[HN Gopher] Lumber crash leads to 'blowout' sales as prices crater
___________________________________________________________________
Lumber crash leads to 'blowout' sales as prices crater
Author : awnird
Score : 550 points
Date : 2021-09-16 02:24 UTC (20 hours ago)
(HTM) web link (www.cbc.ca)
(TXT) w3m dump (www.cbc.ca)
| runawaybottle wrote:
| The hope is the same happens to semiconductor prices and supply.
| We can never have this happen again.
| dr_dshiv wrote:
| This is great news for next year's burn
| jdblair wrote:
| I have a renovation in progress in Amsterdam, and the cost
| increase is coming from the 40% increase in the price of
| structural steel (rebar and shell for pilings). Maybe I'll get a
| break on lumber prices, but I doubt it.
| ggm wrote:
| Until the intermodal container crisis resolves, Prices worldwide
| for construction materials will probably still be all over the
| place.
|
| I'd expect localized shortages of almost anything, if it has to
| be carried by sea.
| josefresco wrote:
| I'm doing some work on my house, I STILL get asked from concerned
| friends/family members about lumber prices. It's funny how one
| news snippet from months ago can stick in people's minds, even
| though it's a dynamic and constantly changing market.
| reilly3000 wrote:
| If the price keeps dropping at this rate lumber will be free by
| December! /s
|
| Seriously, this is a welcome correction, and another sign that
| runaway inflation fears were based on hyperbole.
| llbeansandrice wrote:
| Wait, people were saying/thought that this was runaway
| inflation and not a result of supply chain issues because of
| COVID and tons of people suddenly having to spend way more time
| in their house because of COVID?
|
| Maybe I'm ignorant of the inflation argument more than anything
| else but it doesn't even pass the sniff test in my opinion.
| gassius wrote:
| I don't know anything about lumber market and it's transitory
| conditions and fluctuations (other than a last week news
| where I live, northern Spain, that said that woods price are
| at all time high supposedly because demand is also at records
| high, from international markets including japan) so it may
| very well be a transitory price fluctuation because WFH or
| whatever.
|
| That being said, taking out the "runaway" adjective,
| inflation should be expected as a logical consequence of the
| monetary policy at least in US and Europe, and as a matter of
| fact, consumer price index are already up all across the
| board and both Fed and ECB had already adjusted their
| inflation target up. This should surprise no one, you just
| cannot increase the monetary mass by trillions in the year
| where the global economy shutted down due a global pandemic
| and not expect an inflationary spike. The global public debt
| won't be "paid" without an increase on inflation.
|
| And this is not a criticism on the political behind this. The
| decision was made to ease the economic impact of the pandemic
| both in the general public and the private sector and in most
| cases this was achieved, but that doesn't mean the impact
| does not exist, is just that is being spread out in 20 years,
| and part of that would be on inflation.
| llbeansandrice wrote:
| I'm more than onboard with the idea that recent monetary
| policies have put pressure on prices, I just don't see how
| anyone can sanely say that a 4x price increase is (was)
| "caused by inflation". Of course implying that all or the
| vast majority of the increase is directly attributable to
| inflation, adding "runaway" back into the discussion.
| imtringued wrote:
| It wasn't monetary policy that drove inflation. It was
| the fiscal stimulus. It didn't cause lumber prices to go
| up by much though, that was just a basic supply shock. I
| doubt that fiscal stimulus did raised lumber prices by
| more than 10-20%.
| gassius wrote:
| Yeah I didn't intend it like an antagonistic answer,
| because actually is not a binary issue. Price takes in
| account many consideration, fluctuations in production
| and/or demand are one, monetary pressure is other, but
| there are many others (expectation of future behavior,
| for example). I would guess that, at this time, the
| larger the increase ratio, the more probable is that
| transitory elements are affecting the price.
|
| Just a minor caveat I would have with your answer is that
| inflation cause price increase, when for me the price
| increase is just an indicator of inflation, not a cause
| or consequence of it.
| 542458 wrote:
| There seems to be a group of people who predict
| hyperinflation at the drop of a hat. I'm not sure if it's
| paranoia or motivated reasoning though. Maybe a mix of both?
| imtringued wrote:
| I think people predicted hyperinflation since QE has been
| introduced. What people don't get is that QE increases base
| money. When banks run out of reserves the central bank
| gives them more. The reverse relationship doesn't have to
| hold. Giving banks more reserves does not force them to
| lend the money out. The relationship between bank lending
| and base money has been fully decoupled. Whenever QE
| increases the supply of bank reserves it introduces more
| noise into the statistics.
|
| Just because QE doesn't create inflation doesn't mean it is
| a free lunch though. QE purchases treasury bonds and
| effectively takes them out of the market. The government is
| paying interest to itself. There are institutions that need
| those treasury bonds which results in a collateral
| shortage. These institutions will continue buying treasury
| bonds driving interest rates slightly negative leading to a
| "technical" form of deflation however it is quite
| insignificant.
| dhimes wrote:
| QE stands for "Quantitative Easing" (I think) in case
| anybody else doesn't know.
| mikeyouse wrote:
| The other "half" to the inflation calculation aside from
| money supply is money velocity. If people and
| institutions aren't turning over the dollars, there
| obviously won't be inflation. As expected given the low
| inflation we've seen, V has rapidly decreased as M
| increased.
|
| https://fred.stlouisfed.org/graph/?g=GOR4
|
| (Both indexed to 100 as of the beginning of the 2007
| recession)
| [deleted]
| vibrato2 wrote:
| Or doubling the money supply in a year. Not exactly an
| unrelated event like a hat drop
| HWR_14 wrote:
| It may have started as one or the other, but at this point
| they've been predicting hyperinflation for so long that
| they now have motivated reason to be "right, just called it
| too soon"
| xfhgjxcfgh wrote:
| Low interest rates, QE, stimulus, and rocketing stock prices
| facilitated the hot real estate market as much as proximate
| covid policies. You are correct to guess there is a
| substantial discussion that you're ignorant of.
| Dylan16807 wrote:
| Low interest rates don't increase inflation do they? And
| rocketing stock prices are definitely not a part of
| inflation.
|
| QE and stimulus can certainly _contribute_ , but "as much"
| is a pretty big overstatement. If anyone thinks inflation
| was a notable fraction of the price quadrupling, they're
| being ridiculous. Even a huge amount of inflation would
| only be 2-4% of the lumber price increase.
| oceanghost wrote:
| Actually low interest rates are one of the primary causes
| of monetary inflation due to how fractional reserve
| banking works.
|
| The TLDR is this. I borrow a million dollars, and give it
| to you for a house. You deposit it, and your bank loans
| 97% of it to someone else. They deposit that, and loan
| 97% of that out again... ad infinitum.
|
| Commonly this is called the "money multiplier."
| imtringued wrote:
| Low interest rates increase the attractiveness of loans,
| they don't actually force people to borrow money.
| JumpCrisscross wrote:
| > _I borrow a million dollars, and give it to you for a
| house. You deposit it, and your bank loans 97% of it to
| someone else. They deposit that, and loan 97% of that out
| again... ad infinitum._
|
| This is how it's taught in school. The more-accurate
| version is that "whenever a bank makes a loan, it
| simultaneously creates a matching deposit in the
| borrower's bank account, thereby creating new money" [1].
|
| Interest rates make borrowing cheaper. That spurs demand
| for loans which lets banks create deposits. To have the
| capacity to make those loans, the banks need sufficient
| reserve margin to meet the reserve requirement. This is
| usually a non-issue. They also need enough risk-adjusted
| capital. This is usually the issue. But if a bank needs
| more of this, and interest rates are low, it can buy the
| reserves through borrowing or equity issuance. Lower
| interest rates make both cheaper.
|
| [1] https://www.bankofengland.co.uk/-/media/boe/files/qua
| rterly-...
| oceanghost wrote:
| You're correct of course. I was trying to simplify. :-)
| imtringued wrote:
| Technically low interest rates are a response to low
| inflation. The point is that the interest rate moderates
| saving (in the general sense of deferred consumption) and
| investment.
|
| If there are plenty of investments then limited resources
| won't allow you to do all of them, otherwise we would
| have grown our economy all at once in a single year. The
| interest rate is compensation for deferring consumption.
| i.e. you are being compensated for the opportunity cost
| of not spending money on consumption. The interest rate
| goes up in response to the profitability of investments.
| If I can earn a 8% every year then I am willing to take a
| 5% loan. Inflation makes investments appear more
| profitable than they are so the interest rate has to be
| raised according to inflation.
|
| Well, ignoring 2020 and 2021 inflation was really really
| low to begin with. It's been at 2% at most. When
| inflation is low, interest rates can't go much higher.
| The fact that interest rates have gone down all the way
| to 0% (especially in Europe and Japan) without causing
| any meaningful inflation tells us that the interest rate
| is still too high to attract borrowers.
|
| If one really wants to know whether interest rates drive
| inflation one must precisely define the term "low
| interest rate" because it's all relative. It's relative
| to inflation, it's relative to investment profitability
| and relative to how many people are deferring consumption
| (aka saving). Just because 0% is a really low number
| doesn't mean it's low enough to cause inflation.
|
| From what I have heard (i.e. I don't know if it's true),
| large businesses are being overfunded and small
| businesses underfunded with loans. It's entirely possible
| that some structural reason is preventing lending that is
| completely inelastic to the interest rate.
| ivalm wrote:
| > Low interest rates don't increase inflation do they
|
| Decrease in interest rate increases money supply
| (increase in lending -> new deposits).
| llbeansandrice wrote:
| Yeah I'm not seeing how 4x in price is "due to inflation"
| it might "contribute" or something but I find it hard to
| believe.
| fshbbdssbbgdd wrote:
| Enjoy this beauty from 80 days ago, in which the commenter
| predicts that "from a technical perspective, the 1Y chart on
| that page shows some real promise, for example higher highs
| and higher lows on multiple time scales."
|
| https://news.ycombinator.com/item?id=27653861
| rtkwe wrote:
| Reminds me of an article recently about how the nominal
| inflation 'target' was actually treated and executed in a way
| that made it a ceiling because the Fed and all the monetary
| policy wonk tweaks always missed low and if it did briefly
| exceed the target it was considered a reason to start
| tweaking things.
| sneak wrote:
| Grocery prices still haven't come down.
| throwawayboise wrote:
| Printing tons of money and handing it out to people who will
| spend it immediately tends to at least put pressure on
| prices.
| Dylan16807 wrote:
| "Pressure" sounds like it's in an entirely different
| ballpark from " _runaway_ inflation "
| nradov wrote:
| The new runaway inflation is in steel prices.
|
| https://www.wsj.com/articles/high-steel-prices-have-manufact...
| neb_b wrote:
| This link leads to a 404
| stock_toaster wrote:
| 404s are inflationary too, apparently.
| [deleted]
| edrxty wrote:
| Better link: https://tradingeconomics.com/commodity/steel
|
| Tl;dr...Meh?
|
| It's up but historically it's not that high, it just cratered
| for most of the teens.
| blitzar wrote:
| Steel is much more political with dumping of production in
| foreign countries, tarrifs, national security etc.
| robomartin wrote:
| About a year ago wee started design on a large project for
| one of our clients . Think in terms of something like a full
| size passenger aircraft motion simulator...so, something 100
| feet long and 21 feet wide. Well, needless to say, lots of
| metal makes-up the entire structure.
|
| We had to design this thing twice due to fluctuations in
| metal pricing. The original design was all aluminum. Then
| came all steel, because aluminum became far more expensive
| than steel. Then a hybrid and now steel only. There are other
| factors, such as the relative cost of TIG vs. MIG welding,
| yet, when your material costs increase nearly four-fold you
| can't ignore it.
|
| By the time we finished a reduced scope prototype materials
| pricing and availability was just insane. This has affected
| other components, like fasteners.
|
| At this time, any quote we provide for product development
| --be it electronics, mechanical or both-- includes language
| to say that we cannot hold pricing on anything for more than
| one week. It's got to be that crazy. If you are not very
| careful you can easily end-up being very busy while losing
| money.
| withinboredom wrote:
| I can't imagine that redesign. The difference between the
| density/mass of aluminum and steel, plus the difference of
| inertia the software would have to account for. That must
| have been a lot of work for everyone!
| robomartin wrote:
| Because the structure is regular it was relatively easy
| to scale elements based on both FEA and actual testing.
