Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 16, 1993 TAG: 9302160102
SECTION: BUSINESS PAGE: A-5 EDITION: METRO
SOURCE: CHARLYNE H. McWILLIAMS STAFF WRITER
DATELINE: LENGTH: Medium
LUMBER PRICES COULD POUND A LID ON HOME CONSTRUCTION
Rising lumber prices are threatening to nick the growth in single-family home starts, which were up 13.3 percent last year in the Roanoke Valley."They're killing us," said David Vaughn, owner of Roanoke's Dominion Builders. "And they're going to continue to go up."
Vaughn, also president of the Roanoke Regional Home Builders Association, said the prices are being affected by several factors. Increased shipments of lumber to Florida to rebuild communities damaged by Hurricane Andrew, environmental issues, exports to foreign countries and low production due to bad weather all are making lumber more expensive.
The growth in demand and decline in supplies can be seen in the latest Southern Forest Products Association barometer, showing orders booked on Feb. 6 at nearly 144 billion board feet, compared with 129 billion last year. A board foot is 12 inches by 12 inches by 1 inch.
Production, however, was at 111.7 billion board feet, compared with 120.5 billion last year.
Terry Graham, a buyer with Timber Truss Housing Systems Inc. in Salem, said the cost of all wood products has risen 20 percent to 66 percent. Graham said about 75 percent of Timber Truss' business comes from contractors, the rest from homeowners.
Roanoke builder Diane Zeigler is trying to order ahead as much as possible.
Zeigler, of Zeigler and Parsell Builders, said she reserved enough lumber for seven houses with her supplier, Lowe's. She has to build all seven in the next month, but that doesn't bother her as much as the escalating cost of lumber.
"It's not as bad as it's going to be," she said. Zeigler has the building permits for the houses, which will have three to four bedrooms and will sell for $75,000 to $135,000.
Zeigler said she's spending $3,500 more for the order than she would have had she placed it just six weeks ago. However, if prices continue to climb as she thinks they will, she'll save about $21,000.
Random Lengths, a weekly publication on North American forest product markets, said a 2-by-4 western stud - used in wall frames - went from $215 per 1,000 board feet on Oct. 2 to $357 by Feb. 5, a 66 percent increase. Graham said they were lucky they could get the lumber, under the current demand.
The prices "will come back down at some point in time," said Graham, who has been buying lumber for nine years. "But the end's not in sight for another six to seven weeks, maybe longer."
Vaughn, whose homes sell in a range of $200,000 to $800,000, said his lumber prices are up 25 percent. Builders will pass the extra cost to buyers, he said, but some will have to absorb the prices because they've already negotiated them with customers.
The impact on affordable housing could be tremendous, Vaughn said, driving first-time home buyers out of the market.
For the time being, low interest rates are helping to offset the increased costs. But there aren't many other areas to look for relief. Even if President Clinton eases some of the environmental restrictions on lumber harvesting, he said, bad weather and an increasing need for wood could still keep prices high.