Monday, March 10, 2014

Update: Framing Lumber Prices

by Calculated Risk on 3/10/2014 01:15:00 PM

Here is another graph on framing lumber prices. Early last year lumber prices came close to the housing bubble highs. Then prices started to decline sharply, with prices declined over 25% from the highs by June.

The price increases early last year were due to stronger demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity online).

Prices are down about 10%  from a year ago, probably due to more supply coming on the market.   Here is another mill coming back from the Oregonian: Cave Junction sawmill will reopen

If all goes as planned, the small-log mill will be retooled and running by July. Its owners say they are confident that they can maintain a single shift, and put 67 people to work running the mill.
...
Rough & Ready was the last sawmill operating in Josephine County, putting a psychological and economic capstone on the decades-long decline of Oregon’s timber industry. The industry employed 25,400 people statewide in 2012, half as many as in 1992.
...
“Demand is good right now,” Link Phillippi said. “Our markets are good. our customers are begging for wood.”
Lumcber PricesClick on graph for larger image in graph gallery.

This graph shows two measures of lumber prices: 1) Framing Lumber from Random Lengths through last week (via NAHB), and 2) CME framing futures.

Prices are probably close to the peak for this year (demand usually peaks seasonally in March and April).