Building Trends for 2013

House Upturn starting to boost lumber prices

Overall trend of lumber has shown that there has been a steady increase in prices since the start of 2012. This study was essential based on a twenty city average for the most commonly used types of 2x4s to build (ENR, see link below).

Pricing are consistently inclining from low levels which was a result of housing market slump which as mentioned  before are now looking much more optmistic. Random Lengths reported as well that framing lumber prices are  up 18.4% over 2011. Framing Lumber is now hovering around $322 per thousand board foot. Another supporting statistic that is great for both General Contractors and the economy was released by the U.S. Department of Commerce is that the monetary value of new private residential renovations is up 15.5 % from previous year.

Other material Prices that are on the increase

  • Concrete and Asphault- Although not as impressive as lumber the bureau of labor statistics stated that ready-mix concrete as of November 2012 in up 2.3%.

Regional Experience

Although San Diego was one of the most impacted economies to take a plunge with the housing market these statistics seem to be aligned with the strength of interest in our services as of late 2012 and 2013. Off the cuff speaking SJB Construction Incorporated is still not experiencing the bull market of building which occured pre-2007. The norm seems to favor smaller remodels such as; Kitchen Remodels, Bathroom Remodels versus an overload of larger projects such as Room Additions and Second Story Additions. However, at bare minimum the general public seems to feel more comfortable about re-investment in their property. Most homeowners are begginning to realize their investment value will ultimately pay off as the world economy shapes up and building prices are rising.

Possible Implications

Taken from a list of the top 5 producers of lumber, Deltic Timber Corporation is listed below. One can draw their own conclusion but the direction of the stock seems to bear optimism. Keep in mind many other factors are involved in the stock market that are completely unrelated to the upward trend (financials of corporation, Div & Yield, P/E ratio, ect.), however at the same token factors such as potential growth opportunity and economic environment also should not be disregarded. Look at the general trend of purchase behaivor, despite one dip it looks like a steady increase from 2012.
Comment and Questions are welcomed, this blog is a blend of industry statistics and 30 years experience riding the cyclical
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Disclaimer: This Blog is opinion based on industry statistics and knowledge of past cyclical trends.