| We use table various parametric design techniques in
| Solidworks in almost every project. The power of this
| approach is in the speed of iterations when design
| parameters change. Of course, it took years of fine
| tuning and experience to develop the right way to
| approach projects this way.
| TeeMassive wrote:
| I get a 404
| wyager wrote:
| One commodity out of hundreds has come down a bit. I wouldn't
| write off inflation fears yet.
| reilly3000 wrote:
| It's sensible to think that there will be at least inflation
| commensurate with QE. That in combination with pandemic
| related supply chain issues make sense for inflation to be
| very real, but a lasting, runaway inflation lacks the
| fundamentals- consumer purchasing power remains strong and
| there is upward pressure on wages.
| onlyrealcuzzo wrote:
| > consumer purchasing power remains strong and there is
| upward pressure on wages.
|
| Aren't these inflationary?
|
| I think the main problem is how people use "runaway
| inflation" and "hyperinflation".
|
| It seems like most people using these words are imagining a
| world in which prices go up 5-15% (max) every year for
| years.
|
| That is very abnormal for the US. But not hyperinflation.
| Even the 15%. Hyperinflation is reserved for situations
| like Venezuela and Zimbabwe (and, of course, Germany long
| ago).
|
| I don't think hardly anyone sees inflation in the US to be
| as bad as it has been in Argentina. One might describe that
| as "runaway". But it is not hyper. And there is almost
| nothing in the US that has inflated at that level - let
| alone any indication that general inflation will get that
| bad.
| Thorrez wrote:
| Maybe prices will go negative like oil!
| warkdarrior wrote:
| We will have to pay the trees to stop growing!
| adregan wrote:
| You joke, but the timber market is so oversaturated and the
| price so low that getting paid not to cut trees for lumber
| is a real outcome.
|
| Rather than clear timber and plant new trees, you can get
| paid for the carbon they sequester:
| https://www.wsj.com/articles/new-carbon-market-pays-
| southern...
| [deleted]
| silisili wrote:
| 2x4s are reasonable again near me. However, plywood is not for
| some reason. The cheapest grade crap is 30 a 4x8 at Lowes
| tonight.
| Mountain_Skies wrote:
| The price drops do seem to have been selective. I've been
| waiting to buy a bunch of landscape timber for some projects in
| the yard but the price hasn't gone down one penny from the
| peak. Many other types of lumber have gone down. No idea why
| this is the case. I can see on the big box stores websites that
| the inventory keeps going down and getting replenished, so
| unless they bought a bunch at the peak and warehoused them, it
| doesn't make sense to me why they're more than twice the price
| they were six or seven months ago while other products have
| returned to similar prices to what they were early in the year.
| OliverJones wrote:
| Read the first chapter of _The Fifth Discipline_ by Peter Senge.
| It describes this lumber situation fairly clearly, for a
| different product (trendy microbrew beer).
| 10GBps wrote:
| I don't think prices are "cratering" so much as just returning to
| normal rather than price gouging.
|
| Now if I could just buy a GPU for a normal price...
| otterCompile wrote:
| It's so insane. My 5-year old GTX 1060 (320EUR) is still better
| than a new gtx 1650 for 250EUR. Right now there is no direction
| to upgrade my system except for byuing an apu, but since my
| 1060 is way faster this doesn't make sence unless i want to get
| rid of my gpu to get a smaller case (e.g. X300)
| milkytron wrote:
| I also have a GTX 1060 that I got in... 2017 I believe.
|
| I looked up prices recently and it's worth more now than when
| I bought it, and the ones available that I've seen are used.
| Had no idea that would happen and now I'm just happy I have a
| graphics card at all.
| orthoxerox wrote:
| I was lucky to buy a 1080 Ti for like 500$ off a miner a few
| years back. Bitcoin at that moment ended up cheap enough that
| GPU mining became unprofitable, and everyone was liquidating
| their farms.
| albrewer wrote:
| I got one of those at retail price a few years ago and it's
| still one of the best cards out there in terms of video
| memory. I'd have to upgrade to a 3080Ti or 3090 to have it
| beat.
| rootusrootus wrote:
| > Now if I could just buy a GPU for a normal price...
|
| The best recommendation I've gotten so far is to get a gaming
| laptop instead, because the entire laptop costs about the same
| as the desktop version of the same GPU.
|
| Maybe that's shitty advice, I'm not a PC gamer, just looking
| for something my kids can use. But a coworker did exactly that
| and he raves about the decision.
| shados wrote:
| I bought a GTX 1080 Ti back when they just came out. It was
| absolutely overkill for my needs, but I got it for fun.
|
| I'm kind of glad I did now, since I'm still unable to upgrade.
| The extra oomph is ensuring new games still run decently for a
| bit longer...
| dageshi wrote:
| I don't think it'll ever happen until massive new fab capacity
| comes online at this point.
| throwawayffffas wrote:
| I wonder whether etherium finally moving to proof of stake
| will actually have an impact on gpu prices.
| Bombthecat wrote:
| No, those people will move to a new coin
| MrBoomixer wrote:
| What information do you have to backup that opinion?
| bobsmooth wrote:
| The owners of mining farms aren't going to just toss out
| their gpus.
| muttled wrote:
| As ETH is the biggest ship in the sea by far, they'll
| flood those other coins and subdivide a much smaller
| remaining market.
| gzu wrote:
| No, you don't simply "move to a new coin". ETH is
| currently a 420B market cap and rewards GPU miners
| something on the order of 13,000 ETH a day conservatively
| (without fees). That's nearly 50m dollars a day or 1.5B
| dollars a month!
|
| The only "other coins" available to be mined with GPUs
| are tiny. Ethereum classic has only a 8B market cap,
| Ravencoin with 1B, then many sub 1B coins.
|
| https://www.kryptex.org/en/mining-calculator
| TMWNN wrote:
| (The already high) GPU prices skyrocketed from December to
| about May, then plateaued and even slipped a little because 1.
| crypto prices fell 2. supply improved (obviously connected to
| 1) and 3. new Nvidia cards implemented LHR to discourage
| mining. Recently crypto prices have risen again, and card
| prices have followed. What I'm saying is: You missed your
| chance, relatively speaking.
| sillysaurusx wrote:
| Is this a Submarine, I wonder?
| http://www.paulgraham.com/submarine.html
|
| (Diff with
| https://usatoday30.usatoday.com/money/industries/retail/2004...
| to see some interesting similarities. "Suits are back, and so is
| lumber.")
| steve76 wrote:
| Government hands out free checks.
|
| Criminals use them to buy weapons to kill people.
|
| Their victims flee to the hills and build.
|
| Government stops handing out free checks.
|
| Criminals die.
|
| All that material sits there and rots. We'll pay you if you will
| take it.
| baremetal wrote:
| i quit my software job and bought 20 acres of undeveloped
| farmland. then i got a job on a framing crew so i could learn to
| build my own house. built a polebarn on the land so far. and
| getting ready to dig a foundation probably next year.
|
| its been the most exciting fulfilling adventure of my life so
| far. just got first harvest last month.
| winslow wrote:
| That's pretty awesome. What's going to be your first harvest?
| How industrial are you going with the farming or are you doing
| a greener eco way of farming (no till, no fertilizer, etc)?
| shados wrote:
| My friends and I always joke about quitting our software jobs
| to go work on a farm when things get rough. We're obviously
| just joking (things are never that bad).
|
| But you actually did it and living the meme. Kudos!
| mywittyname wrote:
| I once explained the premise of Stardew Valley* to my partner
| and they just looked at me and said, "that's a little on the
| nose isn't it?"
|
| * You play as a character who quits their software
| engineering job to fix up a run down farm you inherited from
| your grandpa.
| nexuist wrote:
| Wait, you guys are joking? Over in my corner everyone is
| completely serious about it. My girlfriend wants to buy our
| first cow in the next two years. I work fully remote so all I
| need to do is find some land.
| shados wrote:
| I mean, I know one software engineer who has a farm and
| probably could do it if the time was right.
|
| The rest of us would likely poison ourselves, break
| something, or starve if we tried.
|
| Living things are pretty far from my area of expertise, and
| youtube videos only get you so far.
| carabiner wrote:
| How much money did you have saved when you quit?
| nlh wrote:
| Absolutely fantastic. Congrats and enjoy in good health. Are
| you writing about the adventure (or posting photos) anywhere?
| Schiendelman wrote:
| I'm in a software job now, have some land, and I'm considering
| doing the same. Would you be willing to talk about your
| journey? I'd happily come help sometime too!
| mitchell_h wrote:
| I live on >100 acres and maintain a software job. Spend all day
| in front of a computer and all night in the dirt. Only thing we
| grow is a 1/2 acre garden. We stick to live stock. I much
| prefer watching pigs, chickens and cows grow. Feels so much
| more real.
| jmeister wrote:
| Awesome. Best of luck!
| bandyaboot wrote:
| I've been following these prices closely for most of the year and
| what's striking to me is just how wrong nearly all the industry
| experts were throughout the year. I don't recall reading a single
| opinion that was anything other than "prices will remain very
| high for the foreseeable future."
| Bombthecat wrote:
| Really? In germany they expect prices to go up until 2030 and
| then stagnate! Not go down! Stagnate!
| imgabe wrote:
| Nobody has any idea what will happen in 9 years. That is too
| far away of a prediction to have any meaning.
| Bombthecat wrote:
| Well.. You kinda can. Demand and supply, they basically say
| :until 2030 demand will be higher than supply. Germany is
| building way to slow and not enough.
| jcgoette wrote:
| Following this via WSJ:
|
| COMMODITIES
|
| Western Wildfires Lift Lumber Prices
|
| July 22, 2021 04:45 pm ET
|
| Fires are threatening an important swath of the U.S.'s wood
| supply, pinching output that has been under pressure since the
| pandemic touched off homebuying and remodeling booms and sent
| lumber prices soaring.
|
| COMMODITIES
|
| Lumber Prices Are Falling Fast, Turning Hoarders Into Sellers
|
| June 15, 2021 08:29 pm ET
|
| Prices have dropped from record highs spurred by the economic
| reopening, potentially pointing to an eventual return to
| normalcy.
|
| COMMODITIES
|
| Despite Lumber Boom, Few New Sawmills Coming
|
| May 17, 2021 04:49 pm ET
|
| Executives in the cyclical business of sawing logs into lumber
| say they are content to rake in cash while lumber prices are
| sky-high and aren't racing out to build new sawmills.
|
| MARKETS
|
| Lumber Prices Break New Records
|
| May 3, 2021 04:49 pm ET
|
| Home buyers and renters are bearing the brunt of rising wood
| costs, while sawmills are poised for another quarter of big
| profits.
|
| MARKETS
|
| Lumber Prices Notch Records on Building, Remodeling Boom
|
| February 16, 2021 05:17 pm ET
|
| Lumber prices have shot to fresh records, defying the normal
| winter slowdown in wood-product sales in a sign that the
| pandemic building boom is bowling into 2021.
|
| COMMODITIES
|
| Lumber Prices Rise Again
|
| November 20, 2020 04:42 pm ET
|
| Lumber prices are making an unusual late-season climb, thanks
| to builder-friendly autumn weather and suppliers stocking up
| for what they expect to be another big year for home
| construction.
|
| https://www.wsj.com/search?query=Random%20Length%20Lumber
| jandrese wrote:
| Some of the forecasts about high prices forever were just sour
| grapes that their preferred candidate lost an election. You
| always have to take predictions with a grain of salt.
| godelski wrote:
| The only people I saw saying this were the people on mainstream
| news like CNN or Fox (more Fox). But outside that I didn't hear
| anyone. Lumber has been falling since May and lumber futures
| have been going down as well.
|
| Really the only people that were saying that prices would
| remain high had a vested interest in keeping it high. It is
| such an insane position to even take considering that a
| pandemic is a temporary thing. Prices don't just pump like that
| and stay up. I know that there are a lot of people that say
| those kinds of things, but they are fear mongering and trying
| to cause inflation through self fulfilling prophesies.
| refurb wrote:
| Nobody clicks on a news article that says "Lumbar price jump
| 300% but are expected to return to normal by end of year".
| JKCalhoun wrote:
| > The only people I saw saying this were the people on
| mainstream news like CNN or Fox.
|
| :
|
| > Really the only people that were saying that prices would
| remain high had a vested interest in keeping it high.
|
| Not seeing a connection here.
| godelski wrote:
| I really can't tell if this is sarcasm or not but I'll act
| in good faith that it isn't.
