Here’s how rising lumber costs have impacted our real estate market.
What’s going on with lumber prices? How are they affecting the real estate market? Due to COVID, lumber prices have nearly tripled over the past year. If you’ve tried buying a 2x4 or piece of plywood from Lowe’s or Home Depot lately, you probably noticed that prices are crazy.
This has added between $24,000 to $30,000 to the cost of building an average home. In some ways, this has helped the resale market. Instead of building a new home, a lot of folks are wondering whether they should buy a resale home and renovate that—or even just stay in their current home and add an addition. My wife and I are having this same conversation, so I’m right there with you!
“With appreciation rising, costs are going up, but it’s still a great time to buy a home.”
The good news is, lumber is a commodity, and the trend line on the commodities market had been going up until about a week before the recording of this video. It will be interesting to see if this dip will translate into lower construction costs long term. The other good news is that the lumber supply is increasing. During the thick of the pandemic, lumber mills shut down and created a huge imbalance between supply and demand in the new construction market. Demand is still strong, but supply is catching up.
On top of that, interest rates are still falling, which has kept homes affordable for a lot of people, historically speaking. With appreciation rising, costs are going up, but it’s still a great time to buy a home (if you can find one). That said, if you know someone who’s thinking about selling their home, have them give me a call. We’re on the lookout for inventory, and we’re getting fantastic sale prices for our clients’ listings. If you’re a buyer, my team and I can help you too.
If you have questions about our market or any other real estate needs, feel free to reach out to me as well. I’d love to help you.
