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

To: Elroy Jetson who wrote (59757)	8/12/2006 10:33:05 AM
From: Don Earl	Read Replies (2) \| Respond to of 306849

RE: "Large builders are alreay paying 37% less for lumber than two years ago. Some petroleum based products are slightly higher, while the discounted price of many fixtures have plummeted." You don't know what you're talking about. Two years ago, plywood was up over 200% from two years before that, dimensional lumber had gone up by almost as much, and OSB was up close to 400%. With the dispute on Canadian softwoods nearing an end, that's starting to ease off. Duh. If you bother to look, you'll find disclosures in the filings of all of the publicly held large builders on the massive increases in materials prices since 2003. And, what fixtures, pray tell, have "plummeted"? Windows, lights, toilets and manufactured siding have remained mostly flat over the past 5 years, but that's about it. Anything made of steel is still up on the illegal tariffs slapped on imports 5 years ago, and, as you point out, the cost of oil and energy is taking its toll. As amazing as it may seem, the cost of lumber is only about 20% of the cost of building a house. Watch the next project you see going up. A good crew will have an average size house framed and sheeted in a few weeks, that uses up the bulk of the lumber that goes into a house. From there you'll be driving by the house for months wondering what's taking so long. If you bother to think about it for 10 seconds, you already know houses are made out of a lot more than lumber. The cost of lumber makes a difference in what it costs to build a house, especially when it goes up as much as it did, as fast as it did in 2003, but that's still only part of the story. My last post on a topic that's been beat to death. You can't teach a pig to sing. It wastes your time and annoys the pig.