Volatile lumber prices pose challenges for local builders, consumers

Volatile lumber prices pose challenges for local builders, consumers

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Soaring lumber prices and long delays in shipping materials are disrupting construction and renovation projects.

Mark Benson, owner of Bencar Building Systems in Wallingford, said the volatility has led to higher prices and longer waits for customers.

Benson said it used to take an average of two to three weeks to receive all materials for a job. That lead time has now jumped to 6 to 12 weeks and the price of materials has increased.

Wood has become so expensive that he’s saving every extra piece for reuse.

“Now you don’t even throw scraps away anymore,” he said.

He tried temporarily switching to steel as the price of wood eclipsed metal products, however, the added demand caused steel prices to go up.

The cause appears to be related to workers at timber producers and logistics companies having to quarantine. High demand is also a factor.

“People are staying home, they don’t like their houses,” Benson said.

Once the pandemic has passed, Benson hopes that the material lead times will return to where they were before the pandemic. He’s not so sure about prices.

“Once they go up it's very hard for them to come down,” he said.

According to the Producer Price Index compiled by the federal Bureau of Labor Statistics, the cost of lumber has increased by 57.8 percent since February 2020.

Prior to the pandemic, prices had been fairly stable since 2014, rarely increasing or decreasing more than 3.7 percent from month to month. As states imposed lockdown restrictions and workers started getting sick, lumber prices plummeted 7.8 percent in April 2020. From there, prices have risen an average of 5.8 percent a month through the rest of the pandemic.

Doug Emmerthal, a supervisor with the state Department of Energy and Environmental Protection’s Forestry Division, said the timber industry may be having difficulty meeting demand due to the logistics of storing and transporting wood.

Once lumber is harvested, it becomes a perishable commodity, which is difficult to transport and store. If timber producers flood the market to meet demand and price fluctuations swing in the negative direction, it could leave a large amount of lumber taking up space in warehouses.

“There's quite a bit of guesswork in this,” he said.

Joseph LaRosa, vice president of LaRosa Construction in Meriden, said the rising cost of building materials can be seen in the final price tag for newly constructed homes, however, he hopes that low interest rates for mortgages will continue to buoy a strong housing market.

“At the end of the day, I think people are paying more, but they’re getting great interest rates,” he said.

Though long delays in receiving supplies impacted construction that had started before the pandemic, he said builders quickly adapted by switching to work that didn’t require those materials while they waited. Noting that there’s always something to do around a construction site, he said if he’s waiting for wood, he’ll work on paving or plumbing in the meantime.

“There’s always some sort of blocks in our industry ... we have to adapt and if we can't adapt, we don't survive,” he said.

The real estate market has been strong enough that LaRosa’s firm purchased a nearly eight-acre parcel of land near Williams and Genest streets in Meriden last September to develop a 13-lot subdivision.

“It gives us some work, so that’s another way we adapted,” LaRosa said.

dleithyessian@record-journal.com203-317-2317Twitter: @leith_yessian

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