The prices of lumber are continuing to rise and consequently are affecting construction companies across the country.
CEO of Schaefer Custom Homes Erich Schaefer said, “It’s never hit heights like this before.”
Prices of lumber are leaving local businesses to decide what their next steps are financially.
Schaefer said, “What we see is us seeking alternative building methods. For example, switching projects from typical stick-built structures to concrete and steel. Those prices are going up as well but not as sharply.”
Schaefer Custom Homes, still in need of lumber, makes their purchases much earlier than usual.
Schaefer said, “We actually buy the lumber before we even break ground on the project. Our lumber pricing is only guaranteed for two days.”
Schaefer, owner of a high-end custom homes business for 30 years, says he doesn’t expect the prices to drop anytime soon.
Schaefer said, “The Fed has said they’re going to keep interest rates down. That is fueling the demand for housing and we’re anticipating it’s not seeing major correction until this time next year.”
While his business is still able to function well despite the rise in prices, Schaefer says other projects for other businesses are being affected more significantly.
Schaefer said, “Smaller scale projects or perhaps more significant remodels, people are definitely holding off on those because they’ve got certain funds set aside that they budgeted and they’re trying to stay inside that budget.”
Hayward Lumber is a key distributor of lumber on the Central Coast.
Based on the Hayward’s composite prices, lumber is roughly five times more expensive per board foot at the mill than it was in 2019.
With the rise in lumber prices also means housing prices are higher.
The average price of a new, single-family home is estimated to be $35,000 more than it would normally be.