Experts assess Katrina's damage to lumber industry, home building

http://www.lubbockonline.com/stories/091705/bus_091705003.shtml ^ | Saturday, September 17, 2005 | Associated Press

[WestTexasWend]

SEATTLE (AP) - Hurricane Katrina destroyed thousands of homes, but it was the damage to timber and sawmills in the storm-ravaged region that immediately drove up the price of some construction materials nationwide.

Now, as the plants reopen and the focus switches to reconstruction, experts say prices should begin to stabilize. In the long term, some say the rebuilding effort will have a minimal effect on construction costs elsewhere in the country - and could possibly even lead to changes that make home building somewhat more affordable.

"In terms of somebody buying a house in California, there's going to be some ripple effect, but it's not going to be overwhelming," said Michael Carliner, an economist with the National Association of Home Builders.

The devastation Katrina wrought on homes alone is thought to be far worse than that of Hurricane Andrew in 1992, with perhaps hundreds of thousands of homes damaged or destroyed. But experts say the rebuilding process could take years, and could be spread over a wider geographic area if some residents choose never to return to storm-ravaged areas and settle elsewhere. Those two factors alone could help dampen any spikes in pricing, or at least make it more difficult to judge the impact.

"This is quite different from the typical hurricane already in that we're still trying to literally bail out the city of New Orleans," said Ken Simonson, chief economist with the Associated General Contractors of America.

"It's complex because there is much more damage to the region and more damage to the economy, but also more people moving out of the region," he added.

Also, because rebuilding is expected to take so long, Simonson said it will be difficult to parse out the effect of the rebuilding from other factors that affect U.S. home prices, such as mortgage rates or the oft-predicted slowing of the nation's housing boom.

[stopem]

Wait do you hear that sound?? Ca-Ching, Ca-Ching, Ca-Ching.

[hoosiermama]

Think I'll buy more Home Depot stock.

[lastchance]

I hope the construction industry will realize there are alternatives to site built frame construction. Especially in N.O. where Formoso termites had devasted so much of the housing stock. One alternative is pre engineered light steel frame construction. Good info about one company Genesis can be found here. http://www.genesistp.com/whatwedo.asp
Since we the taxpayers are going to fit the bill for rebuilding the gov't needs to find the most affordable construction method without compromising life/safety and building codes.
They might also consider opening some of those military bases and letting people build their own city on them.

[ClaireSolt]

Yes, interesting take.

[Beagle8U]

Its too obvious to buy HD or lowe's stock now. Everyone Knows it will go up, as will all material costs for home building.

If you want to make money off this, buy into a salvage company that will get paid to tear the homes down and re-sell the used materials.

The easiest money you can ever make, is by picking up the money that others throw away.