|
| Fox has been selling out of control inflation since Obama
| and once Trump came in the story magically disappeared
| (even before Trump took office and could make policy
| decisions) and then after he was gone it reappeared. In
| fact, the stories appeared even before Biden took office.
| Similarly stories about the DOW being all time high
| appeared before Trump took office. As if the DOW or S&P500
| being at an all time high isn't a normal occurrence and the
| index operating like they should but rather that this was
| because of the market "being excited" about a "more
| business friendly president."
|
| Fox wants to sell you that the world is shit when the
| democrats are in office. CNN wants to sell you that the
| world is shit when the republicans are in office. News does
| move markets. Same with presidential tweets.
| specialist wrote:
| Yes and: more generally, biz based on ad revenue
| inevitably resort to fear, outrage, and anxiety to juice
| their numbers.
| refurb wrote:
| Seems like everyone suffers from recency bias - "what has been
| happening for the past few months is how it will be in the
| future".
|
| I remember when gas prices peaked back around 2006 everyone
| said "gas prices will never come down, peak oil, blah, blah". 6
| months later gas prices crashed by 75%.
|
| Keep that in mind when people talk about housing prices or the
| stock market. "It's different this time" is rarely true.
| mywittyname wrote:
| Gasoline is a little different because 2006 was the tail end
| of the Peak Oil era. There was a real fear that production of
| gasoline was going to peak around that time and never
| recover.
|
| Imagine being criticized in 2035 for believing in 2020 that
| climate change was going to permanently change the world.
|
| So that is a fear that I wouldn't call baseless. I don't
| think lay people expected the kind of technical innovation
| that happened in the petroleum industry in the past 15 years.
| kasey_junk wrote:
| Strong disagree. Basically every opinion I read was "Jesus
| defer work until prices stabilize"
| pie42000 wrote:
| Why would they tell the truth? Their job is to sell lumbar...
| Telling people that prices will settle down in 3-6 months is
| literally the opposite of what their job is.
| 542458 wrote:
| I'm not sure if you're referring to economic or lumber experts,
| but the more reputable economists that I saw were mostly saying
| that the price shocks should be transitionary. For example,
| https://mobile.twitter.com/paulkrugman/status/13895559570767...
| godelski wrote:
| This is what I saw too. News networks that want to sell doom
| and gloom (most specifically a certain network we all know
| we're talking about) have "economists" sell doom and gloom in
| ways that don't really make sense. Like never in the history
| of ever has something skyrocketed and then just stayed there
| while the American currency inflates to account for that
| commodity (or even groups of commodities). But that was a
| serious position that I've heard those "economists" say.
| While the mainstream economists were like "just wait it out
| and buy some shorts. This bubble will pop but hard to say
| when." Logically we should expect the latter happen because
| it follows historical trends too. But maybe I'm wrong. I'm
| not an economist. Just someone who listens to them.
| jollybean wrote:
| Prices will remain high for some goods, but the lumber issue
| was a supply chain collusion problem.
|
| I believe that the initial shock of high prices was very good
| for some businesses, and they systematically colluded to sit on
| inventory. You could physically see it in some places.
|
| But those forces are not as strong as supply and demand so it
| came back to something approaching reality.
|
| For electronics parts, the pandemic introduced large numbers of
| speculators who buy and hold parts for gain, those actors
| create an odd dynamic in the system that would do something
| like create higher prices, then crash as prices fall and they
| are forced to sell and the market gets flooded a bit.
| macksd wrote:
| This was the biggest lesson I learned during my first pre-IPO
| quiet period. Seemed like everything I read that was inferring
| things from the S-1 or forecasting the future were immediately
| wrong or turned out to be wrong in the end. I suspect there's a
| lot of the Gell-Mann amnesia effect going on in the economy.
| specialist wrote:
| "Effect" implies a cause. Any guesses?
| macksd wrote:
| I don't think Crichton intended to imply a cause. But I
| guess it's just a bias toward believing the media and
| forgetting the isolated experience. I suppose there's an
| opposite effect at play regarding the media's treatment of
| COVID and recent politics, etc.
| gadders wrote:
| I heard an economist once say that "The best cure for high
| prices is high prices." i.e. - when prices get that high, new
| people enter the market and the price drops. Or people lower
| their prices to try and capture market share.
| titzer wrote:
| Of all branches of mathematics, science, and engineering, the
| only people on Earth stupid enough to believe in perpetual
| exponential growth are economists.
| TMWNN wrote:
| >If something cannot go on forever, it will stop.
|
| --Herbert Stein, economist
| ceejayoz wrote:
| Unless, of course, you've got a monopoly/oligopoly and a
| bunch of barriers to entry.
|
| I'm under little illusion my cell phone bill is ever going to
| go down.
| saul_goodman wrote:
| Someone pointed out some issues with the party line on lumber
| prices earlier this year:
| https://www.zerohedge.com/commodities/what-lumber-shortage-t...
|
| Could just be ordinary conspiracy speak, or maby there's more
| to this story after all.
| ghshephard wrote:
| 100% of the analysts that I read, and, if I'm not mistaken,
| close to 100% of the mill owners recognized that this was a
| temporary blip, and that lumber would fall back into the $500sh
| range (There is a natural floor - that's the price at which BC
| mills no longer make money and start shutting down/curtailing
| capacity.)
|
| None of the mills started expanding or engaging in capital
| programs to try and take advantage of the increased prices.
| renewiltord wrote:
| > _None of the mills started expanding or engaging in capital
| programs to try and take advantage of the increased prices._
|
| Oh, nice call out. I wish there was a way for me to get
| information on stuff like this in general. That is the
| proxies for the future like you say.
|
| Doesn't have to be profitable. It could be stuff everyone
| trading lumber futures already knows. Just for curiosity and
| so I can validate my news sources.
| mrcode007 wrote:
| This is false, the mills were expanding and the increased
| throughout increased supply and prices crashed (along with
| construction work backing out)
|
| https://www.woodworkingnetwork.com/news/canadian-
| news/canada...
|
| This was predictable and extremely profitable trade. I made
| a lot of money this year from this alone.
|
| The price increase was a result of a usual 90 day delivery
| for new contracted lumber and nobody anticipating people
| would actually try to build houses in winter time (which
| they did). A lot of production was wound down and supply
| contracted out in the future was pulled to earlier dates
| leaving future contracted lumber demand unfilled leading to
| price spike and then a crash after extra supply was brought
| online.
|
| All the information is available but you have to pay for
| this. There are companies specializing in getting this info
| for you daily by calling lumber mills.
|
| Fwiw, timber itself is only up about 10% (comparable with
| 2010 prices)
| renewiltord wrote:
| Oh, very interesting. Honestly, I have no problem
| receiving the information after all its trade value is
| exhausted. Not looking to trade in this area. Is expired
| info available for free somewhere?
| mrcode007 wrote:
| Unfortunately a lot of the information never gets
| released after it's usefulness has expired.
|
| On the bright side, a lot of reports are available for
| free from the government sources.
| mettamage wrote:
| > This was predictable and extremely profitable trade. I
| made a lot of money this year from this alone.
|
| If you're up for it could you teach me a bit about this?
| I'm new to commodities (lumber, gold, etc.). My email is
| in my profile.
| MarcelOlsz wrote:
| Mind looping me in as well if you get a response? Profile
| is also in my bio.
| mettamage wrote:
| I'll pass it forward :)
| imtringued wrote:
| > This is false, the mills were expanding and the
| increased throughout increased supply and prices crashed
| (along with construction work backing out)
|
| Yeah and that was obviously the entire idea about the
| trump tariffs. Saw mills in the USA are insufficient,
| that's the point of the tariffs, those jobs are supposed
| to come back when capacity is being increased.
| mrcode007 wrote:
| Those jobs never left. The largest lumber producer in the
| world, from Canada, operates saw mills in the USA. They
| don't pay tariffs on product made in the USA. Side note,
| the tariffs are always paid on import by the importer.
| Not by the exporter. Imposing tariffs on foreign goods
| usually raises prices for the end buyer.
|
| Here is more information including a 7% job growth for
| loggers
|
| https://www.bls.gov/ooh/farming-fishing-and-
| forestry/mobile/...
| bandyaboot wrote:
| That's interesting. The things I was reading before the
| prices started coming down in earnest were all noting what
| you're saying here--that mills weren't expanding capacity.
| But they were using that fact as justification for their
| belief that prices would remain high since there was no
| reason to expect supply pressure to ease.
| BizarroLand wrote:
| They were probably trying to cash in while the market was
| hot, but as in all things, once everyone is doing it its
| not cool anymore.
| bildung wrote:
| _> None of the mills started expanding or engaging in capital
| programs to try and take advantage of the increased prices._
|
| I'm a bit doubtful about this because I know that even German
| mills started to produce lumber with US dimensions, causing
| shortages for metric lumber locally.
| mywittyname wrote:
| Part of the issue was caused by issues getting Canadian
| supplies of lumber into the USA due to a trade dispute.
| It's possible that these German mills are just taking
| advantage of being in a temporarily good trading position,
| with the understanding that cheap Canadian imports will
| retake their market position shortly.
|
| If they thought this was permanent, they would have
| expanded to supply the USA, rather than doing so at the
| expense of domestic production.
| btbuildem wrote:
| Haha, and that was probably some of the straightest, most
| consistent lumber seen in North America in decades
| rootusrootus wrote:
| Don't shop for lumber at Home Depot.
| poetaster wrote:
| German lumber is as badly milled as anywhere. My fortune
| is friends with tools.
| y-c-o-m-b wrote:
| I was also in that camp. I figured it would go the way of
| gasoline where they'd conjure up constant excuses to keep the
| price high almost indefinitely. "A missile landed in the middle
| of a farm in Uzbekistan, we better increase gas price
| $0.50/gallon due to global instability concerns".
| mywittyname wrote:
| It doesn't really work that way with commodities the scale of
| lumber. The amount of money one would to have to corner the
| lumber market is insane, even a cartel probably couldn't pull
| it off.
|
| Timber is abundant and lumber mills are pretty easy to get
| going. If you live anywhere near where timber is grown,
| there's almost certainly a handful of mom-and-pop mills
| around you. The moment prices elevate for an extended period
| of time, these operations will start looking to expand.
| [deleted]
| [deleted]
| TeeMassive wrote:
| Most of these people are "experts" on paper only. They are
| authoritative voices hired by big actors who have a stake into
| making people believe that the prices will not go down. The
| same thing is happening for housing, crypto and meme stocks.
| throwaway0a5e wrote:
| >I don't recall reading a single opinion that was anything
| other than "prices will remain very high for the foreseeable
| future."
|
| Are we talking about heads on CNBC or the guys who were
| actually able to put eyes on the mills, rail yards and whatnot?
| Because this crash is spot on with what the latter was
| predicting. Everyone was over-producing to get in on high
| prices and the demand just wasn't there.
| pfdietz wrote:
| Lumber is well above where it was for all of 2019, pre-pandemic.
|
| https://www.nasdaq.com/market-activity/commodities/lbs
| betwixthewires wrote:
| This is wonderful. I can't wait for house prices to follow.
| cryptoquick wrote:
| > "Builders still have to clear their inventories of having
| purchased higher-priced lumber. It takes a while to clear the
| system," Lee said. "Yes, lumber prices from the mills came down
| dramatically over the summer, but that's unfortunately taken a
| while to reach the rest of the industry and consumers."
|
| > Lee said when it comes to new home construction, pricing is
| being complicated by ongoing pandemic-related supply chain
| challenges. While difficulties related to lumber have eased, home
| builders are still dealing with delivery delays and price
| inflation on everything from plumbing and electrical products to
| kitchen cabinetry.
|
| > "It doesn't compare to the three to five times price increases
| we saw with lumber, but I'd say on average, we're seeing 10 per
| cent increases on everything, including the kitchen sink," Lee
| said. "And we are still seeing delays on closings, just because
| of an inability to get products and materials."
|
| Meanwhile... August 27th, 2021:
|
| > "...households, businesses and market participants also believe
| that current high inflation readings are likely to prove
| transitory," Powell said.
|
| https://www.reuters.com/business/why-fed-chair-powell-still-...
|
| Sigh.
|
| Nobody believes that, Jerome. Nobody really believes that.
| blitzar wrote:
| I believe it. I am actually more worried about a deflationary
| spiral and an actual depression when the covid punch bowl gets
| taken away than moon growth for ever.
|
| Things were shitty before covid happened, and many were
| expecting a recesion in 2020 before covid existed, markets
| siezed up late q3 19, and needed help then. The world has since
| been living on vast quantities of high grade heroin dished out
| all over the world, quite rightly by various central banks.
