It’s no secret that Seattle is an expensive place to buy a home. It ranks as the ninth most expensive city in the country, right on the heels of places like San Francisco and Manhattan. After the onset of the pandemic, building new homes was made more expensive by one particular factor: skyrocketing lumber costs.
As of this summer, lumber prices are dipping back down towards their pre-pandemic levels. After over a year of wild fluctuation, now feels like a good time to ask, what exactly happened?
Here’s our breakdown on the lumber fiasco of the last year and a half.
The Perfect Storm
When the world was hit with the COVID-19 pandemic, two things happened in the world of lumber in the United States. First, the desire for new and conveniently built homes went up.
And second, lumber mills experienced long closures.
This led to a stark contrast in the country’s demand for lumber and the ability to provide it. As a direct result, the price of lumber went up astronomically in 2021. According to the National Association of Home Builders, this led to an increase in the cost of building a single-family home by an average of $36,000.
The price of lumber peaked on May 7, 2021, topping out at $1,670.50 per thousand board feet. For contrast, in July of 2020 that number was less than $500.
The Worst Month For Lumber Since the 70s
June of this year was actually the worst month for lumber since 1978. The average price crashed by a whopping 40% and it may continue to fall. But remember, for us this means that prices are getting closer to what we are used to. Still, lumber is still more expensive than it was before the beginning of the pandemic. As mills open back up and equilibrium is restored to supply and demand, it may become more affordable to build a house in the Seattle area.
What Now?
Hopefully, prices of lumber will regain a sense of normalcy. But we think it’s important to keep an eye on lumber prices over the next several months. The COVID-19 Delta variant is cause for concern, and already we are seeing mask mandates/recommendations and other precautions being reinstated. On top of that, widespread wildfires in the west may also drive lumber prices back up. We don’t know what autumn will look like, and lumber mills may struggle again.
Were you thinking of building a house, but didn’t because of shocking lumber prices? Check in with our team to talk about new homes that are available in the area.