I've had to have conversations with my biggest contractors, telling them that I couldn't give them the 30 day terms any more. My pockets just aren't deep enough. They all understand and we settled on 14 days. We have a lot of DIY large project jobs and in the past we have held quotes for 14 days. In Oct, 2020 we went to 7 days. Last month we went to end of business day on materials quotes.
Surprisingly, we have been slammed. Unfortunately people are pre-paying for jobs that are weeks out, hedging that the prices aren't going to stop going up. My guys pull the materials, wrap them and store them. I am really worried that once those packages roll out, the world is going to come to a screeching stop.
Kind of related - the last couple of weeks I've noticed numerous loooong trains - locomotives at both ends and one one or two in the middle - rolling through town and blocking streets for much longer than normal. Most of them are all container - still get other trains through with mixed container, boxcar, grain and chemical cars - but the longer ones are all container.
I’ve bout two decks and an outdoor bar in the last 6 months or so. At least in my area, PT lumber doesn’t seem to have been affected as much.
Also, having built said two decks, I won’t surface a deck with natural wood ever again. I’d do composite every time, even at 2x the cost. There are some amazingly natural looking composites available now, and the labor savings in dealing with and engineered material vs natural are huge. Even though my labor was “free” it’s really not as my free time is my most valuable commodity. I would gladly pay more for a material that gave me back some of that time.
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While we’ve mostly been taking about wood, and smaller scale residential level projects, the larger commercial and multi family sectors are feeling it too. We just had a steel subcontractor tell us that the metal roof joists for a warehouse we’re bidding have a 12 month lead time. A year. If we started construction tomorrow we KD stand the tilt walls and then wait 8-10 months to get the joists.
The cool thing is that this is forcing people to look at alternative building materials and methods. There are a lot of very innovative products out there that previously haven’t gotten any traction due to (a) higher initial costs (b) fear of the new and (c) people making enough money on the old ways to have no interest in the new. Total lack of availability of their traditional building material has them looking hard at alternatives. That warehouse, for example, may wind up with some sort of composite or even hollow core concrete (not new, but making a comeback) roof.
Beyond materials is labor. We’re getting reports from almost all sectors that people would rather stay home and collect their government checks than go to work. We had a job ask for ten laborers for cleanup and they got 4 guys at a tradesman rate.
Combine the labor issues AND the material issues, and the industry is even further primed to look at other innovations such as offsite construction (Prefab, modular, etc.).
If I was building a one-off home on a private parcel needed it soonish and didn’t want to wait and ride this out and the local contractors were telling me their tails of woe, I’d be down at the local mobile home seller asking about modular options. The Prefab home sector has a lot more to offer than what most people realize. And the more folks do that the more that industry will continue to innovate.
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I'm sure there's a number of contributing factors to the price increases, but some people are starting to question whether the explosive increase in construction costs is the first sign of hyper-inflation, caused by massive helicopter spending.
The other thread on rental car costs is also relevant to this conversation.
I'm not supporting the hyper-inflation theory, but I'm keeping an open mind.
Was speaking with a local yesterday, and they said the mill a little north of @Borderland has more raw logs, in-process, and finished, wrapped lumber ready to ship than they've ever seen on location since it opened. Wondering whether it's a transportation shortage or what.
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Not another dime.
I'm not sure prices will ever come down.
With my state (FL) voting to move to $15 minimum wage in the next few years, a price increase is expected anyway. But now the folks selling lumber can see that people really need it, and that demand will support plywood at an enourmous markup. Does anyone really think prices will come down when availability comes back? Those companies can pocket the extra profit and leave pricing where it is.
I honestly don't see a way out of this rabbit hole. And it isn't just construction material.