|
| Only once the covid tide goes out we will see who has been
| swimming naked.
| lotsofpulp wrote:
| Why would they US government not be able to print its way
| out? I assume the US will be able to as long as it has the
| preeminent military and a stable society and court system,
| with relatively high levels of trust compared to other
| countries.
|
| If another similar size country becomes a more stable option,
| then I would be worried.
| blitzar wrote:
| Recesssions and depressions cant happen because the US can
| print money? Tell that to the history books. While you are
| there take a look at what causes an economic turndown, it
| tends to come on the back of massive spending, printing
| money, juiced growth and wars.
| modo_mario wrote:
| > wars
|
| I'd sadly say the US has (like any empire before it) used
| wars and similar methods to achieve the opposite. Not
| always effectively but still.
|
| Check a lot of countries in the world peg to the dollar
| even when it doesn't seem economically sensible. Remember
| when Japan in the 80's was forced to do technology
| transfers to the US, import minimum quotas of US tech and
| limit it's exports whilst adjusting their monetary policy
| to help out the US leading to a crash that preceded the
| lost decade?
|
| It's not because they loved the US so much that they did
| such things.
| lotsofpulp wrote:
| Politically, I do not think the US will let a
| deflationary spiral happen as long as it can print money.
| Sufficient portions of the population are fully invested
| in the equities market, and I expect the US to pull out
| all the stops to prop up their prices. They might take a
| hit for a couple years (although I bet even that seems
| politically unacceptable), but on a timeframe of more
| than a few years, I expect the US government to keep
| inflating, assuming they are able to per the conditions
| in my previous comment.
| christophilus wrote:
| I believe it. By "transitory", he doesn't mean "heading back to
| 2019 prices". He means, "no longer inflating at these rates".
| Thats almost certainly true.
|
| The "Making Sense" podcast [0] covers the deflation / inflation
| debate in detail and is a great listen.
|
| [0] https://podcasts.apple.com/us/podcast/making-
| sense/id1506469...
| [deleted]
| DeWilde wrote:
| Are houses in the US solely built using lumber/wood or do they
| have brick walls and concrete floors like here in Europe?
| orthoxerox wrote:
| Where does insulation go in a brick single-family home?
| noneeeed wrote:
| New homes, certainly in the UK are double-skinned with
| insulation between the layers. In the past most were double-
| brick, but some combination of brick and timber has become
| common.
| DeWilde wrote:
| On the facade, that is between the facade and the bricks
| there is a layer of styroform and other insulations.
| modo_mario wrote:
| Depends. I've seen renovations with it between the double
| brick wall, on the outside or the inside.
| karamanolev wrote:
| As a European having lived in the US, brick walls and concrete
| floors are definitely a way rarer find than in Europe. Even
| some single-floor multi-apartment complexes are entirely
| wooden. The typical motel from American movies, but instead
| residential, is also almost entirely wooden.
| reissbaker wrote:
| Very much depends. The foundation is always concrete, although
| for single-family or duplex homes the _floor_ being concrete
| would pretty non-standard (that 's usually wood, tile, or faux-
| wood e.g. vinyl, laminate). The framing is generally lumber.
| The exterior siding can come in any number of forms: stucco,
| wood, metal, vinyl, brick, etc. Brick in particular is rare on
| the west coast, FWIW, due to seismic conditions, but is much
| more common in the east.
| dudul wrote:
| It depends on the area. And it applies to Europe too. Plenty of
| areas where wood frames are more common.
| DeWilde wrote:
| I live in south-eastern Europe and almost all houses are
| brick. Only smaller buildings in the yard are built from wood
| but sometimes even they are made with bricks.
| paulpauper wrote:
| This is why commodities make poor investments. As prices go up,
| so does supply and demand for alternatives.
| rfrey wrote:
| 100%. Commodities are for producers, consumers, and
| speculators.
| JKCalhoun wrote:
| A little like the lesson the Hunt brothers learned regarding
| silver.
| mgkimsal wrote:
| "If high prices held you back from building, you are in luck, as
| the tables have now turned"
|
| Except... many builders will find some other reason/excuse where
| prices are high to keep prices high. We were looking at building
| a house - talked to builder last November and... looking at
| $470-$480k range (ballpark estimate). Lumber was going higher,
| but we'd reduced the house plan size. Lumber kept going up... and
| up... Then... no parts were available (IIRC certain trusses were
| unavailable for months, that's just one that stuck out).
|
| We regrouped a bit later. House was now going to be min $620k,
| but... no guarantee it would be $650k or $700k. Builder has been
| working on spec homes in the $700k-$900k range last few months,
| whereas exact same size houses 1 block away they were building
| and selling in the mid-$400s 14 months ago.
|
| Before we cancelled the project, we asked why we couldn't build
| something smaller and target a time in a few months, as lumber
| was coming way down to where it was 18 months ago. "Everything
| else has skyrocketed..." which... I know things have gone up some
| in the last 18 months, but I think there's simply some "get high
| prices while you can".
|
| When talking to some home finance folks, they're all saying
| "watch out for HELOCs in 18-24 months - people will be clamoring
| for HELOCs as they won't be able to sell these $700k houses
| they're buying, because they won't have appreciated at all, and
| the homeowners will be trapped".
|
| There may be 'blowout' prices on lumber itself, but around here
| I'm not seeing any 'blowout' prices on new construction in the
| short term.
| hellbannedguy wrote:
| I would wait. I'm an licensed inactive General Contractor.
|
| If 14 months ago, they were building them for $450,000, I'd
| wait.
|
| I'd shop around for another contractor too. A young guy
| starting out, might save you a lot. (There's no way to verify
| he knows what he's doing though.)
|
| If you are some what handy, it's not that difficult to owner
| build your own house. That is if you get the blueprints past
| the town's council. Getting approvals is the tough part.
|
| If you get all the town, county, approvals, and have a very
| buildable lot (flat, no flooding, etc.). Once the foundation is
| poured, it step by step, and done.
|
| (If you decide to build yourself, don't make any changes. Don't
| build a custom house either. A simple home will make the
| process go smoothly. Realize too, the General Contractor just
| hires licensed subs, and takes a healthy cut off your nut. Then
| again--if you have never done construction yourself, disregard
| everything I said. I just pictured a typical computer developer
| in a wet lot, with an unhappy wife. Muttering to Google
| translate to communicate with the unlicensed, unbonded,
| subcontractor.)
| karolist wrote:
| I know a person who built his aerated concrete house working
| a day job over 3 years, he did 98% of the tasks himself and
| probably 95% of those alone whilst maintaining a full-time
| day job. He has a non-english blog with many pictures and
| process documentation and was a huge inspiration to me whilst
| I DIY'd my new 2 bdr apartment from this
| https://imgur.com/a/UXfmx0Y to this
| https://imgur.com/a/vGntuhJ in the span of 6 months and a day
| job doing everything myself (all the furniture, electricity,
| kitchen installation, etc etc). I have many pictures but
| never bothered to post them up. When you do things yourself
| you can take your time and do things like this
| https://imgur.com/a/8cd1iHO with the tiles, everyone said
| it's impossible to do this connection with a laminated floor
| but I figured it out and it's holding great (took me 4
| evenings to make the cuts, pour out epoxy basin to "catch"
| the heights etc).
|
| I guess my point is, if you're interested in DIY it's ...
| doable, YouTube can be a great help depending on your region.
| I'm an ISTP in the Myer-Briggs scale and don't get bored
| digging into little details as I assume many people on this
| site. 3 years in no failures in anything I've did, people who
| hired regularly posted cracked corners, even ceilings in the
| local facebook group.
| datavirtue wrote:
| YouTube...essential craftsman. Builds a spec house and
| explains every detail from lot prep to selling it. Huge
| video series. I watched the whole thing and it reminded me
| of the craftsman I worked with as I was growing up.
| quercusa wrote:
| Essential Craftsman _How to Build a House_ :
| https://essentialcraftsman.com/houebuild
|
| Great material and a real example of true craftsmanship.
| Highly recommended!
| xyzzyz wrote:
| He does open house tomorrow/Saturday, so if you live in
| driving distance to Roseburg, and want to see the
| house/shake his hand, it's a pretty unique opportunity.
| dubberx wrote:
| Would you consider sharing an url to the blog you
| mentioned? Planning to DIY myself a tinyhouse so I'd love
| to read a blog like that.
|
| (Contact info in my profile if you don't want to post it
| publicly)
| karolist wrote:
| irnamas.blogspot.com, should be readable with a
| translator to English, I suggest reading it like a book,
| from the first posts!
| orthoxerox wrote:
| Masonry is usually harder than framing, especially when
| you live in the US where framing is overwhelmingly more
| popular. You can get pre-cut studs for your preferred
| ceiling height; OSB, housewrap, insulation, windows all
| match standard frame dimensions; roof trusses are common
| and affordable; renting a nailer and a miter saw is easy.
|
| I don't know if it's the same guy, but I watched videos
| of a guy laying aerated concrete blocks himself and it's
| much more work: you need a good supplier of blocks with
| good dimenions, you still have to rasp down and sand down
| the tops of each row so they form a perfectly horizontal
| plane for the next row or the glue won't catch, door and
| window gaps are tricky and upper floors are even trickier
| if you want to use aerated concrete for the
| floor/ceiling.
| karolist wrote:
| I think you've hit the nail on the head recognising it's
| very location dependent. In Northern EU, if I built a
| house alone or with little help I'd definitely go for AAC
| (autoclaved aerated concrete) blocks. They are relatively
| cheap, light weight so easy to handle and you can have a
| less "serious" foundation for them as opposed to silica
| blocks, if you buy from Aeroc or some other known company
| the dimensions will be spot on. You make cuts using a
| special saw (https://www.toolstation.com/irwin-concrete-
| hardpoint-saw/p43...) and you don't need a concrete mixer
| on the plot as these can be glued together, so basically
| you don't need water and electricity on your land and can
| transport the tools in and out in your wagon/pickup every
| day. In addition you can grind away imperfections, even
| cut new doors and windows later because the material
| allows for it. The downsides are poor sound insulation
| and needing special anchors for hanging stuff. It's also
| very easy to make grooves for wiring and pipes, which
| again, can be done alone and without electricity
| https://i2.wp.com/elektroznatok.ru/wp-
| content/uploads/2017/0...
|
| Expertise required is getting the corners up precisely
| and being able to use a laser level and a string. You
| don't make ceilings/floors from these, the best option
| for multi-story house would be to have the floors done
| from a pre-fabricated concrete blocks which a crane would
| put on your walls
| https://baltparma.lt/39-large_default/perdangos-plokstes-
| pk...., this will give very stable floor. On the other
| hand, in US there's lots of framing expertise as you're
| saying and the options I've laid out are probably not as
| accessible.
| clairity wrote:
| > "If you are some what handy, it's not that difficult to
| owner build your own house."
|
| but without any experience (which is ~99% of us, even if
| handy), it _is_ difficult to know how to build a house both
| efficiently (tools, techniques, sequencing, etc.) while
| meeting regulatory and bioenvironmental goals (airflow, water
| control, power, waste, etc.), because it 's a whole glut of
| little things to know, most of which are not "hard" by
| themselves but overwhelming in totality.
|
| for the inexperienced, i'd heartily recommend volunteering
| for habitat for humanity (at least a half-day weekly, more
| the better) and asking lots of questions of the experienced
| workers there to learn those little things (esp. the locale-
| dependent stuff) while networking with them to boot.
| anonuser123456 wrote:
| >Don't build a custom house either. A simple home will make
| the process go smoothly.
|
| I don't get why simplicity isn't more of a thing. Complexity
| is just asking for extra maintenance and the very high
| likelihood of something being done wrong.
| ryanackley wrote:
| The biggest problem with being an owner builder is you don't
| have an ongoing relationship with sub-contractors. Which
| means that for any subs you hire, you will be their lowest
| priority and their smallest concern. Also, you don't really
| know what you're doing so you will think they made a mistake
| when they didn't and you won't always recognize real
| mistakes.
|
| I did this for my new house that was being built before,
| during, and after the peak of the pandemic. I wouldn't do it
| again. We're moved in now and we find small mistakes all the
| time that an experienced contractor would have easily spotted
| during construction. It makes me wonder what we can't see. Oh
| and it's impossible to get the subs back out to fix the
| problems because they have all their money at this point.
