Record lumber prices adding to new home sale prices further crunching Colorado’s housing market
A number of factors have forced lumber prices up, but many of them were around before the pandemic began
The Colorado Sun
With housing demand pushing lumber prices to more than double what 2x4s cost a year ago, workers at the Allweather Wood manufacturing plant in Loveland are treating lumber as fast as possible.
But they’ve run into issues aggravated by the coronavirus pandemic. Not all employees returned to work after a brief closure last year. Staffing is down nearly 20% compared with pre-pandemic levels of 44 people. The company has several entry-level positions open, which start at $18 an hour, provide training and include a $1,000 bonus.
“We’re running at full capacity, but we are short labor and that’s putting a lot of pressure on our crews,” said J Gonzales, director of sales and distribution for Allweather Wood/Humboldt Redwood. “It’s kind of a cyclical thing, but since the pandemic, it seems to have gotten worse. It’s almost the norm now where we’re always looking for workers that want to get into the construction business.”
The labor shortage, an issue before the pandemic, is among a number of contributing factors to the 200% and higher spike in lumber prices, industry watchers say. After a pause caused by the first COVID-19 stay-at-home orders, the construction industry was deemed essential, got back to work and faced an unexpected surge in demand for new houses and home renovations. The inability to provide enough lumber has increased the average price of a new single family home by more than $35,000, the National Association of Homebuilders said Wednesday.
Back in April 2020, builders paid $16,927 for the lumber and manufactured lumber products used to build a single-family home. Now that cost is $48,136. Add in interest and fees and NAHB calculates that the lumber price hike has added $35,872 to the cost of building a house in the past year. In a recent NAHB survey, 47% of single-family builders surveyed said they were including price escalation clauses in their sales contracts.
Read the full article at The Colorado Sun.
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Real estate transactions totaled $38.2 million across 45 sales for week of April 29 to May 5.