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“Things Are Out Of Control”: Supply Chain Collapse Leads To Lumber Frenzy, Soaring Home Prices
Biz Patriot ^ | 4-14-2021 | Tyler Durden

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 ...


TOPICS:
KEYWORDS: homes; housing; inflation; lumber; prices; rconomy; realty; supply
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To: A Navy Vet

“Why the high demand when millions are out of work and thousands of businesses closed? I would think there would be a housing glut - a buyer’s market.”

SACRAMENTO
How buyers can take advantage of a bustling Sacramento housing market
Even if a buying a home isn’t in the cards for some families now, advocates say it’s about getting the process started.

Author: Van Tieu (ABC10)
Published: 11:16 PM PDT April 11, 2021
Updated: 11:16 PM PDT April 11, 2021

SACRAMENTO, Calif — The Sacramento housing market might be bustling, but advocates for first-time homebuyers say there’s no need to be intimidated by it.

Andrea Vasquez’s house hit the market on Thursday and by Tuesday, it was gone.

“So, it was really fast,” Vasquez said.

Vasquez said her family received more than 20 offers in the span of six days on their Natomas home in October. Many of them were cash offers over asking price from Bay Area transplants.

“We accepted an offer right away,” she said. “It was someone that really seemed to be kind of an underdog in the fight for real estate right now.”

She said the keys were handed over to a single mother who serves underprivileged children in Sacramento.

“We’re very connected to Sacramento and dedicated to the success of it! “ Vasquez said. “And part of that is making sure the people in the community care (about) the community!”

Despite the competitive housing market fueled by an influx of buyers searching within a low supply of homes, there are opportunities, advocates say.

“Don’t let fear be the reason why you don’t take advantage of home ownership,” said Tanisha Broadway, president of the Sacramento Realtist Association.

They say first-time homebuyers, and those who have historically faced barriers to homeownership, should not be deterred.

“Even though the market pressures are real, help is real!” said Tyrone Roderick Williams, deputy executive director of Sacramento Housing and Redevelopment Agency.

The Sacramento Community Home Ownership Initiative is a partnership between the Sacramento Housing and Redevelopment Agency and the Sacramento Realist Association, a minority trade organization committed to increasing homeownership opportunities.

They’ve partnered with two banks to offer up to $22,000 in down payment assistance to qualified families.

“It’s a sellers market so to speak, but this a buyer’s opportunity to get connected to information and resources that will help propel them into home ownership when they’re ready,” Williams said.

Even if a buying a home isn’t in the cards for some families now, advocates say it’s about getting the process started. Their mission is to help families ready themselves for homebuying and walk them through that process.

https://www.abc10.com/article/news/local/sacramento/sacramento-housing-market/103-e0a90fe5-6a7a-4dba-958c-dd64d61efd4a


81 posted on 04/14/2021 11:01:21 AM PDT by Grampa Dave (Still alive, in spite of being stupid and getting vaccinated twice!!)
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To: microgeek42

There are worldwide shortages of just about everything.
I buy commodity type goods for work, just about everything we purchase has the longest lead times I have seen in 28 years of work. On top of that, double-digit price increases.


82 posted on 04/14/2021 11:01:24 AM PDT by monkeyshine (live and let live is dead)
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To: central_va
Here's a tip: PAY MORE.

Easy to say, hard to do.

We have a job available that is basically folding and boxing t-shirts. The individual does have to call the customer and let them know their order is ready for pick up. Monkey work.

We used to pay $8 an hour to high schoolers or college kids looking for part time work. We now have to pay $10.50 an hour, which it really isn't worth. Worse, other youth friendly jobs (national franchises) are offering $13 to $15 an hour to start. Funny thing, those employers have become really picky and many kids put in their applications, only to find some middle aged person has taken the job. The problem is that the kids really think $15 an hour is now what they deserve.

Increasing wages to a minimum of $15 an hour would increase our payroll by about 20%, or about 3% of our gross revenues. With a net profit of about 10%, that 3% is painful, so we raise our prices.

The problem is, everyone in our supply chain is doing the same thing, because they all have the same problem. We recalculated our prices taking into consideration the announced price increases. If we just increase to cover costs and keep the same profit in dollars, we need to increase our prices by about 12%. If we want to keep the same profit percentage, the increase in our prices will have to be nearly 20%.

Multiply this by all companies, and all suppliers, and combine it with the dropping value of the dollar due to excessive Federal spending, and you have a cataclysmic disaster that will "reset" our economy.

Fasten your seatbelts...

83 posted on 04/14/2021 11:02:58 AM PDT by Crusher138 ("Then conquer we must, for our cause it is just")
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To: KevinB

I think you’re right about people worrying, but I also think the Fed is going to keep the rates artificially low to protect Harris, CornPop and their administration. They need people to keep borrowing money and high rates won’t allow that.

My uncle’s buddy just had the contract on a new construction canceled by the builder. Work didn’t start and with the rising costs the builder would have been underwater on the build, given the contract price, so he had to pull out.