| wycy wrote:
| Properly waterproofing the shower is a major one that can
| be easily overlooked and won't typically manifest in a
| major way until years down the road. Hope your contractors
| used appropriate waterproof Kerdi board or cement board +
| roll-on membrane.
| sizzle wrote:
| Absolutely, make sure they put that red stuff over the
| cement board if you go that route to seal it up and
| prevent mold growth.
| katzgrau wrote:
| It's a good idea to hire a retired contractor or home
| inspector to check work quality throughout the project.
| It's extra expense but serves as insurance.
|
| Just having someone will keep the GC (and usually the subs)
| honest most of the time. And it's super valuable when you
| have someone knowledgeable to go to bat for you if needed.
|
| I recently did a remodel with a well regarded GC in my
| area, but still had an outside person to inspect for me.
| Saved me a lot of time/headaches, and probably only spent a
| few thousand extra
| baremetal wrote:
| there is no perfection in home building. there are errors
| that the owner can see, and errors he cant see. the idea is
| to ensure all errors are in camp 2.
|
| note: i got a job on a framing crew so i could learn to
| build my own house.
| j2bax wrote:
| My friend had a house built by a company and he had many
| issues left over even after getting all the issues he
| noticed taken care of. I just had a full house remodel done
| by a good friend who is a contractor and am noticing things
| that aren't perfect. I guess I'm just wanting to point out
| that my experience is that getting perfection is hard no
| matter which route you take.
| mohaine wrote:
| This. Contractors _mostly_ only care about things that
| will require rework. Anything that is cheaper to hide and
| will not be a problem for years if ever will just be
| hidden.
| darkarmani wrote:
| > Realize too, the General Contractor just hires licensed
| subs, and takes a healthy cut off your nut.
|
| Yeah, but the GC also has all of the good subs. The good subs
| all have work with GCs -- what normal people can pick up are
| the "left overs" (not every "left over" is terrible, but
| probability is high).
| dougmwne wrote:
| My stepdad was a software engineer and built our house
| growing up. The house was fabulous. The construction took 15
| years of hard labor as a full time second job.
| throwaway984393 wrote:
| I'm picturing a web developer in 2023 wondering why
| everything is slightly tilted in his DIY house even though he
| used the poured slab as reference
| spiderfarmer wrote:
| I was a web developer in 2019 building my own office and it
| never collapsed even once.
| headmelted wrote:
| If you _were_ a web developer in 2019 building your own
| office that never collapsed I have to assume that 's only
| up until the last thing you can remember.
|
| May you rest in peace.
| hutzlibu wrote:
| 2 years uptime without major technology change, is quite
| amazing in the modern fast paced web dev world ..
| TeMPOraL wrote:
| They said they were _building_ it. Not that they
| _completed_ it.
|
| I'm guessing they just left the industry to do something
| less mentally damaging than web development - perhaps
| started a spider farm or something.
| donjoe wrote:
| Well, u can always transform: rotate(Xdeg) in the end ;-)
| TeMPOraL wrote:
| "You asked about that stick by the side of the house?
| Yes, it applies a _style_ to the house, keeping it
| straight. No, don 't pull it out! Consequences will be...
| cascading!"
|
| (I'll see myself out)
| klondike_klive wrote:
| And Ctrl-Z if you don't like the results.
| beowulfey wrote:
| I don't have extensive DIY experience and this joke is
| sadly lost on me. Why does the slab not work as a
| reference?
| bluGill wrote:
| Because slabs are never level or flat. The framers always
| start with a level and cut to fit that first wall.
|
| Block is generally level, but if they pour it, they don't
| get very close
| edrxty wrote:
| Assuming you are very mechanically inclined but not
| particularly well versed to traditional construction, what
| does one do to learn more about this process?
| RNCTX wrote:
| Modern Practical Joinery, by George Ellis (circa 1910).
|
| Neither modern, nor practical, but it has excellent
| drawings on how to build everything in a house out of wood
| and nails.
|
| Decades of FPL.gov data on lumber species pretty much agree
| with his assessments from the 19th century as well.
| throwaway316943 wrote:
| Build a shed first. There are lots of free designs online.
| Choose one with a window so you'll know how to frame
| openings and fit windows and doors. Put the type of siding
| you'd want for the house on it.
|
| Then build a detached garage, get experience with pouring a
| slab, attaching walls to a foundation, trusses, more
| practice with exterior doors and windows, insulation,
| wiring. If you're really feeling confident you could put a
| half bath in it to practice plumbing.
|
| You should be ready for the house at this point. You'll
| either love it or hate it so much you'll just hire someone
| to do it for you. Having a shed and garage on site is a big
| plus for building a house since it gives you a warm dry
| place to work and store your tools. I've known people who
| built their garage first so they could live out of it while
| building the house, only works if you're a bachelor though.
| saalweachter wrote:
| For TV viewing, try to watch the "fixing the stuff that
| went wrong" style TV/YouTube shows, where a builder is
| going around going, "Oh god, you can't do that that way,
| do that this way".
|
| Part of learning is learning from mistakes -- you learn
| which parts of the "correct" way to do something are
| essential, and you learn _why_ the correct way is
| correct, when the incorrect way fails. Ideally, that 's
| the part you want to outsource as much as possible; if
| you were working with an experienced builder, they'd be
| correcting you constantly to keep the mistakes from
| affecting the build, but hopefully YouTube can at least
| show you the big "don't"s.
|
| Pro-tip: most fasteners (nails and screws) are not
| "structural"; they hold wood in place, but they don't
| support weight. That's why eg windows are framed the way
| they are, instead of just nailing a 2x4 between two
| others; it allows each piece of wood to be supported
| directly by another.
| abledon wrote:
| whats your best youtube channel recommendations for
| "stuff went wrong" style construction learning
| saalweachter wrote:
| I don't have a good playlist or show to link off-hand,
| but here's a wonderful video about someone finding
| terrible things in their old house:
| https://www.youtube.com/watch?v=_v33Gb2xPhU
|
| In general you want "fixing old houses" videos that focus
| more on the tear down and guts and less on the "look how
| pretty my house looks at the end" before & afters.
| etskinner wrote:
| Matt Risinger on youtube has some good ones. Most of his
| videos also have comparisons of construction methods,
| too. New vs. old, expensive vs. cheap. Other videos have
| some 'best practices'.
|
| Here's one about corners some contractors often cut: 10
| DUMB (and Common) Building Practices
| https://www.youtube.com/watch?v=LuUxUt6MwIU
|
| Here's another about his regrets about how he remodeled
| his own house:
| https://www.youtube.com/watch?v=4HYROAFgp7Y
| rascul wrote:
| > Pro-tip: most fasteners (nails and screws) are not
| "structural"; they hold wood in place, but they don't
| support weight. That's why eg windows are framed the way
| they are, instead of just nailing a 2x4 between two
| others; it allows each piece of wood to be supported
| directly by another.
|
| Very good tip. So very often I see decks (for example)
| built improperly, relying on non structural fasteners to
| hold it all together. This kind of stuff tends to fail in
| a number of years. I've seen a few collapsed porch roofs
| for the same reasons. Make sure your fasteners are rated
| for how they're used. A general rule of thumb is that
| wood sits on wood, not attached to the side.
| stadium wrote:
| I found this book to be extremely insightful on the process
| and pitfalls. Communication in writing and being specific
| about grading specs for various finishes was one of my big
| takeaways. There's a lot more to it though. Having an
| architect act as an independent PM may be a good idea too
| if you forgoe a GC.
|
| That said, I didn't follow through yet and haven't built
| anything myself. Even if you do use a GC it's still a great
| read.
|
| https://www.buildwise.org/review-what-your-contractor-
| cant-t...
|
| Edit: I did get as far as talking to my go-to mortgage
| banker about construction financing, and learned that self-
| GC'd projects are pretty much not finance-able through
| traditional paths. Many of these projects end up
| unfinished, with the GC-owner running out of money. And
| with no certificate of occupancy they can't be easily sold
| or refinanced.
| lbriner wrote:
| Having an architect can be helpful but it can also be
| significantly more expensive and if there is a problem,
| then you are likely to be pulled into the argument
| anyway.
|
| Definitely communication, good diagrams, developing a
| good rappour with the contractor and not being overly
| tight or strict with them otherwise you can build
| resentment. For example, don't withhold all of their
| expected money because of a single piece of dodgy
| drywall, give them most or all of the money and make sure
| they make-good first thing next week.
| throwaway984393 wrote:
| Spend 3 months watching YouTube, you'll probably learn more
| tips than many contractors know. Then 3 months practicing
| small mock-ups - building forms, frames, stairs, windows,
| roofs, installing insulation, vapor barriers, sheeting,
| drywall. A fancy shed isn't a bad place to start.
|
| Plan on hiring a plumber, electrician, and HVAC specialist.
| Probably another 3-6 months to figure out all the
| paperwork.
| otikik wrote:
| The channel "Essential Craftsman" is finishing building a
| spec house. It's an American-style house, with timber
| framing. The host, Scott Wadsworth, knows a lot about
| contracting, and gives a lot of details and advice.
|
| The playlist currently has 126 videos. It's here:
| https://www.youtube.com/watch?v=AGCC-
| _Cuhhw&list=PLRZePj70B4...
|
| My impression after watching most of it: It might be
| "easy" to build your own house once you are an
| experienced contractor. If that's not you, then it's
| going to be a second job, or even a third job (building
| _and_ learning). You will need to hire and manage
| subcontractors - the kind of job the contractor does. If
| you like that sort of thing and that 's how you want to
| spend your time, go for it. I personally think that my
| time would be better spent finding a better job in tech
| and getting a promotion, so I can hire a professional to
| do all that.
| d0gsg0w00f wrote:
| As a former builder and current handyman (now cloud
| architect) I can wholeheartedly recommend this channel.
| That guy knows his stuff. My only warning is that he's a
| perfectionist and purest. If you do things his way
| without any experience it will take you 10x as long.
| Steltek wrote:
| Is he really though? His non-spec-house videos talk about
| allowable tolerances and he free hands beveled cuts on a
| Skilsaw. Granted, those free hand cuts look better than
| my 90deg ones done with a saw guide but still, would a
| "perfectionist" do that? I'm specifically thinking of
| that weird looking shed video.
|
| I think he only really goes over the top with concrete.
| d0gsg0w00f wrote:
| Framing he's not too bad but I was cringing watching him
| perfect the sill anchor bolt placement on the spec house.
|
| His finish work is finicky. I'm thinking of those
| craftsman columns on the spec house. Most people would
| just caulk and be happy with it.
| Igelau wrote:
| > 3 months practicing small mock-ups
|
| Each mock-up slightly bigger than the last, until one
| day...
| orthoxerox wrote:
| If you make each mock-up twice as big you'll spend at
| most double the amount.
| orthoxerox wrote:
| I really liked Canada mortgage and housing corporation
| abridged building code: https://chbanl.ca/wp-
| content/uploads/CMHC-Canadian-Wood-Fram...
| nradov wrote:
| My father mostly built the house I grew up in. He was
| mechanically inclined and a skilled woodworker but had no
| construction experience. So he took a series of residential
| construction courses at the local community college.
|
| https://success.cabrillo.edu/Student/Courses/Search?subject
| s...
| octopoc wrote:
| If I may ask, what are your thoughts on BuildZoom? If I go
| through them can I be more certain about quality work?
|
| I have heard many horror stories of people who had houses
| built and the builders made terrible mistakes. The person
| having the house built had to micromanage them and kept
| finding bad mistakes, like "forgetting" to put insulation in
| walls before the drywall, putting a window in the wrong spot,
| or putting crawlspace pillar supports in the wrong area.
|
| I feel like right now the most reliable way to make sure my
| house gets built right is live nearby and check on it every
| day. Is there a better way?
| satya71 wrote:
| Unconventional, a St Louis entrepreneur built a container
| house. Few things to go wrong there.
| orthoxerox wrote:
| Works if you like narrow rooms smelling like an old
| fridge.
| okuboheavy wrote:
| Unfortunately a container house will always end up both
| more expensive and worse than a traditionally built
| house. Containers are fantastic as containers but
| terrible for making a house with. As soon as you start
| cutting holes in them they lose a great deal of their
| structural strength which is their main advantage.
| Terrible to insulate and for condensation as well. The
| exception is if you're happy with a single container with
| no additional holes and only the doors for access and
| windows and you live in a very low humidity environment.
