The Home Depot – Pandemic lockdown caused do-it-yourself boom making lumber prices skyrocket
FOX 2 – Vito Pampalona Jr. has been a builder since 2000, before that, he grew up in his family business building homes and commercial and office space in northern Oakland County.
He says the price of lumber is going way up.
“They are getting lumber invoices that are coming in anywhere from maybe $20,000 to upwards of $35,000 over the original budget,” he said. “And that is a direct reflection of the lumber futures.”
The lumber futures are through the roof all because of demand. The demand for the building blocks of new homes are the highest since 2006.
So people building customs homes are sitting down with their builders and hearing this: lumber prices are exorbitantly high.
“Right now the National Association of Homebuilders say it’s up 170%, 170% is very high,” he said.
So managing expectations and telling a homeowner they’ll have to shell out significantly more for something they can’t even see-is a tough sell.
“You cannot see it, you cannot touch it, it is not an upgrade, it’s not something that you see every day while you’re living in your home,” Pampalona said. “It is hard for a customer to look at that and understand that. You upgrade your cabinets, they know, these are great cabinets these are nice cabinets, we’re willing to pay for it.”
Part of the reason for the scarcity of lumber is because of what people thought would happen as soon as the pandemic hit. Economists thought interest in new homes would fall. Just the opposite happened.
“It made people realize that they are now loving their homes,” he said. “They’re not doing improvements are their homes, the lockdown caused a huge do-it-yourself movement,” he said.”If you look at the numbers at Home Depot, they were up 30% month after month through the shutdown. So that in itself, there are big purchasers of soft lumber and then the builders, during the shut down of the builders were still taking on new customers, still making sales.”
So now builders are sitting down with many first home builders who are on tight budgets and telling them they don’t know what lumber will cost when it comes to me for their home to be built.
“You say look, we will budget for a $30,000 lumber package, I could go to 45,000 but it could be at 55,000, they just don’t understand so that conversation actually takes time,” he said. “And it’s very beneficial for a builder to put that contingency in there.”