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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Tradelite who wrote (59705)	8/11/2006 12:20:51 AM
From: Live2Sail	Read Replies (1) \| Respond to of 306849

I totally agree that input prices have been increasing, but why can't a finished good be sold for less than it cost to make? It's called liquidation. It can happen in bad times when a company is under the gun. Not saying that the homies will have to do it, but it's not out of the realm of possibility.

To: Tradelite who wrote (59705)	8/11/2006 8:19:53 AM
From: Think4Yourself	Read Replies (2) \| Respond to of 306849

Had to buy some sheathing last night. Normally use 5/8 T1-11 but the price had gone up nearly 50% since two years ago when I last bought it. Very expensive! Decided to look at plywood vs OSB. Used to be that they were similar in price, making plywood the clear winner. No more. The plywood was almost twice the price of the OSB. Makes sense since OSB is essentially made from waste products and glue. I expect prices to come back down somewhat as the building continues to wind down and the market becomes oversupplied with building products. There will be a glut of products on the market in 12 months.

To: Tradelite who wrote (59705)	8/11/2006 11:35:38 AM
From: Don Earl	Read Replies (1) \| Respond to of 306849

RE: "I have personally been in the market in recent months for such simple items as cans of paint (prices for which have gone up a couple times in the last 90 days) and carpet and carpet padding. Foam padding has gone thru the roof in price and has been hard to keep in stock, according to a local carpet dealer. Petroleum costs are a primary culprit... Anyone who thinks prices of lumber, copper pipes, roofing shingles, aluminum windows, concrete or asphalt driveways and drywall are going to drop and make houses less expensive in the future might well be dreaming." Yeah, it's pretty much everything straight across the board. Carpet price increases has a lot to do with oil, but there's also a lot less competition in the market. Mohawk has chewed up most of their previous competition through mergers, and the end result is monopoly pricing, although I doubt most people realize nearly everything in the showroom is coming from a single company. Mohawk also now owns most of the name brand ceramic tile on the market, and not only has the price gone way up, the quality has gone way down. Flaws you wouldn't see at the lowest entry level price point 10 years ago are unavoidable on the top end stuff now. Most of the increases have taken place in the last 3 years since the invasion of Iraq, and the increases in home prices over the same period can largely be tied directly to materials prices. RE: "Just paid a guy more than $5K to tear down and rebuild a brick retaining wall. Wonder how much gas it took to haul the load of new brick and haul away the old ones." I doubt gas is much of an issue on that one, but the labor market is tight in a lot of areas. What you end up with is outfits have more work than they can handle, so they tend to over bid jobs they don't really want. The philosophy seems to be they don't want the job, but will squeeze it in it if it's so profitable they can't afford to turn it down. Builders tend to run up the price on that count as when they need something done, they need it now. Your subcontractors end up tied to a builder who supplies them with steady work, so they're not very motivated to take on short term projects from private homeowners. Prices on a lot of items have softened from their peak, which also seems to be showing up in a leveling off of home prices, but like you I don't see any huge reversal to prices of a few years ago. The usual situation is a consolidation period where things kind of flutter around near the top, then flatten out in that area for an extended period of time.