Posted on 04/14/2021 9:33:00 AM PDT by blam
With median prices for both existing and new homes at all time highs, and soaring at a record annualized rate of almost 20%...
... increasingly more Americans find themselves priced out of homeownership, while still cautious banks refuse to lend them the mortgages they so desperately need to live the American Dream (on credit).
And unfortunately, since most US houses are made out of wood, we have even more bad news: home prices are about to get even more expensive if for no other reason than the frenzy sweeping the lumber market is set to keep going through the summer peak of US home building as labor shortages and depleted inventories mean that supplies can’t keep up with skyrocketing demand.
As Bloomberg summarizes what we have observed across the past few months of torrid, sometimes panicked, ISM Survey Responses such as this one...
“Things are now out of control. Everything is a mess, and we are seeing wide-scale shortages.”
... there is an unprecedented shortage and tightness across the entire timber supply chain. Sawmills have had trouble ramping up fast enough to meet the surge in demand. Meanwhile, trucking delays and worker shortages at lumber yards have added to costs, which are now getting passed on to consumers. Worst of all, the bigger cost component of any new house l Lumber prices - have surged more than 60% to record highs this year, and analysts aren’t expecting any relief until late 2021, if not later.
That, according to Bloomberg, will keep pouring fuel on red-hot home prices, making ownership less affordable for large swathes of the population (one would almost think it was the Fed's plan to destroy the middle class). Soaring wood costs have already added more than $24,000 to the price
(snip)
(Excerpt) Read more at bizpatriot.com ...
And when the tenants don’t pay and Joe says you can’t evict them & they trash the place? We are selling an apartment in NYC and I considered renting instead for a nanosecond.
I’m getting out before the people who think it will be going back to normal soon have wised up.
Mr. GG2 just paid $55 to rebuild my 4X8 garden frame.
He even jokes that if it wasn’t for serial killers, they would have no new employees at all. They were getting things back to near normal until the latest stimulus checks. They lost several employees due to that.
>I have 25 acres of hardwood trees. This may be a good time to get it logged.
The prices of unmilled lumber isn’t really at any particular premium. Now if you could mill it yourself, you could capture that premium.
Add to the list Miller Lite beer in bottles. Bars around here can’t get it now.
I talked to my home owners policy agent... she said policies are going up all over the place because building supplies are going up so much... I got the feeling it wasn’t just lumber...
They don't care because they believe (know) that the "government" will forgive their loans, at least in part to begin with.
You don't mind paying those higher taxes, or increased cost of goods...do you? /r
And, this line of thinking is increasing with the steady raise of socialism/communism/marxism in this country.
“Or don’t know how to use a hammer.”
LOL. There is a Home Depot video on how to use a tape measure.
Core CPI is still around 2%. We aren’t seeing wage inflation to go with the increases in prices. Commodities are blowing up and they all seem to be due to supply chains not be able to meet demand of reopening.
Most employers are not raising wages. They are complaining about the supply system.
I am waiting to see if the long term US bond yields have stopped rising and will begin to drop again. Seems that all of the helicopter money from treasury is being Hoovered up by the Fed for reserves.
We have over 20 acres mostly wooded. I am wondering how we could harvest our own lumber for building and repairs.....
> Why is anyone in their right mind building anything right now?
If you’re looking to sell it, you can almost name your price. Thats why. ;-)
Copper is up because the mines went offline during Covid but demand ran steady. Then China stepped in and bought up a good bit to meet their internal production needs.
Not a real increase due to inflation.
I am talking about individuals.
Still can’t figure out why anyone would buy at these prices. Little piss ant houses going for $200 a square or more is nuts.
“If you can’t afford a a house/mortgage, don’t buy a house. Banks don’t “owe” you anything and you don’t have a “right” to homeowner ship. There is no shame in renting or living with family to save money to buy a place when the bubble pops.”
In California, housing prices in good areas are increasing a couple of % per month to several %.
So it becomes tougher to buy a home in many places.
A woman, we know, almost caused riots at a meeting of how to provide lower cost housing for “new comer’s” (code words) in her California Community.
She went up to the mike and said, “How about her kids who grew up in that community and can’t afford a home. So why in the hell were her Tax $’s and ours’s going to pay for low cost home for the “new comers’s” (again code).
She was both booed and cheered.
Add to this the stimulus was WAAAY too lush. This whole covidcation has been a boon to working people. The stimulus is more money than they have had in their lives.
Bingo!
It's good to see someone who understands the situation.
I'm a landowner with a lot of timber and you pretty much can't give away pine timber right now, the prices are really, really low. Meanwhile lumber prices are through the roof. The bottleneck is in the sawmills, the laborers that would normally work the mills are sitting at home making more money than they've ever made in their life drawing extended umemployment benefits and stimulus checks. It shouldn't come as a surprise to anyone that if you pay someone more money not to work then they'll choose that over punching a timeclock, it's just an extension of the welfare state we've seen over the last 50 years.
It's easy to say "just pay them more" but it's not really that simple, businesses don't reorganize around bubble times, that's a recipe for bankruptcy when things crash.
PAY MORE
There are only so many qualified employees. If they increase what they pay, they may have a hard time and incur extra expenses trying to claw it back when prices decline. Perhaps more prudent to wait and see if spike is temporary.
Which end of the shovel does the digging? Asking for a friend.
Whaddya think? Wood just grows on trees?
Doesn’t Santa deliver it to your new driveway during his off season?
Another example.
https://www.cnn.com/travel/article/france-domestic-flight-ban-emissions-scli-intl/index.html
Why should you fly? Do you think you are important?
This story is about France, but it is coming here. Since Amtrack has DC to NY runs, that means no fly for peons.
From the 1930’s until today, I have lived in the best of times in America, the best of countries.
But it is over.
As the song goes...”We t Thought it Would Never End”.
Only people who have run a successful business understand that you don’t set undue precedent on wages. You manage unusual conditions with incentives but not base wages.
Interesting that timber is low as you say. Not too unexpected. I really do hope that some people with this outrageously priced material in stock get to choke on it. I also hope I get to see people who have paid the equally stupid prices for housing live with it for a long time or take a bath to sell it. Why? These stupid conditions are borne of greed and more stupidity. Lessons have to be learned. The crash always comes and this time it can’t come soon enough for me.
I have always been more wary of booms than the bust that follows. I have watched nervously, in horror at times, the euphoria laced rocket ride up knowing it can’t last. More than once I have longed for moderation and steady but that is not the way things work.
Add TAX FREE to the lush benefits now being handed out and you can easily see just how high the incentive is to NOT WORK AT ALL.
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