Went to Home Depot today for a few pieces of lumber. Fainted, then had to take out a home loan.

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Oro_O

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I knew prices were outlandish now, but really.

3 pieces of 2 x 4 x 8'
2 pieces of 2 x 8 x 8'
1 sheet of 3/4" plywood/OSB.

$225.

18 months ago that would have been maybe $70. Even the checkout-guy looked at the scanned price of the OSB and said, "Can this be correct?"

Had to have it for critical repairs, but OMG. Had some other household projects to do, improvements, but they are cancelled.

This stuff is grown and finished within eyesight of here, final finish a few miles away in Tacoma, WA. I cannot imagine what it costs where trucked. The other weird thing is, the shelves were not scarce, for anything. In fact, pretty much over-flowing with supply. Not just lumber, but plumbing, paint, etc. You can't tell me "demand is outstripping supply." It's something else.

Hello inflation, hello economic contraction, hello foreign investment reverse-flows. I'm shorting everything.

I'm going to (very reluctantly, as I don't believe in the "I know this because blah-blah-blah school of scolding) add the following credentials to this little anecdote. I have a minor in economics from Harvard, used to work on Wall Street as an institutional broker. Later elsewhere as a hedge fund trader. I've seen this cyclical song so many times, it's not funny. We are so far down the road now there is no turning around.
 
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You know stores are just in time type places. Prices of lumber is actually down, takes a while for those prices to trickle down as they sell their existing stock. According to a few other articles, they expect prices to go back down but probably not as low as they were before. Additional supply is coming online but not enough to start up some old lumber mills that were shut down because they weren't as efficient as new ones.

markets.businessinsider.com

Lumber prices sink below $1,000 for the first time since March, now down 40% since May's record high

Lumber prices are now down roughly 40% from their May 7 peak, but are still up over 175% over the past year.
markets.businessinsider.com markets.businessinsider.com
 
A SPF ( spruce pine or fir) 2x4, 8 feet long is $10.58 ( $8.70 US) right in the middle of a bunch of lumber mills up here. Also regarding house wiring, I saw this note at Home Depot.

31545779-0762-4F1C-AF0A-41DF4CAFCE33.jpeg
 
Snagglefoot said:
A SPF ( spruce pine or fir) 2x4, 8 feet long is $10.58 ( $8.70 US) right in the middle of a bunch of lumber mills up here. Also regarding house wiring, I saw this note at Home Depot.
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I think that is almost to the penny what we (my Dad TBH) paid. $8.71 for the 2 x 4, like $26 for the 2 x 8, then about $100 (after tax) for the 4 x 8 sheet of plywood. We had to have it though for some summer time repair to prior water damage.

I can't believe how this is just not killing purchases/new construction/remodeling. This kills economies, it's all spiraling downward now. I appreciate it may turn in a few months, but economies work on psychology, too. People freak and they change behavior, and it's a long time to regain trust. I've seen this in economies from Korea, to Indonesia, to the US, and back and forth. I really think the only think holding up the US equity markets now are a) youth, b) irrational exuberance, c) foreign money. Foreign money is about to flee and then the prop of the other two legs are gone.

BTDT.
 
ripcord said:
I saw that the Feds are slapping Canadian lumber imports with an additional 10% tariff (up to ~20%). Perfect timing.

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Oh that's smart (not). Had not heard this bit of insanity.

I do know, a few years ago, there were some concerns about this. I've lived since 2000 within a few hour drive of the Canadian border, both on the east coast and west. I know the issue is never black/white or simple. But NOW is not the time to drive that. Insane.
 
Stop buying it. Take a pause on all forms of construction IF you can, If you keep buying it at double the prices they will just keep selling it priced there.We need to make a glut of lumber very fast. That means stop buying it. That means that project you wanted to do, take a break on it for a year or two.
 
Oro_O said:
I knew prices were outlandish now, but really.

3 pieces of 2 x 4 x 8'
2 pieces of 2 x 8 x 8'
1 sheet of 3/4" plywood/OSB.

$225.
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Measure twice and cut once has a 'new' meaning.

If you want to mess with a newbi in the lumber dept, ask them if they have any 6 inch wide 2x4's

Lumber Fun Fact:
Why does plywood have a repeating pattern of knot holes ?
Because the plys are cut while the log is rotating (like unraveling a roll of paper towels)
The same knot pattern will keep appearing.
* Measure from (same) knot to knot and you can tell what diameter the log was.
 
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Unless new lumber is needed to keep my house from falling down, I am putting off my lumber purchases. The prices will eventually go down and they actually have gone down some already. I recently seen 2x4x8's white pine priced under seven dollars.
 
