November 23, 2024 6:45 am
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BisNow Reports: The lumber bubble has burst

By Real Estate Daily News

After lumber set an all-time price record of $1,515 per thousand board feet in May, the “cash” market price dropped to $472 per thousand board feet in the first week of August, according to data from trade publication Fastmarkets Random Lengths reported by Fortune. The highest price that lumber fetched by the same metric in the summer of 2018 was $582.

Driving the free fall has been an inversion of the supply-and-demand equation. Just as lumber producers increased their capacity and were beginning to shrink backlogs, developers and construction firms had already started planning for delays, pivoting to other materials or halting projects altogether, Fortune reports.

Lumber costs are felt most acutely by the homebuilding and low-rise multifamily construction industries, where project starts had begun tailing off as prices hit record highs in May, Fortune reports. Steel, which some commercial developers turned to as a way of avoiding lumber, continued to rise in price well into July, Bloomberg reports.

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Rose Law Group Reporter, which provides Dealmaker’s content and service, is contracted by Rose Law Group. Rose Law Group is a full service real estate and business Law Firm practicing in the areas of land use/entitlements, real estate transactions, real estate due diligence/project management, special districts, tax law, water law, business litigation, corporate formation, intellectual property, asset protection, data breach/privacy law, ADA compliance, estate planning, family law, cyber-law, online reputation and defamation, lobbying, energy and renewable energy, tax credits/financing, employment law, Native American law, equine law, DUIs, and medical marijuana, among others. The views expressed above are not necessarily those of Rose Law Group pc or its associates and are in no way legal advice. This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.