Record-high lumber prices impact suppliers, new homes, DIY projects, jobs, business, real estate, coronavirus, economy

“And prices will be higher next week than they were this week,” Alan Pippenger, president of the Requarth Co., a Dayton supplier, said Thursday.

The cost increases are due largely to an unexpected domino-effect triggered last spring by the COVID-19 pandemic, local officials said.

The hikes have led to some delays in single-family and multifamily residential developments. They also have caused shifts in business practices, including limiting customer purchases and buying truckloads of product without knowing the specific prices.

“We’re seeing precipitous increases in the cost of lumber on a nightly, weekly, monthly basis to the point where almost every construction contract that’s being written has contingencies associated with the price of lumber,” said John Morris, president of the Ohio Valley Associated Builders and Contractors.

The change in contract language started several months ago, said Morris, whose organization focuses on commercial construction and has about 32,000 members in Southwest Ohio and Northern Kentucky.

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Now, he added, it’s “constant and consistent” and has “filtered down all the way to your average home handyman because the price fluctuates on a week-to-week basis.”

Based on 110,000 board feet of random lengths 2x4s, the Chicago Mercantile Exchange recorded the following prices: April 15, 2020: $324; Sept. 14: $984; Oct. 30: $495; Feb. 22, 2021: $1040; and April 15: $1238.

DIY project impact

The price surge has been more acute with commodity lumber items, often used with home improvement projects, Pippenger said.

This includes products such as 2x4s, 2x6s and plywood. Last year at this time, an eight-foot 2×4 cost about $3, but is priced at nearly $9 today, he said.

“For most do-it-yourself projects, what’s really been affected is people building fences and decks. Those tend to use a lot of commodity lumber items,” Pippenger said.

There has been a short supply of preservative-treated lumber used in decks and fences because manufacturers expected the demand to fall with the pandemic, he said.

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“But instead, people decided last summer that since they couldn’t take a vacation, they were going to build a deck,” Pippenger added.

Cost increases have been less severe with non-commodity products often associated with home remodeling projects, such as windows, trim and cabinetry, he added.

Annual home improvement spending this year is expected to grow from 1-13% in 42 major metropolitan areas, while declining at 1.5% or less in four of the 46 metros tracked, according to the Joint Center for Housing Studies of Harvard University.

Fourteen metros are projected to see “robust growth” above 6% this year, while an additional 17 metros are set for moderate gains between 3-6%, the center said.

Reasons for the surge

A combination of factors — many coronavirus-related — have played a role in the price surge, local industry professionals said.

Some lumber mills shut down last spring. There is a shortage of truck drivers to haul the products. Interest rates are low, leading to a strong new homes construction market. And there has been a rise in home-improvement projects.

After the pandemic hit, many lumber mills closed, leading to a labor shortage to fill jobs, local officials said.

Meanwhile, there was “an unforeseen surge in the nationwide housing market” aided by low interest rates, said Eric Farrell, executive director of the Home Builders Association of Dayton.

“I think when the pandemic happened probably few expected (housing) to be a leader in the national economy and accelerant and kind of carry the national economy – really for the last 12 months,” he said.

Total housing starts last year were up 7% over the 2019, with single-family units rising 11.7% and multifamily starts down 3.3% from a year prior, National Association of Home Builders records show.

Locally, permits for single-family homes, condominiums and apartments rose 2.4% from 2019 to last year, according to the HBAD.

“Nobody knew that residential real estate and remodeling was going to go off the charts,” said Charles Simms, president of Charles Simms Development.

COVID stimulus packages “gave millions to Americans to improve their homes because they couldn’t leave their homes” for periods of 2020.

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Pippenger said the lumber rate hikes are part of “this rolling problem – partly the pandemic, partly this high demand for housing.

“With low interest rates, people are buying houses,” he added. “For the commodity materials, it’s supply and demand. The demand is really there and it’s draining our supply.”

Supply shortages

Since last summer, Pippenger said the 161-year-old business started by his great-great-grandfather has been limiting quantities for certain products to service longtime customers.

