My wife and I moved into our downsized home three years ago. Our timing was good. There was some available inventory, and we were able to purchase a very nice home for a reasonable price. This weekend we received a letter from a realtor who is representing a buyer that wants to purchase a house in our subdivision. It’s a small subdivision with only 22 homes, all of which were built between 2016 and 2019.
I responded to the email basically telling them that I wanted $200/sq. foot for our house, which would represent a 30% increase versus what we paid. The realtor didn’t even blink. He asked for pictures of the kitchen and said his buyer would be interested at that price. I later told him that we were not interested in selling. But this got me interested in the price of lumber. It’s been a big new item.
The Economic Impact of COVID-19
Between January and May of 2021, lumber prices have increased 4X. The National Homebuilders Association estimates that the cost of a 2,000-square-foot home had to increase by an average of $38,000 because of lumber prices. According to our local realtor, an even bigger impact is the inventory of available homes for sale. He told me there are only 238 homes on the market in our town, when normally this time of year, we should have around 2,300 homes. Covid-19 has created some weird market dynamics, and my interest in them led to the creation of the Tableau viz below. You can also find the workbook attached.