| at-fates-hands wrote:
| >> Unfortunately a container house will always end up
| both more expensive and worse than a traditionally built
| house.
|
| I remember when this became popular and also remember
| plenty of articles deriding the fact by architects and
| engineers both agreeing this was an incredibly poor idea
| for a number of reasons.
|
| You'd be a thousand times better off just hiring an
| architect and doing a prefab or modular home.
| Hendrikto wrote:
| Could you elaborate on the high prices?
|
| I have a friend who plans on building a container house,
| and who is convinced that it will be much cheaper than a
| traditional house. Note that we live in Europe, where
| homes are build from stone and concrete, not wood and
| cardboard.
| pjc50 wrote:
| You can build a wooden house in Europe as well, it's just
| not cheap, e.g. https://scotframe.co.uk/ : not only is
| the timber more expensive than the US, the main challenge
| is getting land and planning permission.
|
| I've no idea what permissions you'd need for a container
| house.
| okuboheavy wrote:
| You can build a container house that's cheap but it won't
| be nice. You can build a container house that is nice but
| it won't be cheap. I spent a very long time looking into
| this as I really wanted to have a container house.
| Unfortunately the more research I did the more I realised
| what a bad idea it was. A container is great because you
| have a basic structure and it's watertight from day one.
| However, getting to that point with a regular build is
| actually pretty straightforward. Everything past that
| point though is a massive pain in the ass when you're
| drilling or cutting into corten steel. Adding insulation,
| windows, electrical fittings, everything else ends up
| being a pain and/or 3 times more expensive and/or 3 times
| more time consuming. It gets to the point where you
| basically just building a regular house inside the
| container anyway and you realize that you just don't need
| the container in the first place. As I said before there
| are really specific instances where it makes sense but if
| you look at all the container houses that look really
| nice, the build cost is always insanely expensive. Often
| two or three times the cost of an equivalent regular
| house.
| pasabagi wrote:
| It depends, actually. Container prices are very volatile.
| If you're in the middle of a crash, a container house can
| be cheap. GP was correct however in pointing out they
| aren't particularly good for building houses that are
| actually nice to live in.
|
| EDIT: There's a caveat here. Because containers are
| trivially transportable, you have lots of options when it
| comes to assembling off-site that could be kind of nice.
| For instance, if you were a carpenter with a nice
| workshop, and wanted to fit out your house in your shop
| instead of in a muddy building site, it's kind of cool
| that you can do all the fitting, then put the parts on a
| truck. This would also be cheaper. If I was self-
| building, this would be a big consideration for me,
| because it's not actually very nice working in a building
| site, and it's not particularly efficient either.
| bluGill wrote:
| You can buy a manufactured home if you want the factory.
| They are cheaper, but mostly because they don't allow any
| customization.
| atombender wrote:
| Grand Designs has an episode featuring a container house
| build. I recommend showing it your friend, as there might
| be a few things to learn.
|
| As I recall, the biggest challenge was cutting out the
| sides while maintaining structural integrity. They ended
| up having to do a lot of complicated stuff to make it
| structurally sound, nearly negating the benefits of using
| containers in the first place.
|
| But it looks great. I think the episode is on Netflix.
| Here [1] is an article with photos and a ten-minute clip
| from the episode.
|
| [1] https://metalbuildinghomes.org/grand-designs-
| shipping-contai...
| RNCTX wrote:
| > check on it every day
|
| you got it.
|
| > Is there a better way?
|
| no.
| bredren wrote:
| This is also how you ensure software projects you
| contract out are being built "right."
| lbriner wrote:
| It is hard since even experienced and capable builders
| might still take you for a ride. In the UK, plumbers are
| notorious for not turning up to jobs and not even calling
| etc. Those that know what they are doing are also prone
| to inflate a quote to someone they think can afford it.
|
| The other problem in the UK is there is no formal
| registry for a "builder" as opposed to plumbers,
| electricians and even window fitters that have to be
| registered.
|
| There is definitely a need for good people skills
| (passive aggressive doesn't work on the building site)
| and being clear up-front. You also need to try and avoid
| over-reliance on one person/company, you don't want
| everything stopping because the electrician cancelled on
| you.
| orthoxerox wrote:
| > There is definitely a need for good people skills
| (passive aggressive doesn't work on the building site)
| and being clear up-front.
|
| You don't even need good people skills, just being
| aggressive works, but you do have to be clear up-front:
| "stop right now, I am sure you fucked up this part:
| either prove to me I am wrong or redo it ASAP or I am not
| paying you for this" works much better than rolling out a
| list of complaints when they present the final bill.
| gjvc wrote:
| > The other problem in the UK is there is no formal
| registry for a "builder" as opposed to plumbers,
| electricians and even window fitters that have to be
| registered.
|
| In the UK, electricians do not have to be registered.
| CraigJPerry wrote:
| I always understood electricians did have to be
| registered and qualified
| https://www.competentperson.co.uk/
|
| But I don't know for sure.
| dagw wrote:
| My understanding is that anybody can do any type of
| electrical work (in homes), but certain type of
| electrical work needs to be certified. If your
| electrician isn't certified then a third party certifier
| has to certify the work after completion.
| gambiting wrote:
| >>If your electrician isn't certified then a third party
| certifier has to certify the work after completion.
|
| Even that has been outlawed sadly. You can't fit your own
| fuse board and get an electrician to just sign off on it
| anymore - there might be people who still do it and give
| you a document saying they've done the installation, but
| in general it's not a thing anymore.
|
| Of course absolutely nothing stops you from doing it
| anyway, then having a general electrical inspection done.
| If anyone asks just say it was like that when you bought
| the house already.
| lotsofpulp wrote:
| It is the same in the US. The actual labor can be done by
| anyone, but a licensed electrician has to be willing to
| accept liability for it.
|
| It is quite a racket in some towns, as some electricians
| will have an "expedited" relationship with the town's
| inspectors, so you basically have to hire certain
| electricians if you want your project to move along
| smoothly. The electrician will come by and walk through
| for 5 min glancing here and there and sign the paper for
| $10k or $20k or $30k depending on size of the project.
| chasd00 wrote:
| Architects are the same way, a couple draftsmen to all
| the design and construction documents. Then, while on the
| way out the door to lunch, the architect gets their stamp
| and a sharpie out.
| NordSteve wrote:
| Not true everywhere in the US, this sort of thing is
| regulated at the state level.
|
| Where I live, a homeowner is allowed to do their own
| electrical work. Must be permitted and inspected, though.
| When I've done big projects in the past, I've asked the
| inspector out at the start to ask for their advice --
| gotten really good info that way.
| PaulDavisThe1st wrote:
| Here in NM, you can do your own electrical work, but you
| have to pass an exam first. The exam is non-trivial.
|
| There's a separate exam for solar installs. I took and
| passed that, but given that it is open book (you get the
| NEC book) and covers "only 3 sections of the NEC"), it
| was suprisingly hard.
| sneak wrote:
| I imagine the better way is to hire an experienced GC to go
| and check on it every day for you. It's only "better" in
| terms of time (and perhaps experience), though.
| sgt101 wrote:
| I think that this is the way to go because it's really
| hard to catch all of the things that can go on on site if
| you're not a professional. I built (ok got fellas in to
| build) an extension many years ago and I didn't catch
| that the drainage was inadequate until after they had
| completed and left - so I had to get that done separately
| and it wasn't cheap. Every builder I've talked to since
| has given me the impression that they would have spotted
| this upfront, and I think I believe them.
| the-dude wrote:
| > that they would have spotted this upfront
|
| Of course they say that. What would you think if they
| said the opposite?
| Spare_account wrote:
| > _What would you think if they said the opposite?_
|
| Not the same guy, but I might start to trust them more
| sgt101 wrote:
| I get the point(s) here, but I think that my error was
| very much a rookies, and that one of the first things
| that good builders think is "where is the water going"?
| toast0 wrote:
| > I imagine the better way is to hire an experienced GC
| to go and check on it every day for you.
|
| Going every day is how you check the GCs work. A good GC
| should probably tell you the days where it's more
| important for you to come and check and what you should
| be looking for, but being there to notice things and ask
| questions helps keep things on track.
| plater wrote:
| Someone I know who had their house built took pictures of
| the construction site every day.
|
| That way, if an issue turned up later, he could prove by
| showing the pics that they forgot to do something or did it
| in the wrong way.
| datavirtue wrote:
| Then it's too late. Code requirements would prevent all
| of this. Requiring county inspection to certify
| insulation install (presence, no gaps) and thickness
| (R-value) with a post-install test. All of that would
| increase costs and build time though.
| bluGill wrote:
| If you do something wrong you need to correct it at your
| cost, including everything. I've been in framing before
| and called to move a joist that we put right where the
| toilet pipe had to be. We moved it, but it was a lot of
| work to cut all the glue and get it in the place it
| should have been. (normally joists are a fixed distance
| apart, but we are supposed to verify on the print before
| hand that the toilet or other pipe won't land on one). At
| least the plumber called us - he would be in his right to
| just cut the joist, and then we would have to fix it
| after the house failed the final inspection.
|
| Contractors try to look after each other. Most know
| enough about other trades to stop and say "this isn't
| right, are you sure you want me to continue" if someone
| else did something wrong. But everyone once in a while
| this fails.
| datavirtue wrote:
| People don't forget to do that stuff. Drywaller shows up
| with crew. Insulation is not in. A lot of people just shrug
| and install the drywall. Maybe they are in a good mood and
| have another job close by that they can go to after
| informing the GC about the insulation. My money is on them
| just throwing up the drywall. Imagine the "bastard operator
| from hell" and you will have a good feel for how they view
| you and your house...typically. There are some craftsman
| out there but good luck finding them.
| titzer wrote:
| > If you are some what handy, it's not that difficult to
| owner build your own house.
|
| I'm not sure what you have in mind here, but my brother did
| an "owner build" in the true sense of the word and sunk every
| nail into every piece of wood, every pipe, every wire, every
| window, floor, staircase, insulation, lighting, built all the
| cabinets, everything. That was 8 years of his life. Two of
| those years he literally quit his job and worked on it _full
| time_.
|
| Caution, it is easy to _seriously_ underestimate how much
| work it is to build a house. It could stretch on for _years_.
| Not to mention the pain in the ass that is bad weather, the
| logistics of sourcing and moving all the materials, plans,
| permits, etc.
| Tyr42 wrote:
| I thought you were saying he sunk a nail into every pipe,
| and damn wouldn't that just suck.
| hbn wrote:
| It relieves pressure so your pipes never burst!
| at-fates-hands wrote:
| >> Caution, it is easy to seriously underestimate how much
| work it is to build a house.
|
| I used to work at a bike shop and thought it would be easy
| to build a bike from the ground up. Easy. Get a frame, fork
| set, and some other parts. Easy, right? I had no idea the
| amount of small parts one needs, including all the other
| minor stuff you have to buy like brake lines, headset, etc.
| Instead of a few week process, it became a few month
| process because I had to keep buying all these things I had
| forgotten about and didn't know I needed.
|
| Now scale that up a house. I can't imagine the amount of
| things one could easily forget about on a project that
| scale and not realize until it was too late.
| PragmaticPulp wrote:
| I think the parent comment was suggesting to hire
| subcontractors to do most or all of the work.
|
| But I agree: It's easy to greatly underestimate the amount
| of work that goes into a house. Contractors will have
| entire crews, all of the equipment they need, and most
| importantly they have years of experience to know how to do
| something quickly and in a way that will pass inspection.
|
| A DIYer must first learn each step before doing it, which
| can take as much or more time than the task itself in many
| cases.
| bitexploder wrote:
| I watched a carpet guy come in and install carpet in our
| basement in a day and a half. It was a significant sq ft
| install >1000. Guy was a machine. He had help on a few
| things, but did it all fast and very expertly. Impressive
| to watch someone that really knows a physical craft. It
| would have taken us 3-5x as long if we did it ourselves.
| m_myers wrote:
| Or build a house from a kit, as noted building expert Buster
| Keaton does in the short "One Week". What could possibly go
| wrong?
|
| https://www.youtube.com/watch?v=Xd6ddOlbKp8
| NordSteve wrote:
| You used to be able to mailorder houses from Sears (the
| Amazon of the 20th century).
|
| https://www.vintag.es/2019/02/sears-catalog-homes.html
| kebman wrote:
| Why does the USA, The Land of the Free and The Land of
| Opportunity, have so much bureaucracy? Look, I know fire
| codes are important, and you don't want a building to crumble
| in around you, but... Seems the building codes in the US are
| unnecessarily strict. Is it power hungry bureaucrats or
| exploitation from contractors that has lead to it? And how
| can the people be given more liberty to build the way they
| want?