“Some of those orders I turn down,” he said. “Because I need to make sure that I have my regular customers covered with the material that they need.”

Pippenger said a vendor wouldn’t give his business the cost on a large shipment of lumber until it arrived in Dayton. The vendor called it “priced time of shipment,” a “new word in my vocabulary”, Pippenger said.

“So we were buying truckloads of lumber not knowing what they were going to cost until a month later – just to have material,” he said.

With record-high prices, suppliers are less likely to have an excess of inventory, Morris said.

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“The lumber is being bought on an as needed basis,” he said. “So, if you need any large quantities, there’s going to be a lag time.”

The supply shortage is “causing build times” for new homes “to be definitely longer – 20-30%” in some cases, Simms said.

Some new home starts are also being delayed, but Simms said his company has developments under construction in Beavercreek, Centerville, Springfield and Lebanon.

The new home price increases in the Dayton area due to lumber costs are below the national average, Simms said.

He estimated the price in this market for homes in the $200,000- to $300,000-range to be up “between $10,000 to $15,000 while houses in the $300,000- to $500,000-range would cost around $20,000 more.

What’s next?

High lumber costs were cited recently by a company seeking to amend its plans to build a 110-unit apartment complex at Cornerstone of Centerville, a 156-acre mixed-use development off Wilmington Pike near Interstate 675.

Treplus Communities sought to replace wood with vinyl as the dominant façade material for its plans for Dogwood Commons, a development for those 55 and older.

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“We’re doing everything we can to start the project,” Treplus Development Director Steven Hicks told city officials in March.

The project was supposed to start last year and “it’s been a struggle to pin down all of the materials and labor necessary within the price ranges…that will make it work,” Hicks said.

The city rejected the change and Treplus said Friday it is moving forward with the development.

Hicks has said he hopes lumber costs drop, a move that is likely as COVID concerns decrease, Simms said.

“I think we’re already seeing lumber level off a little bit,” he said.

Pippenger agreed, but added “I don’t necessarily believe they’re going back to where they were pre-pandenmic.”

BY THE NUMBERS

•$24,000: Average cost increase of a new single-family home since April 2020.

•193: Percent of cost increase for lumber since April 2020.

•13: Top percentage increase projected for 2021 home improvement spending in 42 major metropolitan areas.

•$9: Estimated price of 8-foot 2X4 today.

•$3: Estimated price of 8-foot 2X4 a year ago.

SOURCES: National Home Builders Association, Fortune magazine, Joint Center for Housing Studies of Harvard University, Requarth Co.

We didn’t think we’d be a shop that would have to make a post like this, but here we are... Our staff in West Chester...

Posted by Holtman's Donut Shop on Saturday, February 20, 2021

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*** Correction the person I called was Toni not Lori and I have her cell number***nnToday I had a coffee chat to meet...

Posted by Jennifer Gross - Ohio House Representative District 52 on Saturday, February 20, 2021

