Pandemic-spurred lumber shortage causing construction prices to spike in the Brazos Valley
BRYAN, Texas (KBTX) - The cost of new construction and even some remodeling and renovation projects have spiked in the Brazos Valley due to a lumber shortage caused in large part by the pandemic.
That lumber shortage, which is having nationwide effects, is causing construction prices to rise at steep rates. The issue is being compounded by steadily high demand from consumers that are contributing to those higher prices and delaying the start of new projects, big and small, for months.
“It’s a classic supply and demand model occurring,” Texas A&M Construction Science Professor Randy Birdwell said. “A year ago, lumber was about $400 a thousand board feet. A few days ago, it hit over $1,600, almost $1,700 per board foot.”
Birdwell, who is also a fellow at the school’s Center for Housing & Urban Development, says the demand for projects has only climbed, skyrocketed even, throughout the pandemic, while sawmills were forced to shut down for a period and have since struggled to create a surplus.
“The housing industry was doing extremely well in the first quarter before we went into the lockdown mode of the pandemic,” Birdwell said. “Housing took a little dip, but then continued strong, in addition to the homeowners flooding the Home Depots of the world with demands for lumber as well.”
The surge in price is as much the result of a short supply chain as it is of growth in demand, Birdwell says.
“Some of it is based upon the fact that people realized, in the pandemic world, their home did not fit their needs,” Birdwell said.
Chris Aversa is the owner of Aggieland Contracting. He says he’s seen the same issues and trends unfold over the past 14 months that Birdwell describes.
“A 2,000 square-foot house would cost you a year, year and a half ago $20,000 to $28,000 for lumber,” Aversa said. “Today, that’s going to be around $40,000 for lumber.”
“According to the National Association of Homebuilders, the average cost of a new home has gone up to $36,000,” Birdwell said.
Aversa says his company has seen a slight slowdown on the new construction side but that has been filled by more requests for renovation and addition projects. He says the sharp increase in lumber prices isn’t just affecting the cost of those new construction projects, though.
“A secondary impact would be that existing home values are going to rise as a result because the replacement cost to build a new home is going to be far greater than it was a year, year and a half ago,” Aversa said. “As a result, existing homes will appreciate.”
“Builders must educate realtors and the appraisers about the costs so the appraisal can affect these changing costs,” Birdwell said.
Aversa and Birdwell agree there isn’t much builders or consumers can do to improve the situation other than simply wait it out. Birdwell also expects the demand to remain high locally.
“I think we’re looking at another year, and I think lumber will creep up into the $2,000 mark,” Birdwell said.
But it’s not just lumber. Aversa says pandemic-spurred shortages are having an industry-wide effect.
“We’re seeing sharp increases in pricing in a lot of things, such as metal, rebar, and concrete,” Aversa said. “Concrete hasn’t seen a sharp increase in price, however, it’s been harder to get and become more scarce because the raw materials necessary to produce it are becoming hard to get.”
“I think it’s is a big lesson in how you evaluate the costs from not only a health point of view, but also the cost for the economy of a pandemic,” Birdwell said.
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