Everything revolves around oil and the ability to get it out of the ground and put it in a fuel tank or take old oil and turn it into rubber and plastic. Ol’ CornPop, or should I say his puppet masters, are dead set on destroying the industry and everything else.


84 posted on 04/14/2021 11:03:45 AM PDT by qaz123
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To: alternatives?

Why can’t the fatties drive trucks?


85 posted on 04/14/2021 11:08:23 AM PDT by bigdaddy45
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To: blam

As a guy who pays cash for everything.... bring it on


86 posted on 04/14/2021 11:09:26 AM PDT by bigdaddy45
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To: outofsalt; alternatives?
"LOL. There is a Home Depot video on how to use a tape measure.""

Which end of the shovel does the digging?

=================================================================

Why...the middle end, of course!

87 posted on 04/14/2021 11:10:56 AM PDT by rxsid (HOW CAN A NATURAL BORN CITIZEN'S STATUS BE "GOVERNED" BY GREAT BRITAIN? - Leo Donofrio (2009))
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To: blam
. 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).

creating money out of thin air leads to insane increase in the money supply = higher demand = increased prices = housing price bubble

low interest rates = higher demand for houses = higher prices = housing price bubble

too easy credit for years led to housing bubble of 2006, which crashed and led to the recession of 2008. Banks should not be making it easier to borrow to buy houses

88 posted on 04/14/2021 11:13:40 AM PDT by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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To: Hojczyk

Houses in Florida still have wood roofs and trusses and struts behind walls holding up wallboard. Lots of wood used in block houses...


89 posted on 04/14/2021 11:24:37 AM PDT by GOPJ (We need a better class of 'elites' - the ones we have now are more like stupid white trash...)
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To: mjp
"too easy credit for years led to housing bubble of 2006, which crashed and led to the recession of 2008"

Which in large part gave us an unknown junior senator with a highly questionable background known as Barak Hussein Obama just 7 short years from 9/11.

Where do we go from basement Joe Xiden and the non-natural born Citizen anchor baby "woman of color" once this bubble collapses?

90 posted on 04/14/2021 11:28:41 AM PDT by rxsid (HOW CAN A NATURAL BORN CITIZEN'S STATUS BE "GOVERNED" BY GREAT BRITAIN? - Leo Donofrio (2009))
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To: bigdaddy45

The fatties can drive the truck but you still will likely have more health issues either now or down the road.

Not sure I would want to hire them for any physical job like a sawmill in the article.


91 posted on 04/14/2021 11:32:16 AM PDT by alternatives? (If our borders are not secure, why fund an army?)
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To: cuban leaf

Prices for standing timber have not risen dramatically. It is the prices from the mills that are nuts.


92 posted on 04/14/2021 11:32:33 AM PDT by cornfedcowboy ( )
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To: Sequoyah101
about giving....it does get very discouraging....I once worked with a group that to encourage women NOT to abort, we would supply all sorts of materials...pregnacy clothes, baby items, baby furniture, formula, etc....

one time we had a meeting so a woman who we've helped could talk about how important we were......she was unmarried and had three different baby daddies....

one is a mistake...two?...three?....its a trend...

no more...

93 posted on 04/14/2021 11:36:10 AM PDT by cherry (we are the Remnant)
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To: microgeek42

Yeah,

Lead times on some tech gear is still incredible.

Suspect that we are goign to see major shortages of all kinds of stuff for lack of packaging materials as well by summer.

Keep those pantries and freezers full folks, gonna get interesting.


94 posted on 04/14/2021 11:53:54 AM PDT by Manuel OKelley
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To: blam

95 posted on 04/14/2021 11:54:50 AM PDT by Travis McGee (EnemiesForeignAndDomestic.com)
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To: reed13k

I’m currently looking for a new job.

If the salary range isn’t listed, I don’t bother. It shows me you’re not serious about hiring and I have better things to do with my time than regurgitate my resume into a bunch of forms, take PTO time for an interview, only to find you’re paying peanuts.

You think anyone would venture into a car dealer if it was a total mystery how much the car cost?

Just MHO from my side of the crazy kludge that is the job market.


96 posted on 04/14/2021 11:56:32 AM PDT by chrisser
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To: 4yearlurker

That is insane!
Glad I’m not building right now


97 posted on 04/14/2021 11:56:57 AM PDT by Zathras
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To: Grampa Dave

holy hell

I built a ~ 2000 sf wrap around deck in the late aughts on my old house with 2x12 joists and 2x6 decking and think it set me back about $25 k in materials but we had some milled ourselves and milled our own posts and such ...cannot imagine what it would cost to build that thing now.


98 posted on 04/14/2021 11:57:37 AM PDT by Manuel OKelley
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To: ImJustAnotherOkie

Yep.

The question is who are they going to move in them.


99 posted on 04/14/2021 12:27:58 PM PDT by redgolum (If this culture today is civilization, I will be the barbarian)
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To: blam

Anyone see interest rates going up? I’m past the age of borrowing money, mortgage paid off, so a decent rate of return on CD’s/savings would work better for me.


100 posted on 04/14/2021 12:37:40 PM PDT by CodeJockey (Dum Spiro, Pugno)
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