Tripling Lumber Prices in San Diego County
Lumber Prices for San Diego County
Lumber Prices for April 2020 versus August 2020:
- $260 per thousand feet of board
- $850 per thousand feet of board
They’ve actually come down a little bit since the peak in August and as of today, we are standing at $592 per thousand feet of board. So what does that mean for your home project?
Lumber Cost Examples | 2019 versus 2020 in San Diego County
A year ago Freeman’s Construction Inc built a 2,226 square foot home that had a 576 square foot garage and about 500 square foot porch. The lumber package, which includes all the lumber plus the trusses, was roughly $27,000 to build the home.
- September 2020 we finished a bid package on a 1,200 square foot ADU with a roughly 650 square foot garage and 300 square foot porch in El Cajon which is the San Diego market that we’re talking about. The lumber package for the ADU was $37,000.
The garages and porches were very similar, but the house was about 1,000 square feet smaller, and the lumber package was $10,000 more than the 2,200 square foot home that we built about a year ago which is a significant increase.
- If we would have bid out the lumber package in April for this exact ADU that we’re talking about numbers would have come back about $17,000 to $18,000. So $20,000 more for the same lumber package.
Why Are Lumber Prices Increasing in San Diego County?
So why is this happening? Unfortunately, there isn’t just one answer. The Covid-19 Pandemic has caused a slow production of lumber so the supply is low. We also have more people at home who are doing remodeling projects. It’s more of a priority for them now to get these done because everybody’s at home. The interest rates are also dropping significantly from the Fed reducing them and has now created a boom in the building market. So the low-interest rates cause more affordability and in return drives up demand, which then pushes up the need for lumber.
Third Component in Increasing Lumber Prices
There’s actually a third component to the increasing lumber prices the National Association of Home Builders is talking about and that is there’s a 20% tariff that has been put on the lumber being imported from Canada. So that’s an additional stressor on the prices of the lumber market.
How Freeman’s Construction Inc is Helping Home Project Costs
What we’re doing to try to help the homeowners that we’re working for to build their homes is we’re taking that lumber line item, so the trusses and lumber package, and we’re leaving that as an allowance. We do this because it’s such a volatile number and can cause the lumber package price to go up or down.
We’re also buying the lumber directly from the supplier so it’s not getting marked up by a subcontractor, and then any savings that come from that, we’re passing that on to the people that we’re working for towards building their home.
Increasing Lumber Prices in San Diego County
There is a definite increase in the lumber market and it’s moving every day, but we’re keeping a close eye on it. I hope that helps you understand what’s going on. If you need more information on building a custom home or an ADU or if you’re interested in remodeling your home, you can go to our website. It’s at TFGonline.com and you can get pricing. You can find out a lot of different floor plans that we have for remodeling. Also, get the prices for different, real popular projects that are going on today. All right, thanks for your time, and have an excellent rest of your day.