a kitchen multiple times a day, schooling from home...

That doesn't drive people to pay 3x. What does it is the fear that prices will never come down or that this is a normal.

It was only 3x the cost because people had 3x the excess money.

Nonsense. The lumber pipelines were interrupted. It was simple supply and demand unlike all this insane price gouging the grocery stores are pulling off now.

Right - demand was up because people had more money.

No, people had more time, DIY projects exploded, and that was compounded additionally by supply chain issues (and closures) like everything else with COVID.

Yes this is correct.

Demand was up because people had more _time_

And money was being printed left and right

How does that end up in the hands of regular people doing renovation or home builds?

I'm sure some of it is down to LLCs owned in their names that took out PPP loans from which contractors building a home office were paid out.

What fraction do you expect that was? Even just giving a completely unfounded guess.

The useful question isn't that fraction, though I'd bet it's larger than you'd expect, but how much free money was injected into the economy this way. I'm sure that's a consequential sum, especially if you expand the money we're looking at to include corporations paying other corporations inflated rates, coordinated by having execs/board members in common.

Were you asleep[1] the entire time? And that's just what Average Joe was pocketing.

[1] https://www.pandemicoversight.gov/news/articles/update-three...

Guess you're forgetting the whole "lots of people not able being able to go to their job and get paid" thing during this time, right?

The context of my remark was in response to how "money being printed left and right..." --> "...end up in the hands of regular people doing renovation or home builds?"

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.

[1] https://fred.stlouisfed.org/graph/?g=19GH4

Material costs are not a lot over half the cost of building (in my experience), and lumbar isn’t all of that.

Sometimes timing matters more than other factors.

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