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"Wood" you like a new home?

Email from a builder in the local market....

"Urgent Market information!

If your buyers are not aware of what is happening nationwide with lumber prices, please share the links below.

Prices increased today from $5,000-$10,000 depending on the community. We will continue to see price increases. If your buyers are in the market, it’s imperative that they make decisions quickly. This is not a sales pitch or a marketing ploy. This is a nationwide issue. It’s important that we educate our buyers on what is happening."

As a Realtor I am seeing a big jump in new home prices. This appears to be due to a few national factors, lack of housing options (tight market) and rising lumber prices, covid reducing production and tariffs that were in place on Canadian lumber until December 2020 when tariffs went from 20% to 9%.

So lets start with the tight housing market, new construction and resales. We are seeing that 2020 fell short of 2019 in homes sold by almost half. We can credit high demand with a low supply driving the lack of sales. I can personally attest to having a number of buyers that are having great difficulty finding a home to buy.

Next let's look at the lumber prices. If you have shopped for lumber lately you can attest to sky rocketing prices. I included a in-depth video (11+ min) and a chart that shows the board foot prices for 2020--we started a little over $400 to the $905 market price (Sticker Shock). Covid has reduced production but I would still hang my hat on the massive demand for lumber to be used for construction.

So you want to buy a new home.

1. The sooner you purchase the better.

2. Be ready for more price hikes.

3. Don't expect new home inventory to increase for a while

4. Look for builders to reduce amenity choices (lack of availably)

5. Expect builders to stick to their guns on their price or take multiple offers on homes that are to be built. (Bidding wars)

I added the chart to give some prospective. We are seeing an amazing spike in prices of lumber which is translating into much higher new home prices. I received an email from one of my builders notating the real issue with the rise in lumber prices.



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