Why the Price of Lumber Is Skyrocketing
With chaos ensuing within the financial sector in 2021 and moving into 2022, one item that otherwise dodges inflation and market fluctuations now costs an arm and a leg to purchase, lumber. Whether you're a contractor, a real-estate investor, a builder, or someone making renovations on your home, the price to complete the project is staggering. If you've found yourself scratching your head at the register while watching your bank account dwindle before your eyes, here's what you need to know about the skyrocketing cost of lumber.
How the Coronavirus and the Global Pandemic Inflated An Archaic Industry
Simply put, the pandemic tore apart the lumber industry and pushed the cost of goods through the roof. The reason for this is twofold: supply and demand. Rather than focusing on the last few years, we need to rewind to the early 2000s, when lumber prices began to shift in rapid succession.
Prior to the housing market crash of 2008, housing projects and large-scale real-estate transactions were all the rage. You couldn't turn down a block in a neighborhood without scouting a "For Sale" sign or seeing a new development underway. With these behaviors, we began to see rapid fluctuations within the lumber market unlike any time in history.
Fast forward to today, and we see newfound cash flow from workers heading back to the workplace and individuals spending their stimulus cash on much-needed home upgrades. If 2008 taught us anything, it's to pay attention to moments in the market when citizens begin overleveraging their financial nest eggs to fund secondary purchases. These individuals are flush with cash, and they're wandering out of the pandemic mandates with fog in their eyes, ready and willing to spend their money on home-related products and services.
Although we see this upward progression in the housing market, the lumber industry is still suffering from stay-at-home mandates and cautious regulations requiring employees to stay home if they experience COVID-like symptoms. With no one in place to process and move lumber throughout the country, we see a halt in production efficiency. In simple terms, this is a supply and demand problem in its purest form.
Experts believe the price of lumber will continue its increase into the fourth quarter of 2022, and if post-COVID mandates don't ease their stranglehold on the U.S. economy, 2023 casts a bleak forecast for our future. However, there are still quality lumber manufacturers and businesses that understand the plight of the average citizen.
Rather than raking individuals over the coals to turn a quick buck, they work with homeowners and real-estate magnates to turn their house into a home. Whether it's a small project or a large vision, there are still reputable companies ready and willing to get to work!
Armor Fence has maintained a steady supply of wood throughout this crisis and is always ready to help serve you and your family.