Soaring lumber prices highlighting increase in home development materials
Rising lumber costs have been causing dramatic increases in construction costs for homes, buildings, and other developments.
RAPID CITY, S.D. — Timber prices continue to soar — evidenced by an increase of $24,000 in construction costs on a single-family home from this time last year to now.
Rising lumber costs are causing dramatic increases in construction costs for homes, buildings and other developments.
The timber industry in the Black Hills struggling to get logs into sawmills due to a decrease in lumber availability.
“What we’re seeing is that classic kind of economics 101 that the supply and demand curves have shifted and the price has gone up tremendously,” said Ben Wudtke, the Executive Director of the Black Hills Forest Resource Association.
Homebuilders and developers planning through price increases of 30 to 40 percent of all materials, not just lumber.
“We’re seeing it affect all the projects that we have, you know, if it’s lumber, or steel or whatever, we’re finding that the more we’re planning ahead, the better off we are,” said Kyle Treloar, the Vice President of Dream Design International.
Now, companies are also comparing the prices and finding that lumber alternatives may be better on the pocketbook.
Treloar says materials like steel are now becoming the norm.
“Those are the kinds of things that we’re looking at and those substitutions that we’re making,” Treloar said.
As more people come to the area, they should expect an increase in building costs.
“Real estate sales are good, they’re robust,” said Marty Wilcox, the President of the Black Hills Association of Realtors. “A lot of people moving town, it’s affecting pricing, supply, demand, the whole bit.”
The increased material costs putting builders in a tough bind, and the prices trickling down to home-buyers – in some cases bumping up the total by $15,000.
“That’s affected a lot of builders and in some cases, they’ve had to go back to some of these pre-solds, cancel the contract, raise the price,” Wilcox said.
A nationwide problem with no end in sight.