First Shoe Falls-

[ModSquad]

We just got a call from one of our builders. The price of OSB (plywood type sheeting) just went up $10 per sheet. I believe the price was at about $10 per sheet, so it doubled. One of the single family home roof jobs we had recently priced went up $400 due to this.

What does this do to the millions of dollars of construction already bid and ready to break ground? Strap your seat belts it is going to be a bumpy ride in the building industry.

[GRDadof3]

We just got a call from one of our builders. The price of OSB (plywood type sheeting) just went up $10 per sheet. I believe the price was at about $10 per sheet, so it doubled. One of the single family home roof jobs we had recently priced went up $400 due to this.

What does this do to the millions of dollars of construction already bid and ready to break ground? Strap your seat belts it is going to be a bumpy ride in the building industry.

Most of the larger builders lock into contract pricing, and then hold the prices steady for customers throughout construction. But those contracts are limited time frames (6 mos/yr). Small builders take what they get, and usually have to pass the increase on to the buyer who is already under construction. I have also heard that much of the lumber that builders are getting in this area is terrible, and has to be sorted through for the good stuff (sometimes 20 - 30% scrap). That was not the case just a year or so ago.

[GRDadof3]

Wait until the good contractors start heading down there. If they can go and be guaranteed work for 12 - 18 months at a set cost from FEMA, why not do it. I'm not prophesizing doom here, but things will start getting tighter.

[snoogit]

this should not impact steel as much as it is wood. Since that area is a large contributor of SYP, which is a rather common building material in single and two story construction.

[GRDadof3]

Dave's not talking about steel. He's talking about lumber, which will have a very adverse affect locally and around the country.

I think I also heard that a large Georgia Pacific drywall plant got wiped out too. I'll have to research that one.

[snoogit]

Dave's not talking about steel. He's talking about lumber, which will have a very adverse affect locally and around the country.

I think I also heard that a large Georgia Pacific drywall plant got wiped out too. I'll have to research that one.

I know that, but the big projects shouldn't be hurt as much as the smaller projects. because of lumber.

[GRDadof3]

You're right, the handful of projects downtown that you can count on 2 hands won't be affected (although they use much more than steel in high-rises), but the 4000 or so homes built every year, and 50,000 or so renovation jobs in this area probably will be affected, like Dave's projects. And it's not just here that will be affected.

[torgo]

You're right, the handful of projects downtown that you can count on 2 hands won't be affected (although they use much more than steel in high-rises), but the 4000 or so homes built every year, and 50,000 or so renovation jobs in this area probably will be affected, like Dave's projects. And it's not just here that will be affected.

There has been a lot of talk about this "housing bubble" getting ready to burst. Expensive materials means more expensive homes and more expensive repairs. It might not cause this so-called burst, but it certainly ain't gonna help anything.

[GRCentro]

My family recently purchased a neighboring house and plan on renovating it. Luckily, they signed with the contractor and locked in on material prices just before Katrina. However, the actual renovation has been delayed because all the materials went sent South and are on back-order.

[GRDadof3]

There has been a lot of talk about this "housing bubble" getting ready to burst. Expensive materials means more expensive homes and more expensive repairs. It might not cause this so-called burst, but it certainly ain't gonna help anything.

I don't think there is going to be a housing bubble "pop", but many experts are forecasting corrections in most of the country. I was just talking to my boss about it this morning, and he equated it to the early 1980's. The difference back then was that they go hit with the quadruple whammy: high interest rates (12 - 13%), high inflation, high energy costs, and high unemployment (I think Michigan peaked at about 15% in 1983). This time, Michigan is a bit more diverse, interest rates are still very low, and unemployment is below 6%. Quite a bit of difference. I think the country and West Michigan will be able to absorb some pain for awhile, but if you are thinking about remodeling this coming year, better move up your plans.

I just wish certain people in Lansing would stop sugar-coating it, and would actually realize the seriousness of it and get out of the way.

[torgo]

I just wish certain people in Lansing would stop sugar-coating it, and would actually realize the seriousness of it and get out of the way.

No kidding. There is nothing wrong with saying "Our economy sucks right now" out loud. At least that way they could start a conversation of how to fix it, instead of finger-pointing. Here's a thought, I offer freely to the clowns in Lansing (and Washington, for that matter): It doesn't matter who screwed it up or how it got that way. Its screwed up, right? So start trying to fix it! Sheesh!

Although I would be lying if I said I didn't find the non-stop partisan bickering tremendously entertaining.

Back to the subject...I think there will be a slow-down with regards to housing, but not a "pop" that will bankrupt everyone overnight. You're right Jeff, there are many other factors. But I daresay that when you factor high energy costs, high price of building materials and (slowly) rising interest rates that suburbia is going to slow down a tad in the future.