“The lumber is a component of it,” Kovach said. “Typically the lumber package includes the roofing, the flooring, sheathing, everything. It usually represents four per cent for the sale of the house. In building it’s between six to eight per cent. Right now it’s at around 15 per cent.”
Kovach told Global News the price of lumber has soared to an all-time high.
In April 2019, the price of a common lumber western spruce and fir two-by-four was around US$400 for every 1,000 cubic board feet. That price is nearly three times that amount today at just over US$1,100 for every 1,000 cubic board feet. The average since 1999 has remained around the US$400 mark.
Kovach added that the demand for lumber dropped drastically in late winter of last year and the commodity industry is very much supply versus demand-driven.
“It’s snowball effect from March when the demand for lumber fell off of a cliff,” Kovach said. “The pandemic (lockdowns) forced mills to close, they had to curtail their operations.”
Mike Wagner, the general manager and president of Daytona Homes Saskatchewan, says over the past six months the cost of a home has increased roughly $50,000. He adds the industry hasn’t felt the full effect of any shortages.
“I think this summer is where we are going to see the shortage of the material hit,” Wagner said. “So far, it has been more of the pricing impact on the industry.”
According to Kovach, product lines have been affected greatly this year.
“The (February) freeze in Texas has created setbacks as the plants that process resins and other raw materials to produce plants, adhesives, insulation and plastics used for a variety of product lines and industries as well (were affected).”
Transportation of goods has also been affected by the COVID-19 pandemic. One truckload carries 28,000 board feet, while train rail cars can hold 100,000 to 112,000 board feet.
Kovach says traditionally the price balances out at some point and doesn’t remain high forever. She expects that to happen again.
Wagner adds it’s important to inform people of possible delays and to preach patience.
“To give them a firm schedule just can’t happen,” Wagner said. “There are too many spots that are questionable for getting materials on time.”
Experts in the housing market say it remains strong in centres such as Saskatoon and Regina as people continue to purchase new homes, build new homes or do home renos during the pandemic.