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Three of the company’s 13 parks never opened for the 2020 season."},{"_id":"J66NMX2QKBGD3FB3NIUUXDX74Q","additional_properties":{"inline_comments":[],"comments":[],"_id":1613577268353},"type":"text","content":"For the full year ended Dec. 31, 2020, net revenues totaled $182 million versus $1.47 billion for 2019. 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When it opens to campers, it will deliver 73 cottages and 164 full-service RV spaces, with the addition of another 100 cottages planned for the future, according to park spokesman Chad Showalter."},{"_id":"PVOGBPJXNVGJXIWIPLUQS3YZNA","additional_properties":{"inline_comments":[],"comments":[],"_id":1613591562793},"type":"text","content":"The resort will be located on more than 50 acres of land less than a mile from the front gates of Kings Island. It will include outdoor entertainment like two pools, ponds, a walking trail and dining options, as well as camping facilities like bathhouses, a laundry facility, firepits, grills and picnic tables."},{"_id":"BY7ICBVBORFYDDEBSSFE7D63YY","additional_properties":{"inline_comments":[],"comments":[],"_id":1613591562794},"type":"text","content":"Camp Cedar also will offer Stay and Play packages with Kings Island. More specifically, the resort’s Grand Lodge will include an indoor/outdoor restaurant and bar, as well as shopping, exercise facility and large fireplace."},{"_id":"7N7D3F7HMVGZRKOFNQQFQZCUBE","additional_properties":{"inline_comments":[{"pos":200,"comment":"T"}],"comments":[],"_id":1613591562795},"type":"text","content":"Construction of the resort is not the only thing happening at Kings Island this offseason. Carpenters are working to replace more than 500 feet of mostly original track on both sides of rollercoaster the Racer, Showalter said."},{"_id":"BHSC3RHO7VBTLDIOBJUM4VAB4E","additional_properties":{"comments":[],"_id":"J4W3QNU5HRDJLLVP7MGDAXCRGA"},"type":"interstitial_link","url":"https://www.daytondailynews.com/news/local/things-you-didn-know-about-kings-island-history/72rbIe8IffOx7bR2NYD0HP/","content":"It’s been a thrill ride! 10 things to know about Kings Island past and present"},{"_id":"LMPB75MPPJFITKNUNSLNJ6O42U","additional_properties":{"inline_comments":[],"comments":[],"_id":1613591562797},"type":"text","content":"“The work is occurring on both sides of the twin-track roller coaster, from the base of the first drop through the drop on the 65-foot tall fourth hill,” he said. “This track work will deliver a smoother and more enjoyable ride experience on one of the park’s original attractions.”"},{"_id":"TWTWS26JQZD6PHQNF5B3BSOWIE","additional_properties":{"inline_comments":[],"comments":[],"_id":1613591562798},"type":"text","content":"The Racer has given more than 106 million rides since it opened in 1972, far more than any other ride at Kings Island, Showalter said."},{"_id":"USD6A6JBWRCDFG2XCVWC3TQ7V4","additional_properties":{"inline_comments":[],"comments":[],"_id":1613591562799},"type":"text","content":"Zimmerman said the company has “strategically designed” its operating plan for the 2021 season specifically to minimize cash burn in the pre-opening period and correlate park operating calendars with forecasted demand while growing its season pass base for the 2021 and 2022 seasons."},{"_id":"GN64MLU5QBAT7CY3MIXNA7B6CA","additional_properties":{"inline_comments":[],"comments":[],"_id":1613577268358},"type":"text","content":"Cedar Fair suspended operations at its parks starting March 14, 2020, in response to the spread of COVID-19 and local government mandates. In accordance with local and state guidelines, it resumed partial operations in 2020 at 10 of its 13 properties on a staggered basis beginning in mid-June through mid-July."},{"_id":"VITQ6KDOMFB4BN7FQMRYO4AL6U","additional_properties":{"inline_comments":[],"comments":[],"_id":1613577268359},"type":"text","content":"Kings Island opened for the 2020 season on July 2."},{"owner":{"sponsored":false,"id":"coxohio"},"address":{},"syndication":{},"caption":"Kings Island's Tricks and Treats fall festival will continue through Nov. 1. 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The operating loss was the result of the 88 percent decline in net revenues, offset by the $507 million decrease in operating costs and expenses between years."},{"_id":"J66NMX2QKBGD3FB3NIUUXDX74Q","additional_properties":{"inline_comments":[],"comments":[],"_id":1613577268363},"type":"text","content":"Working closely with state and local officials, the company established 2021 opening dates for its seasonal parks ranging from May 8 to May 29. Kings Island is scheduled to open for Passholder Preview days on May 8 and May 9, about a month later than its usual opening."},{"_id":"44UOLWZDS5GWJODHTMZZIPFZDA","additional_properties":{"inline_comments":[{"pos":42,"comment":", though that typically occurs about a week after preview days. 