Has the housing slow down affected lumber prices??

[Brad Bartley]

I'm new to woodworking and have recently - within the past few weeks - began pricing lumber.

Knowing that lumber has a relatively fixed supply, It would seem to me that the recent housing boom has likely driven significant demand for lumber resulting in higher prices than had existed before the boom. Likewise, it would seem to me that the cost of lumber would be driven down by a down turn in housing and construction.

My question is have you guys seen the cost of lumber vary with respect to the health of the economy, especially with respect to this most recent housing down turn?

During the last 35yrs, which species of lumber has been most volatile in terms of USDs and which have been more stable?

[Robert Waddell]

Brad,
The few years I've been at this I've not seen that much flux in pricing except for constuction lumber (pine, spruce, etc.) and sheet goods. Low end sheet goods are more likely to increase in heavy hurricane seasons than anything else. Construction lumber and sheet goods are coming from all over the world, places like Sweden, Brazil, Russia, and China.
Domestic hardwood seems to be more stable. Exotics have inched up a little which has a lot to do with what's in vogue. Sapele is hot right now. A couple a years ago it was Jatoba.
I've cut my prices on almost every species over the last year but it has been because I've searched out better suppliers not because the price has come down.
Rob

[Ed Ditto]

The Chicago Mercantile Exchange runs a lumber futures contract. This is just a way for lumber interests to lay off financial risk associated with their business, so it's not the best proxy for the prices you'll pay at the hardwood supply place. But it's at least indicative of the wholesale mood--that, yes, we're in a housing correction and it's taking pressure off wholesale lumber prices.

The CME's contract is in $US for 110,000 BF of random-length (8' to 20') 2X4s. Right now the contract is trading for in the neighborhood of $26,000.

I ran historical price charts for the last four years and saw that the contract is off 35% or more from its 2004 highs.

Here's the CME's lumber contract info page:

http://www.cme.com/trading/prd/ag/lumber_FCS.html

Here's 12/24's daily bulletin from CME about the contract price:

http://www.cme.com/daily_bulletin/Section23_Lumber_Options_2007249.pdf

Here's where you can run a historical price chart:

http://futures.tradingcharts.com/hist_LU.html

If you really want to geek out on this stuff, here's an analyst who follows lumber futures:

http://www.slipkafinancial.com/lumberfutures.php

Ed

[Jim Becker]

Brad, some materials have been affected (construction related) by the building boom/slump and others have not. If you read Woodshop News, you'll note that various species of lumber used for furniture and cabinetry have gone up and down, depending more on subjective demand factors as well as supply.

[Carroll Courtney]

Where I'm at (outside of Houston)the housing market is strong,or so it appears to be.Everywhere there is vacant land is being purchase and subdivision are being built.I work for a school dist.and can't build elem. schools fast enought to keep up with the people moving in and provide spanish speaking teachers.I used to see deer all the time,now all I see is dozers, and over price cheap houses being built. All ready I see the paint fading away on houses less than a yr old.Prices here is still high,even on the cheap material.Where I used to use 3/4 birch ply,I now try and fit in MDF.Talking about ply,the price is still up,but the quality in way,way,way, down.

[Tom Walz]

As someone who supplies sawmills I can testify that lumber supply is very flexible. Housing and lumber are cyclical. When times are good everyone supplies all they can.
They go from three shifts to two and so on. They shut down for a full week or two over holidays.

Random lengths (see below) is widely watched in the industry. CME is the authority for prices. RL shows mill closures, etc.

http://www.randomlengths.com/ (http://www.randomlengths.com/)

I would guess that the highest increase has been in top end lumber of any kind.

Tom

[Kyle Kraft]

I can't speak about lumber too much, but I can tell you the price of a 250' roll of 12-2 Romex is a bit over half what it was a year ago. $62 versus $112.

[Tom Walz]

Thanks to those that let me know.

I think I’ll leave it. I always hate it when I hear about something after the joke is gone.

Re: holidays – we have $53.00 in sales today with 5 people working. It is 2:18 and seems to be slowing down. It was great watching the little kids open presents but this holiday is hard on us poor folk that have to work to get by.

tom