Covid, wild fires , hurricanes and low interest rates on homes. Everyone needs wood so they raise the market. People are still paying it
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Originally posted by texasdeerhunter View PostIt’s a combination of things. Long term interest rates are at historic lows (and have been low for a while). Which means that people can afford to build bigger houses, thus elevating the demand side. Then you have large corporations controlling the supply side, and they are setting the market price to take advantage of the demand side. And the consumer is caught in the middle taking it up the shorts.
Walk into any lumber yard, and their lumber prices are 30-50% higher than they were a year ago. Then, go find 20-50 landowners and ask them how much they are getting for their timber (saw logs). I guarantee you that you won’t find a raw timber supplier getting 20% more for his trees this year than he was last year. So a reasonable conclusion is that the saw mills and OSB/particle board plants are controlling the price and market. GP is basically a monopoly (in the south at least)
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U.S. housing starts, building permits accelerate
U.S. homebuilding and permits surged in December as historically low mortgage rates supported the housing market, but momentum could slow amid surging lumber prices and a shortage of labor.
Housing starts jumped 5.8% to a seasonally adjusted annual rate of 1.669 million units last month, the Commerce Department said on Thursday. Economists polled by Reuters had forecast starts would rise to a rate of 1.560 million units in December. Homebuilding increased 5.2% on a year-on-year basis. Starts totaled 1.380 million in 2020, up 7.0% from 2019.
Permits for future homebuilding accelerated 4.5% to a rate of 1.709 million units in December. Permits, which typically lead starts by one to two months, totaled 1.452 million last year, a 4.8% increase from 2019.
Single-family homebuilding, the largest share of the housing market, soared 12.0% to a seasonally adjusted annual rate of 1.338 million units. Single-family starts have increased for eight straight months.
https://www.cnbc.com/2021/01/21/hous...mber-2020.html
What’s happening to Lumber Prices?
The boom in the building/remodeling industries turned the tables on the lumber industry. Mills and other processing facilities went from having an excess supply of wood to a shortfall in what seemed like a moment’s notice.
Ultimately, as the demand for lumber continued to increase over the past few months, supply has not been able to catch up, resulting in an increase in lumber’s cost by 340% or more in particular locations.
https://www.trinitybuildingsystems.c...umber-so-high/
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Originally posted by texasdeerhunter View PostIt’s a combination of things. Long term interest rates are at historic lows (and have been low for a while). Which means that people can afford to build bigger houses, thus elevating the demand side. Then you have large corporations controlling the supply side, and they are setting the market price to take advantage of the demand side. And the consumer is caught in the middle taking it up the shorts.
Walk into any lumber yard, and their lumber prices are 30-50% higher than they were a year ago. Then, go find 20-50 landowners and ask them how much they are getting for their timber (saw logs). I guarantee you that you won’t find a raw timber supplier getting 20% more for his trees this year than he was last year. So a reasonable conclusion is that the saw mills and OSB/particle board plants are controlling the price and market. GP is basically a monopoly (in the south at least)
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Originally posted by Bayouboy View PostBeing on an East Tx timber lease right now is like playing Russian roulette.
I can say, this isn't being caused by the timberland owners. High prices are being driven by the mills and all the middleman handlers. Im sure it has alittle to do with covid issues at the mills,, but I also think they are running at nearly full tilt and still can't keep up with demand thus driving prices up.
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