I have been putting off projects and shaving down what I have to make it work. But a sheet of 23/32 is $78 locally - a year ago it was $30!! But it won't go back down ever. People are building and upgrading by whatever means. As long as people continue to pay these insane prices, it's going to keep up there.


Lubener said:
Unless new lumber is needed to keep my house from falling down, I am putting off my lumber purchases. The prices will eventually go down and they actually have gone down some already. I recently seen 2x4x8's white pine priced under seven dollars.
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I was hoping to fix my garage this summer. It's not happening. I have been saying if I don't fix my garage this summer , I'm not going to have a garage next year. at the current prices, I'll just let it fall down and do an insurance claim for a new one.
 
Oro_O said:
I can't believe how this is just not killing purchases/new construction/remodeling. This kills economies, it's all spiraling downward now. I appreciate it may turn in a few months, but economies work on psychology, too. People freak and they change behavior, and it's a long time to regain trust. I've seen this in economies from Korea, to Indonesia, to the US, and back and forth. I really think the only think holding up the US equity markets now are a) youth, b) irrational exuberance, c) foreign money. Foreign money is about to flee and then the prop of the other two legs are gone.
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The economy is not spiraling downward. Its doing quite well.
People are still building. People are buying cars if they find them. There's lots of jobs available, and unemployment is trending down. S&P500 hovering around all-time highs.
People are vacationing like crazy. American savings is at an all time high which translates to huge pent up demand.
Businesses that retained employees through pandemic are killing it.
Businesses that didn't will take some time, but they are rushing to because the demand is there in all aspects of the economy.

So, good luck shorting the US economy. That's literally the dumbest thing you could do with your money.
 
simple_gifts said:
It is a host of pressures, not one cause like some would like you to believe.
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Hmm. 80-90% the mills, at least here in the PNW. Our main (from our house to local town) road here actually has a mill - conveyor over the road, occupies both sides. They have logs for months, if not years. They are sawing as fast as they can. Seems like I see a LOT of 6X and 8X at the place, not a lot of 2x.

Point is: Lots of cut trees and the mills cannot hire enough people. This is not something I've see often in my 40 years in the area with depressed mill town, one after the next.

10-20% transportation
 
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We drive through Morton on occasion and the mill there has lumber stacked up like no tomorrow. Wonder how much that is worth?

Anyone here who didn’t live through the 70’s had better read up on that period.
 
PimTac said:
Anyone here who didn’t live through the 70’s had better read up on that period.
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Different situation though. US just came off the gold standard, end of Vietnam War, China entering world market, Oil embargo x2, OPEC, Cold War heating up, collapse of Savings and Loans, and the list goes on and on.

Inflation is always around, just at different levels based on circumstances way beyond our control. The Federal Reserve isn't worried, and those guys have taken way more economics courses than I have (and I have taken a few) - therefore small scale "studies" are probably not accurate.

I remember a friend was involved in a boating accident and received an insurance settlement. He put that in a CD for future use - at the time that CD was earning over 17% annually. I personally bought a car on a 90 day revolving loan because my banker said the rates were so volatile they couldn't lend money any other way - worked out great for me though!

Having said all that, I agree that is very important to study up on history because those who do not, are doomed to make the same mistakes. So study up, compare situations, and make your decisions accordingly.

I bought my first house in the mid 80's and I had stellar credit - interest rate was 12.5%. Refinanced 1 year later at 9.5% Another year later down to 8.0%. Just gotta roll with it and refi as soon as possible to capitalize on the lower rates.

It's all about cycles, up and down. Buy stocks when low, sell high. Buy houses when low, sell high. repeat and make money!
 
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97K15004WD said:
Different situation though. US just came off the gold standard, end of Vietnam War, China entering world market, Oil embargo x2, OPEC, Cold War heating up, collapse of Savings and Loans, and the list goes on and on.

Inflation is always around, just at different levels based on circumstances way beyond our control. The Federal Reserve isn't worried, and those guys have taken way more economics courses than I have (and I have taken a few) - therefore small scale "studies" are probably not accurate.

I remember a friend was involved in a boating accident and received an insurance settlement. He put that in a CD for future use - at the time that CD was earning over 17% annually. I personally bought a car on a 90 day revolving loan because my banker said the rates were so volatile they couldn't lend money any other way - worked out great for me though!

Having said all that, I agree that is very important to study up on history because those who do not, are doomed to make the same mistakes. So study up, compare situations, and make your decisions accordingly.

I bought my first house in the mid 80's and I had stellar credit - interest rate was 12.5%. Refinanced 1 year later at 9.5% Another year later down to 8.0%. Just gotta roll with it and refi as soon as possible to capitalize on the lower rates.

It's all about cycles, up and down. Buy stocks when low, sell high. Buy houses when low, sell high. repeat and make money!
Click to expand...

Wow! 12.5% interest?
 
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