This summer, Steve Rendine watched boards of pressure-treated decking in his Smithfield lumber yard disappear like the most recognizable symbol of COVID-19 scarcity.
“It’s similar to what happened with toilet paper, except the process to make toilet paper is much easier than lumber,” Rendine, the general manager at Douglas Lumber, said. “There’s panic buying. Stuff gets snapped up at prices that, realistically, three months from now will be astronomically expensive.”
Like the toilet paper shortage that perplexed Americans in the first two months of the COVID-19 pandemic, the more recent lumber shortage caught many by surprise and has been difficult to remedy.
On Friday, lumber futures hit yet another record high, more than double the price at the start of the year, but locally many people would be willing to pay more if they could find product to buy.
“What we are seeing is historic in a number of ways, from pricing to availability,” Rendine said.
Builders like Tim Stasiunas, of Stasiunas Construction in Charlestown, Rhode Island, are sending trucks out of state in search of building materials, understanding that he’ll be paying more than usual for what they find.
“For me, it is causing a lot of headaches,” Stasiunas said Friday. “We have an exposure of thousands of dollars of loss per house we are building, because we are locked into contracts signed six and seven months ago.”
So what happened to all the wood?
Rendine calls it a “perfect storm” of problems that started with President Donald Trump’s 20% tariff on Canadian softwood lumber, which raised prices on a source New England relied on.
Then when COVID-19 landed on American shores, mills and building materials producers — like counterparts in many industries — ratcheted operations down as the economy went into hibernation.
But unlike in other markets, Americans never pulled back on real estate or home improvement spending. In fact, being stuck at home encouraged many people to redirect resources they used to spend on restaurant meals and travel into improving their living space.
Ramping up production at sawmills and factories was much harder than slowing it down. Some workers got COVID. Others were forced to quarantine, and measures to prevent the spread of the virus slowed output.
As with toilet paper, once shortages began, hoarders gobbled up whatever was left. And because wood is a commodity, speculators swooped in, sensing a market opportunity.
The first thing to start drying up was pressure-treated lumber, used on outdoor structures like decks, and other wood products that involve manufacturing, Rendine said. The price of pressure-treated lumber went up 250% at one point, he said, and plywood went up by 130%.
Once boards and wood became scarce, it had a knock-on effect on other building materials, such as engineered panels, windows and doors. And contractors unable to find pressure-treated boards snapped up composite decking.
What should contractors or homeowners with a big DIY project on tap do?
“If you can wait, wait,” Rendine said. “At some point this year, there is going to be a market correction, and it will go down faster than it went up. That may not happen until there’s a vaccine. I would advise anyone, unless they have to build now, not to build right now.”
Although having inventory fly off the shelves as soon as it comes in, even at higher prices, is generally a good thing for business, Rendine said he fears the long-term impact if the shortage continues and projects are canceled.
John Marcantonio, executive director of the Rhode Island Builders Association, said the strong residential real estate market is helping the economy bounce back, and he worries the lumber shortage could slow the recovery.
“Demand for residential construction is higher than it has been in years,” he said. “With the concern about nursing homes, people are keeping grandma home and doing the multi-generational thing, so they build [accessory dwelling units.] And people are working from home instead of the office, and I think some part of that is going to be permanent.”
Stasiunas says the jump in lumber prices is unlikely to damage the high end of the market, where a $20,000 to $30,000 increase in materials won’t derail a $1-million custom home.
But the “middle” range of the market — $400,000 to $600,000 houses built without a specific buyer — might not be as desirable. And the subsidized affordable market could really slow down if this continues, Stasiunas said.
“I think we are in this for a while,” he said.
On Twitter: PatrickAnderso_
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