HANCOCK — Customers may “cringe” when they hear lumber prices upon checkout at Viking Lumber in Hancock, says manager Tony Bagley. But they are making purchases anyway, he notes, despite what the National Association of Home Builders is calling a 130 percent price increase industrywide since April.
As with most aspects of life these days, the pandemic is playing a leading role. In this case, affecting both supply and demand.
“Supply couldn’t keep up with demand,” Bagley said. This is largely due to lumber mills being forced to play catch-up since their March closures due to the coronavirus, he explained.
While lumber mills have worked to get their production levels up, Bagley says home improvement projects have spiked during the pandemic. Many homeowners are spending more time at home, some with disposable income in the form of a government stimulus check. Customers’ projects have included gardening endeavors and using pressure-treated lumber for decks, Bagley said.
He says sales have been “a mix” between retail shoppers and contractors working on larger projects, with the retail side of the business selling a bit more. It is a more positive scenario than he expected back in March when the economic shutdown at the onset of the pandemic left many businesses grappling with an uncertain future.
“Contractors haven’t slowed down,” either, Bagley reports.
One of those contractors is Mike Wight, owner and president of Broughman Builders Inc. in Ellsworth.
“I’ve never been so busy in my life,” Wight said. He credits the workload to out-of-state clients looking to build in Maine, a trend that has been popular for years now, but has been amplified due to the coronavirus, he said.
Maine’s building costs can be a pleasant surprise for customers coming from areas with pricier markets.
Wight said years ago, he quoted a client from New York City on the price of a garage. Wight said the client told him the price equaled “my taxes last year.”
Now, the perks of relatively affordable real estate are coupled with the country’s falling interest rates. Maine’s low rate of COVID-19 infections and the relative ease in accommodating social distancing are also attractive. Out-of-state buyers who are “trying to get out of dodge” now have even more reason to do so, Wight said.
It is not just out-of-staters flocking to work with local contractors despite the price of lumber. For Robert Ray Jr., owner of Ray Builders Inc. in Ellsworth, his local clientele has been keeping him busy.
“When the [price of] building materials started going through the roof, I thought [work] was going to come to a screeching halt,” Ray said. However, he reports that work has just gotten busier.
Ray works mostly with repeat, local customers. He says his clientele has been “willing to absorb the extra expense of the building [materials],” due to low interest rates.
The projections Ray has observed show that “hopefully come spring, building materials will decline in price,” he said, although it may be “far-fetched” to see the price go back to what it was before the pandemic. For now, Ray says he is “at ease” thanks to work lined up for the winter.
One person who thinks there could be a chance the price of lumber falls back to its previous rates is Rob Shea, vice president of E.L. Shea Builders and Engineers in Ellsworth.
“In the past, I’ve seen [the price] come down,” said Shea, who reports that the contracting company has been busy, but mainly with projects that were framed before the pandemic hit. Shea notes that most of the price hikes affected materials used for framing a project.
Even if prices go down, consumers will not be the first to feel financial relief, Shea explained. Retail lumber yards will first have to exhaust their higher-priced inventories.
Both Bagley of Viking Lumber and Fred Perkins, senior vice president of sales at Hammond Lumber Co., say that pricing is beginning to relax for pressure-treated lumber. In addition, Perkins said pricing for plywood and framing lumber is coming back down.
While pricing continues to fluctuate and the pandemic continues to bring uncertainty to economic markets, Perkins said we are “beyond the peak” of high lumber prices. He adds that inventory levels are “still a bit of a challenge but have improved a great deal since the late summer.”