| 20after4 wrote:
| It's not that way everywhere in the U.S. It's mostly cities
| and varies from one county to the next. It can be anywhere
| from extremely strict all the way to zero regulation
| whatsoever.
| siva7 wrote:
| If you call that bureaucracy wait till you see Europe. The
| reasons are diverse but one main factor is reading less
| news about people dying in misconstructed buildings.
| jdgoesmarching wrote:
| Actually the reverse, building codes for most of the US are
| a joke. We continue to build horribly inefficient and
| uncomfortable homes because every extra penny is spent on
| square footage and extra McMansion features. When houses
| become financial instruments there is no incentive to make
| houses into good homes, despite building science folks
| jumping up and down for decades.
|
| Houses are complicated systems that need to control heat,
| moisture, water, and power while removing waste. This whole
| thing needs to be structurally sound while burning slowly
| enough so that you have time to react and escape in case of
| a fire. These are the most important investments most
| people ever make, and for the most part we are all served
| the cheapest legally permissible house that consumes as
| much space as possible.
| pvarangot wrote:
| Don't get me started on sound insulation. The condo I
| rent is two units in four stories and if the room on the
| fourth floor is playing music at a decent volume you can
| still hear from the garage. The whole thing is five
| million dollars. Retrofitting proper sound insulation on
| the whole building is north of 180k.
| rinze wrote:
| > Why does the USA, The Land of the Free and The Land of
| Opportunity, have so much bureaucracy? Look, I know fire
| codes are important, and you don't want a building to
| crumble in around you, but...
|
| Yep, we should leave that to the market. You happen to live
| in a building that collapses, well, then you can have The
| Choice(TM) to never inhabit a building made by the same
| company again (if you're lucky). Eventually they'll be
| driven out of the market, unless people choose to risk it
| after assessing all available information, in which case
| there's nothing we can really do about it.
| dctoedt wrote:
| He's being sarcastic.
| kebman wrote:
| I can't dislike you jumping to conclusions, so I'll just
| leave this sarcastic comment.
| Aloha wrote:
| Notice how that building collapse in Florida is a
| vanishingly rare event?
|
| That's part of why. Also some rent seeking in there. We
| used to have weak building codes, more buildings fell down.
| kebman wrote:
| I get the need to safeguard condominiums and high-rises,
| but what is that to single or duplex home owners?
| mellavora wrote:
| There is some really interesting history here. When we
| started moving into the prairies after the civil war, we
| also invented the modern timber-frame house which was
| shipped via railroads.
|
| We soon learned that a simple timber frame with paneling
| on both sides meant the whole house was a collection of
| chimneys, which meant any fire would very quickly
| overwhelm the entire house.
|
| So we came up with some building codes which said that
| the timber frame needed more side-trusses to act as
| firebreaks.
|
| Note that this applies mostly to single and duplex home
| owners.
| oivey wrote:
| Single family homeowners still don't want to live in
| collapsing fire traps with railing short enough that
| their toddler can climb over. The building codes are also
| different for different building types. Not all hazards
| in a building will be obviously apparent to a layman.
| dannyw wrote:
| There's a general expectation that if you own a house,
| even a single or duplex house, it's not going to fall
| apart and put lives at risk with a moderate storm or
| kitchen fire.
|
| I'd agree with you that there is a lot of unnecessary and
| unproductive bureaucracy in the process, but I do not
| mind the status quo.
| chasd00 wrote:
| I bought 20 acres in the hills around SE Oklahoma and am
| planning on a cabin next year. You can pretty much do
| whatever you want in Oklahoma. I was asking around about
| building permits and other regulations and the response was
| always a confused look and "it's your land, you can do what
| you want".
| coding123 wrote:
| Uhh, contact the county.
| BurningFrog wrote:
| > _That is if you get the blueprints past the town 's
| council. Getting approvals is the tough part._
|
| This is what's wrong with America.
| dougmwne wrote:
| My stepdad was a software engineer and built our house
| growing up. The house was fabulous. The construction took 15
| years of hard labor as a full time second job
| trey-jones wrote:
| I started in 2008, we moved in in 2016, and there's a lot
| of work left to do. I admit that it's not a full time
| second job though. Once we moved in it turned into mostly
| weekends.
| dboreham wrote:
| Developer who owns an excavator, track skid steer, dump
| trailer here. Probably a wet lot...
| d0gsg0w00f wrote:
| Check out Andrew Camarata on youtube. My favorite youtube
| channel.
|
| He's a guy who worked for USPS and wanted to build a metal
| building on an undeveloped lot so he bought a backhoe, then
| an excavator, then a dumptruck, then a crane, etc. He buys
| all his equipment used and maintains it all himself. He
| quit USPS a long time ago and does work for hire with his
| equipment now that he has it all.
| dboreham wrote:
| Andrew is where I learned that a regular joe could just
| buy heavy equipment and do the small excavation jobs
| contractors wouldn't touch. Sometimes he omits safety
| measures to the point that it's hard to watch (check out
| the recent bar sickle mower episode). So it's worthwhile
| reading the comments to find out what not to do also.
| bluGill wrote:
| Before buying look at renting. There are pros and cons to
| renting, but most people won't use that enough to make
| buying cheaper, and renting means it is maintained for
| you.
| dboreham wrote:
| True but renting doesn't work for me because:
|
| 1. My lifestyle is such that I only get an hour or two
| here and there to progress my projects. It takes probably
| 2h to go fetch a machine and unload it, so zero work
| would get done.
|
| 2. Around here rental machine availability is very
| inconsistent: it's quite likely that whatever machine you
| want is not available when you need it.
|
| 3. I've found that it's beneficial to have various
| attachments and accessories that most rental places don't
| carry such as a ditching bucket, pallet forks, brush
| mower.
|
| 4. I need to do snow removal in winter and although not
| necessary, heavy equipment comes in handy for that.
|
| 5. Other random things that arise when you own property:
| lift a fallen tree off your vehicle; unload palletized
| deliveries from semi truck, etc.
|
| 6. Typically the value of machines doesn't drop much, so
| if you have the cash available, buying machines with the
| expectation of selling them some time in the future means
| overall low TCO.
|
| That said, I'd rent when I need a machine I would only
| use for one job.
| magicalhippo wrote:
| > Realize too, the General Contractor just hires licensed
| subs, and takes a healthy cut off your nut.
|
| Some close relatives bought a plot in a newly developed area,
| and tried to find a contractor to build their home. After
| listening to others in the area, it was pretty clear there
| was a couple of good, reputable ones and one avoid-at-all-
| costs.
|
| So they went with one of the reputable ones. The guy decides
| at some point to have a look and see how it's going, and
| finds a somewhat confused-looking 17 year old trying to pour
| the basement floor/deck on his own.
|
| Guy asks wtf he's doing there. Turns out he's the son of the
| guy running the avoid-at-all-costs contractor, and this was
| the first time the kid had done this kind of thing. His dad
| had told him to go and fix this, so being an obedient son he
| gave it his best...
|
| Of course the reputable company had hired the avoid-at-all-
| costs company to do the job since they were too busy for some
| reason...
| nostrademons wrote:
| There's a form of reputation arbitrage where when there's a
| lot of demand, a reputable contractor just says yes to
| everyone with a project and then subcontracts out to the
| not-so-reputable contractors that the customer doesn't want
| to touch. We ran into this with our solar installer - they
| came with great reviews from 2 coworkers, and all their
| other reviews up until about a month or two before our
| project were great, and _when we actually got folks who
| worked for the company out_ they were pretty good. But then
| they took our money and subcontracted it out to some
| roofers who drilled through our roof, even after the
| salesguy (who I later learned was also a subcontractor, and
| seemingly trying to screw the CEO) explicitly told me they
| wouldn 't subcontract it.
|
| I figure this is the brick & mortar equivalent of an exit
| scam, or a tech startup's "incredible journey". Build up
| lots of good will over several years and then blow it all
| as you collect enough money to retire and never deal with
| people again.
| sizzle wrote:
| Were they not supposed to drill through the roof? Did
| they botch the install?
| nostrademons wrote:
| Yeah puncturing a roof is a big no-no - it can lead to
| water or structural damage to the house. Most companies
| (including ours) offer a warranty for it, and they did
| come out and fix it with some wood putty and paint, but
| we're still a little pissed. The also damaged the
| driveway (we're on a steep hill with a private drive, and
| told them that they can't drive large trucks up it, but
| they did anyway). And they seem completely incompetent
| for the first 2-3 times coming out and fixing it, until
| they finally gave up on subcontractors and sent their own
| guys out. CEO seemed to have no idea what was going on
| with his company with his underlings intentionally
| undermining him.
| sizzle wrote:
| Hopefully he watched some YouTube videos on how to mix and
| pour concrete /s
|
| I would be livid and consulting lawyers if I was exposed to
| this brazen bait and switch by so called "reputable"
| company.
| datavirtue wrote:
| LMAO!!! This is a perfect example. Not surprised, in fact
| this is what I would expect to happen. People have no idea
| how difficult it is to become a good builder and make
| money. It rarely happens.
|
| Stick to buying spec houses. They will always be better
| than a custom home because people get to examine the house
| before they agree to buy it. Whole world changes when you
| are under contract for a build/remodel.
| rootusrootus wrote:
| We bought a spec house, but it was just getting underway
| when we signed the contract. I like that option, it
| worked out well for us. Got to pick all the finishes.
| Made some minor changes along the way to the plans,
| changed the appliance choices to fit my preferences, etc.
| So I got the upsides of a spec build, but I also got to
| make sure they put in a properly large kitchen island,
| double ovens, and other improvements that usually get
| left out of a pure-spec build.
|
| I also got to visit the site every day and take pictures,
| which is really nice to have. Especially the day before
| they did drywall, I went nuts with pictures and now I can
| tell you _exactly_ what the inside of every single wall
| looks like, what the electrical looks like, the plumbing,
| conduit, smurf tubes, etc.
|
| Also, if you are nice and polite, you can talk directly
| to the subcontractors in some cases and get even more
| customization at a great price. E.g. the electrical guy
| offered to run cat5 throughout the house for a few
| hundred bucks. He couldn't terminate it, because he's not
| licensed for low voltage, but he could run the wire
| itself and leave it coiled up in a single gang box in
| every room. The builder didn't think to offer that, but
| having a chat with the electrician when he was on site
| gave us that option.
| willyt wrote:
| All the <10 yr old spec houses in housing estate near me
| have got huge mould problems as somebody cut corners on
| either the installation of the insulation, the detailed
| design of the floor/ground connection or the ventilation,
| or all three. In the UK spec housing has a reputation for
| being very poorly built. Try claiming anything under a
| building warranty and you'll realise you get nothing more
| than minor cosmetic repairs without going up against the
| warranty company's lawyers.
| pjc50 wrote:
| > I just pictured a typical computer developer in a wet lot,
| with an unhappy wife.
|
| Have you heard of the TV programme _Grand Designs_? It 's
| just this over and over again. Sometimes the wife is
| pregnant, sometimes they're living in a caravan on site.
| https://www.channel4.com/programmes/grand-designs
|
| They're not trying to build anything as simple as a house,
| either, the "grand" part implies some mad architectural
| vision that will become unliveable within months while also
| looking completely horrendous in its rural setting.
| joeberon wrote:
| It's excellent pain-viewing
| mxmilkiib wrote:
| https://twitter.com/ukgranddesigns no context grand
| designs
| PaulDavisThe1st wrote:
| Also, now apparently releasing direct to YT ...
|
| https://www.youtube.com/channel/UCGa4o2Dc9JhC4xTKa3OKVfA
| rgallagher27 wrote:
| Excellent drinking-game tv!
|
| Take a shot every time Kevin says "bespoke"
| andysomniac wrote:
| There was an unofficial drinking game on the internet,
| Kevin found out about it and deliberately made one
| episode to ensure all the rules got hit as frequently as
| possible.
| frosted-flakes wrote:
| I need to know more about this.
| madaxe_again wrote:
| I'm living this dream, just sans the TV crew. And without
| any crew. It's been a learning curve, but a year after
| shovels hit the dirt, we're just about ready to move out of
| our freezing vermin-ridden shack into our heated luxury
| shack with indoor plumbing.
|
| Fortunately, my wife isn't pregnant... I don't think.