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It lets you send money instantly from a stored credit card, bank account or pre-loaded Venmo card to anyone with an account. Therefore, Venmo has a lot of your personal information you want to keep safe. While it’s easy to use to pay friends and family for items, it’s important to be aware of the dangers. "},{"_id":"ME445QY73NCNDGLSTJLQBYI3W4","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","content":"While Venmo is mostly safe, it’s important not to participate in high-risk activity with your finances."},{"_id":"XOQAH7T3UVCKPFVJIXQRY2EM3E","additional_properties":{"inline_comments":[],"comments":[],"_id":1613069871634},"type":"text","content":"Even Venmo is aware of these scams and puts a warning on its website that Venmo is designed for payments between people who trust each other because there is no protection for the buyer or seller. Therefore, it’s important you don’t accept or give money to strangers who could potentially be scammers. For example, scammers connect stolen credit cards to Venmo and use them to transfer money to unsuspecting users. If you send the money back to the scammer, he or she will delete the stolen credit card from the account and add his or her own card in its place. Others send screenshots of fake emails that make it seem like they’ve paid you through the app, when they actually haven’t."},{"_id":"T3CNNM756FGVVOC2USXNWIW4U4","additional_properties":{"inline_comments":[],"comments":[],"_id":1613069871635},"type":"text","content":"Better Business Bureau offers these tips for avoiding Venmo scams:"},{"list_type":"unordered","_id":"BHZRZSV4ABARLELYTO6KON3WWE","additional_properties":{"inline_comments":[],"comments":[]},"type":"list","items":[{"_id":"EQEOBBDPGJGJ3AHI5SOLUYA2R4","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Send or give money only to people you know and trust."},{"_id":"KMWKMZ3JR5FYBJJ2ORIAVNSG6E","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Don’t use Venmo to join a pyramid or any other get-rich-quick scheme."},{"_id":"ISOPFW5V5BCGHGQWWNWUQ5HV2M","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Don’t provide any services or goods you’re selling to anyone before receiving compensation."},{"_id":"3UZKZPSUAREUHEV2XCPHEPW7JQ","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Don’t let anyone use your phone, so they cannot open your Venmo account and send money to themselves."},{"_id":"IL6OKQINDREMTBTYE2TYHHZRGQ","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Ask the sender to cancel the transaction if you’re sent money by mistake. The sender can cancel the transaction. If the person refuses, it’s probably a scam."},{"_id":"RWQEAS3J3ZBY7PV7ZFHCMJK3PM","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Understand if someone tells you that he or she has sent you a payment, but it will only arrive when you ship the item, it’s a scam. Venmo doesn’t offer this service."},{"_id":"JHAMGSNU4ZEXLHNELK45R6PYNI","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Be wary if someone pays you with a stolen credit card. The money could be removed from your account when the actual card owner reports the unauthorized use."},{"_id":"K757E2W5XFCH5IMXDMNPHLQXYQ","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Don’t send money to anyone before checking with him or her first. Scammers may steal a profile picture to impersonate your friends and ask for money."},{"_id":"JC6LDYZIB5HWJMH56EW5B4IGDI","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Use security measures, such as multi-factor authentication, requiring a PIN or using fingerprint recognition."},{"_id":"SD26ZTAQPZGLPMWWQQU5FUGTCQ","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Link your Venmo account to a credit card instead of your bank account. This will help protect you so you can dispute any fraudulent charges. You may also consider leaving a small amount in your Venmo account and spend from your Venmo balance."},{"_id":"64MPJQQGJBAJHOWHM2ZS5O5CVU","additional_properties":{"inline_comments":[],"comments":[]},"type":"text","block_properties":{},"content":"Report scams to Venmo so it can freeze the suspicious account. However, this generally doesn’t help the seller get back money. It only stops the buyer from doing more transactions and scamming more people."}]},{"_id":"UGRCYQT3N5GDTPOJDCTTSBSDRQ","additional_properties":{"inline_comments":[],"comments":[],"_id":1613069871637},"type":"text","content":"For more information about scams, visit BBB.org or call 937-222-5825 or 800-776-5301. You can also report scams to BBB Scam Tracker at BBB.org/ScamTracker."}],"display_date":"2021-02-15T14:04:38.897Z","headlines":{"basic":"Venmo scams becoming more prevalent. 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