Why the cost increase?

I’m in the residential design/build business. Lumber prices began skyrocketing a few month ago. Supposedly beginning to come down based on the futures market. But no, this has little to do with inflation in it’s pure form.

There are a lot/many of reasons for it, but I don’t talk to anyone who understands the primary reason why. That includes my lumber yard salesman who purchase wholesale. When a 2x4 goes from $2 to $10 ‘over night’ that is more than actual inflation, or QE. Personally, I think with the housing/remodeling boom, and the availability of cheap money, the wholesale folks got greedy. We have been incredibly busy over the last 9 months, and lumber costs haven’t stopped anyone from starting or following through on a project. So, why lower costs? Supply and demand allows it. When rates go back up, and they will, prices will drop. But right now, it isn’t stopping anyone as money is cheap, and some are taking full advantage.

I understand this, MY money doesn’t buy 1/2 what it did 18-24 months ago.. I understand you can’t just print money. I understand this government, no matter WHO is in office, continues to NOT pay the bills of the people sense Richard Nixon. I know the last balanced budget was proposed by Jimmy Carter.

I know the last time we had a FAKE surplus was when Clinton was in office. We went from an 11 trillion dollar FAKE surplus to what ever we are now.. STUPID STUPID STUPID in debt..

I barely trust Ran or Ron Paul. The ONLY ones close to my way of thinkin..

The only thing that didn’t go up was my house payment. It will be paid for in short order 6-8 month. And a rental or two. I kept the rents the same for 10 years. Same renters for the last 15 years.

My income is the same. I hate to pass it on to my renters.. Ones a car mechanic. I know he hasn’t seen a raise sense forever..

That’s what I know.. Thanks for the info, I’ll give it a good looking over.. BUT I see Greenspan. He was WAY off the mark.. From what I remember and still is. Da#n Idiot!!

A budget means you spend what you have

An Economy is dependent on what should come in, BUT greed always make people over spend what hasn't even been collected.

I say JAIL the Economist and anyone who doesn't support paying bills out of coffers, not projection.. That is the only problem I see.. No one we hire is held accountable, just like the last year of burning down 220 towns, looting towns.. NO one was held accountable. ZERO.. STILL going into stores and just having at it.. Looting is a punished on the site. It is one of a few capital offenses that can be carried out by any property owner. OR Law enforcement..

Jeez.. I’m just a common man. Making me think like this.. LOL

Regards

We had some construction done that was contracted prior to the big rise on lumber costs. Good timing! Contractor attributed the subsequant rise in lumber costs to high demand for home improvements due to the pandemic. He is very backlogged. Not enough workers that can do the work properly to keep up. It’s basic supply and demand magnified by a pandemic that keeps people at home.

Has anyone checked the price of gasoline, or meat, or eaten out at a restaurant lately? 

@oregonpapa

Of course we have. Listen, I’m no fan of the Fed, or our insane and crazy spending on a federal level (yes, if we keep doing that we will see similar cost increases on all products across the board), but, the lumber increase across the board happened almost literally ’overnight’. The beef industry wholesalers, as the lumber guys, seem to have a cartel on these prices, and can literally do as they desire if the market is there. Gas prices? Well, I don’t think it takes a genius to figure out why that is happening.


I study this stuff, believe me, especially after the housing crash that almost ‘killed me’ financially overnight, but this particular cost increase was so staggering quick nationwide that it goes beyond what would be expected by ‘actual’ inflation.

As example, we just ordered roof trusses for a job. We will have to wait 3 months to get them, minimum. It wasn’t even a year ago would would get those built and trucked to our site in 2-3 weeks max from date of order. Might give you a glimpse of what is happening. Same is happening to windows, cabinets, and many many other building supplies. Makes our job tough in keeping clients happy.