Lumber Prices 2021: The Impact of Rising Costs
The extreme lumber price increases are impacting homeowners and contractors alike.
Lumber costs are at an extreme high. In 2021, lumber prices are now three times higher than they were pre-COVID. That’s because after people settled into quarantine life at home, they began home improvement projects large and small. Many of those projects required wood: 2x4s, plywood, molding, etc. There were so many projects happening around the US – even around the world – that it resulted in a lumber shortage. That unexpected shortage caused a lumber price increase that went through the roof (pun intended).
Rising lumber prices have impacted the housing market in many ways, affecting both homeowners and general contractors. Here are the three biggest impacts of lumber prices going up, especially when considering those prices are expected to continue increasing in 2021.
Impact 1: The Lumber Shortage
Not only are lumber prices now three times the cost they were pre-COVID, but wood can also be incredibly hard to source, particularly for large home construction projects. The lumber shortage includes everything from 2x4s to floorboards to doors. The high demand for new home construction and home improvement projects have caused the lumber supply to plummet as well as shipment delays. All this adds up to a more expensive project that takes longer to complete, which negatively impacts both the contractor and the homeowner.
Impact 2: Unexpected Costs
For home builders and general contractors, there’s often a delay from when a client receives the bid/contract to when he/she fully commits. Homeowners simply like to take some time to plan and prepare, hence the delay, which can be as long as a couple of months or more. This is tricky because, by the time a bid is finally signed, the prices likely have increased. So, we always explain this to our clients to avoid surprises, but no homeowner likes the idea of paying more later – and rightly so!
Likewise, this is incredibly tricky for construction that's in progress. Prices inevitably are going up during the construction phase. As the contractor, we typically find ourselves taking on extra supply costs, which puts us and our crew at a disadvantage. We do this because we hate going to our clients to tell them the increased lumber prices might take them over budget.
Impact 3: Protecting the Client Relationship
There are definitely times, though, when the supply costs are simply too large for us to take on ourselves. This is often due to a project being large in scale, requiring a lot of lumber. If the lumber price increases are that extreme, we have no choice but to charge the client for the increased supply costs. No contractor ever wants to deliver this news, and, more importantly, no client wants to hear it. So, such a situation could cause a client to lose trust in a contractor even though it’s completely out of the contractor’s hands.
When Will Lumber Prices Go Down?
If only we had a crystal ball! As a contractor who does projects of varying scales, we’d love to know when lumber prices will go down. But, unfortunately, all we can say is that it’s not expected to go down any time soon, even within 2021. There are simply too many remodeling projects and new construction happening in the wake of people needing more space and revitalized interiors. In the meantime, we continue to do everything we can to keep our projects on budget and on time to ease any burden on homeowners.
Do you live in the Los Angeles or San Fernando Valley area and are looking to do a home remodeling project? We can help. Contact us today for a free quote.