[Source: www.nbnnews.com, May 3, 3010]
Builders in Sioux Falls, S.D., say increasing lumber costs haven’t hit them yet, but they are bracing for the future as they start new projects. “We won’t see the price increase for another month or so,” said Gary Harr, one of the owners of Harr and Lemme Homes. “Anything that we start from now on, it’s going to affect those prices.” The cost of lumber and wood products accounts for one-third of the cost of materials used to build a home, according to NAHB. At $350 per 1,000 board feet — close to the $365 cost reported by Random Lengths on April 30 — the lumber package for a 2,400-square-foot home would cost more than $9,000. The increase comes after a down period for lumber prices because of low demand and an oversupply in the market. But demand has started to build, and now supply is not able to keep up, explained Jon Anderson, publisher of Random Lengths. “When things start to get better, it’s a difficult decision to commit to reopening saw mills,” Anderson said. “It might take a while because despite the price behavior, the overall picture is still not anywhere close to health.” In Sioux Falls, Al Schoeneman, owner of Schoeneman’s Building Materials Center, said he has product in inventory that has helped him to avoid the steep rise in costs so far. But he said if he were to buy lumber today, it would be about 60% higher than it was in February. Daryl Christensen, president of the Home Builders Association of the Sioux Empire and owner of Prairie Risings Construction Services, said he has his lumber prices locked, but he’s noticed they’re starting to creep up. He expects the numbers to keep increasing. How much such cost increases raise the price of a home remains to be seen, though Harr said he doesn’t expect the effect to be severe.
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