We’re glad you asked...here’s our best shot at breaking it down for you! 🤠
🦠 Early 2020 - Covidius appears on the scene. Governments lock down, businesses close (this includes lumber mills, logging outfits, etc.), mass confusion everywhere...people ask themselves - “how bad is this thing? Am I going to be safe?”
💰 Governments send out stimulus checks to folks, many of whom are now working from home.
🔨 You’re at home, you just received some stimulus money, the fence needs mending, let’s get to it! “Hey, we talked about building that sunroom (shed, deck, etc) last year, we might as well do it now, we’re at home for the next couple of weeks!”
💸 Money hits everyone’s pockets, we have time on our hands, lumber flies off the shelf.
📉 Lumber mills are closed, or have reduced production in anticipation of reduced demand due to Covidius (supply is down).
📈 Lumber is flying off the shelves (demand is up). This means the price is bound to jump.
📆 Flash forward to today - lumber costs have increased!
Enough about the market and Covidius, how does this impact the price of the home I am thinking about building?
👎 Bad news: we have seen increases in plywood, 2x4 & 2x6, floor joists, & trusses.
👍 Good news: these items do not make up the majority of your build costs. Yes, a sheet of plywood is now more than double what it was a year ago. No, the cost of your house hasn’t doubled - to make things as simple as possible, you can expect our pricing to be about 10% higher than what it would have been a year ago.
👍👍 Great news: if you’re one of our clients from the US, your dollar is still strong compared to the Canadian dollar (eh). $1 USD buys about $1.25 CAD at the time of writing (April 27). That is a lot of buying power! Our costs are fixed in Canadian dollars, but we sell to you in US dollars. The borders are all open to commerce - meaning we can ship our homes into North Dakota & Montana, no issues there.
For our Canadian clients, you’ll be happy to know that the housing market in Canada is! This means that if you’re selling a house to build a new one, you should be looking forward to getting more than you would have a year ago, which covers the cost of these current lumber costs...it also helps you on the appraisal side of things - that new home is going to appraise VERY well.
Summary: Covidius sucks, it’s pushed our costs up, but the US dollar is strong, Canadian housing market is hot, and things all in all are looking up. Our supply chain is solid, we have awesome industry partners (long term relationships are key!), and we’ve never been busier. We’re blessed!
PS - we are NOT cutting back on quality in order to combat these prices - we only build quality custom homes, and a blip in the lumber market won’t change that.
🍻 Cheers to 2021 that is looking up!! 🍻
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