| moftz wrote:
| I remember watching an episode where they planned to build
| a partially subterranean home all within some sort of
| triangle shaped junkyard that sat on the interior of a
| block of townhomes. Completely ridiculous idea but when
| you've got lots of money, why not? There were two basement
| levels and then two planned above ground levels except they
| ran out of money for the top floor and stopped there. Who
| wants to live in that terrible location in a house where
| most of the living space is in a basement? They could have
| built a lovely country mansion or even a very nice normal
| house in the suburbs. Instead, they waste money on unique
| but stupid ideas.
| Lev1a wrote:
| The only "Grand Design" I've ever seen and liked was
| Clarkson's "Grand Design Citroen" during their "Self-built
| Campervan Challenge":
|
| https://www.youtube.com/watch?v=I7g08nwEmyY
| Scoundreller wrote:
| > while also looking completely horrendous in its rural
| setting
|
| Reminds me of my grandpa's house kinda. Well, he's from
| Southern Europe, so he built a brick box amongst a bunch of
| mid century/post WWII vinyl siding houses. Nothing wrong
| with it, but sticks out. Sure is solid though. And a cube
| is a good use of materials to maximize inside space to
| perimeter ratio.
| BurningFrog wrote:
| Love it. Every village needs an eccentric.
| blitzar wrote:
| > Sometimes the wife is pregnant
|
| The mid project reveal is always "surprise we are
| pregnant". It brings me great added joy when they are
| building a 'dream' 3 bedroom house and it is the 3rd kid
| that they are pregnant with.
| orthoxerox wrote:
| One bedroom for the parents, two bedrooms for the kids.
| As long as all kids conform to the gender binary, two
| bedrooms should be enough.
| Robotbeat wrote:
| And when they're young, a boy and girl in the same room
| is absolutely fine.
| blacktriangle wrote:
| You mean as long as the kids' parents aren't mentally
| abusing their children to score points with their woke
| friends.
| datavirtue wrote:
| Seeing a lot of this in private school.
| SuoDuanDao wrote:
| I wonder how much children are also encouraged to talk up
| the amount of gaslighting for the same reasons the adults
| are encouraged to engage in it.
| blitzar wrote:
| I am more than comfortable for that to be your 'dream
| home' but it is not my dream home.
| mrexroad wrote:
| This. 3 kids here in a 3 bedroom house (~1100sqft). One
| in high school, middle, and elementary. It works,
| although another 500sqft would give us some more
| breathing room.
|
| Since my boys are teenagers now, I spent the pandemic
| building a rather nice lofted bed setup out of baltic
| birch ply for their shared room. It gives them their own
| personal space (had them help design use cases) and more
| privacy than most kids in the world have. One is autistic
| and hypersensitive to the others habits, but I was able
| to mitigate 95% of that with visual blocking, acoustic
| materials, and a HomePod mini for pink noise.
|
| You make do with what you have. Some of son's friends
| live in 5-10M houses, some live in trailers, some in
| apartments. I think they all understand that, while they
| probably want more, they're lucky to have this.
| ventidesigns wrote:
| There's some successful projects though! There's a good
| range, I like the variety, from spectacular ego-driven
| marriage-ending failures (...the lighthouse[1]) to some
| beautiful labours of love (the tree house[2]).
|
| Grand Designs is as much a monument to human achievement as
| it is failure!
|
| [1] https://youtube.com/watch?v=3AlsMEiAMvM [2]
| https://youtube.com/watch?v=CBpRLzbrCa8
| PaulDavisThe1st wrote:
| It's amazing how many of the projects featured on GD end
| up being sold not long after completion.
|
| The most dramatic one that I noted was a very
| contemporary museum looking home. The owner stressed how
| long they had spent planning it, and how you only get
| once chance, and it would be his dream home. He completes
| the house in the Surrey woods (it was beautiful, to be
| sure). Sells within a year and buys property on the Costa
| del Sol in Spain.
| shados wrote:
| They're not lying though when saying everything else
| skyrocketed. There's been shortages of everything.
|
| With that said, labor shortage in the trades is probably the
| biggest culprit at this point. Even before the pandemic, in
| some areas you couldn't get a contractor to come in to do
| anything unless it was a massively profitable project. I had
| contractors walk away from 6 figure projects because they
| weren't big enough.
|
| The pandemic made it a lot worse. Plumbers here are booked 6
| weeks ahead for anything that isn't an emergency.
| archsurface wrote:
| Yep, but the talk from above is about "transitory inflation".
| Maybe it is, but I agree sellers will drag out inflated prices
| as long as possible.
|
| I'm curious about US price of land. I looked into building a
| place in the UK, and the price of land alone was a blocker.
| fy20 wrote:
| The UK has a high population density, and a lot of land is
| still owned by old nobility who don't really care to sell it.
|
| In the rest of Europe prices are much lower, I'm currently
| building a house in Northern Europe on the outskirts of the
| capital (within city limits) and we paid EUR30/m2 for the
| land in 2019.
| roland35 wrote:
| I feel your pain... I was looking at building a house (with a
| national builder) and the historical prices in that
| neighborhood showed that the price went up about 30% in the
| past year. I think most of that was just the general price of
| housing, not just raw materials.
|
| We decided to stay put in our existing home for the time being.
| I don't think housing prices will likely go down much, but
| maybe level off a bit? The rise in the Case-Shiller index
| certainly doesn't look sustainable:
| https://fred.stlouisfed.org/series/CSUSHPINSA
| MrYellowP wrote:
| They don't need an excuse. Thanks to the idea of the Great
| Reset, everyone with enough money is trying to have a house
| they will eventually rent away, or live in it themselves.
|
| There's zero reason for prices to go down. None. I've read that
| plenty of houses are being bought even above asking price, so
| cost of building isn't a real factor.
|
| Sure, I'm not counting the crash where all the clueless dumb
| money will try to sell their houses.
|
| When the bubble pops only the idiots will try to sell, and the
| smart money will grab whatever they can. ROI in terms of "old
| money" is irrelevant. What matters is getting rid of old money
| and investing it in something that brings in new money post-
| crash.
| ericmay wrote:
| I'm seeing prices go down. I've been looking passively for a
| few years (it's like my version of doom scrolling on Facebook
| or something). Houses in Columbus listed for $500,000,
| $600,000, $900,000, etc. are dropping in price, $5k cut here,
| $10k cut there, and then it's a total of $25k cut. Or they
| pul it off the market and re-list $50k cheaper.
|
| Neighbors just sold their house, went for $5k under asking in
| one of the best school districts in the state. I think it's
| over-priced still, but w/e. Point is there hasn't been a
| whole lot of selling under asking price going on, and now
| there is.
| wccrawford wrote:
| You say "only the idiots", but people who have fallen on hard
| times (perhaps because of that same housing market crash)
| could be _forced_ to sell their houses, too, essentially
| hurting them twice.
| [deleted]
| quickthrower2 wrote:
| Get someone you know to call the builder for a quote. Maybe
| they know you really want it so jacked up the price.
| cfn wrote:
| I need to do some renovation but contractors keep saying that
| aluminum's price went up by 70%, steel by 80%, etc. So it is
| not only lumber. I postponed everything until prices settle
| down.
| RyJones wrote:
| A friend is a commercial HVAC contractor. They can't get parts
| for service work, let alone units for new construction. There's
| no amount of money to jump to the front of the list - the
| components aren't there.
| mbostleman wrote:
| Yes, builders will react by trying to artificially maintain the
| high prices. But they will ultimately be overcome by the market
| reality. Unless they all band together but that's impossible
| given the scale and illegal.
| erhk wrote:
| There's a bit of smoothing too i would imagine
| maxerickson wrote:
| There's all kinds of supply disruptions right now (that have
| come to a head in the last 14 months).
| AngryData wrote:
| You also have to remember that the construction industry itself
| is constantly in a boom and bust cycle and we are in the boom
| cycle right now, it would have been more expensive now than a
| year or two ago even without the pandemic or any other economic
| factors, just those other factors have nudged it up a bit
| higher.
|
| Couple years from now it will settle down and carpenters and
| tradesmen will be fishing for jobs again and lowering prices
| for consistent work instead of like now where they can throw
| out a even the shittiest net and catch over their limit.
| m463 wrote:
| What about other stuff? I got a quote for electrical work that
| was only good for 14 days because of the volatile prices of
| copper wire and other components like panels and circuit
| breakers.
| Zenst wrote:
| Does it not start to become cheaper to rent some storage and
| buy the items when they are low, like timber now and then the
| other core bits, biding your time. Though storage costs a
| factor and equally equity to buy the materials over time at the
| right prices. But then those materials are assets and if you
| buy cheap, even if you don't go ahead - resell will break you
| even at least.
|
| Much the same way air-con units and fans cost more in the
| summer compared to winter - prices do seasonally fluctuate and
| those can have a knock on effect. So cheap timber will drive up
| the other items with demand, so you can almost foresee once
| timber goes up, the ancillary items will come down due to
| demand again. That and winter, will curtail some demand and
| that may well be the time for buying some items.
| popcube wrote:
| price never lower, even when the reason that raised price did
| not exist, they just find a reason to earn more money
| JumpCrisscross wrote:
| > _I 'm not seeing any 'blowout' prices on new construction in
| the short term_
|
| We are in a housing shortage [1] which is driving a home-
| construction boom [2] powering a construction-labor shortage
| [3].
|
| Until that labor shortage is resolved, via higher pay (which,
| depending on the rate of new entrants, will either reduce
| margins or be permanently passed along to consumers) or via new
| recruits, raw-materials cost advantages aren't going to be
| passed along to consumers.
|
| [1] https://www.federalreserve.gov/econres/notes/feds-
| notes/hous...
|
| [2] https://fred.stlouisfed.org/series/PERMIT
|
| [3] https://fred.stlouisfed.org/series/JTS2300JOL
| bequanna wrote:
| > powering a construction-labor shortage
|
| I've been discussing with builders for the past few months
| and they state that the main issue is the lack of low-skilled
| laborers. They claimed that many workers at that level left
| >18 months ago and haven't returned due to the protracted,
| bonus unemployment that they were receiving, which recently
| has expired.
|
| Almost all contractors/builders expect the low-level workers
| that have been on the sidelines to return over the next few
| months and project to be able to handle 2x the work by Spring
| 2022.
| mywittyname wrote:
| > They claimed that many workers at that level left >18
| months ago and haven't returned due to the protracted,
| bonus unemployment that they were receiving, which recently
| has expired.
|
| Doubt. I've been on unemployment before. If you're skilled
| in the slightest, they are putting your ass to work
| quickly. If you're unskilled, but can lift 30lbs, then they
| are putting your ass to work pretty quickly. The people
| managing to run out the clock on unemployment are basically
| 50+ year old women, or those who are really good at gaming
| the systems which are not easily gamed.
|
| I built a house in 2018 and there was a huge construction
| labor shortage even them. Partially due to difficulty
| getting immigrant workers and partially because people who
| left the business after 2009 are only recently starting to
| be replaced.
| bequanna wrote:
| People were not receiving typical unemployment benefits.
| When you look at the size of the benefit amounts from the
| perspective of a working class person or Jr Employee, it
| was a no brainer: Stay at home, make more money.
|
| Check out the number of people who were still receiving
| unemployment when the federal bonus ran out and compare
| that to the number of open entry level positions. People
| were/are absolutely choosing to say home instead of
| finding work.
|
| Who can blame them! It is the smarter decision.
|
| The US Gov't should have stepped this down much earlier.
| Now we have a decent sized group of young people who have
| spent the better part of two years expecting checks in
| their mailbox and no student loan payments. Reality is
| going to hit them hard.
|
| I think our collective charity is running out. IMO, All
| this is going to result in is childish tantrums demanding
| "basic income" from able bodied people who are finally
| being forced to to accept the economic realities of their
| position.
| chromatin wrote:
| We backed out of working with a builder because price went up
| about $100k over the course of 3 months earlier in 2021. There
| is no way that was justified , lumber and supply chains
| notwithstanding. I respect his right to maximize profits in
| this market, but I won't be part of it.
| dannyw wrote:
| Unfortunately I suspect it'll never be cheaper to build.
| pie42000 wrote:
| You realize a massive market crash is coming soon? The
| quick sugar high from all the stinky $$$ will dry up soon,
| and then the market will crash. If that happens, expect it
| to be very cheap to buy a house and a used car when all the
| people who could barely afford their new car/house find
| themselves underwater, unemployed, and no longer receiving
| Covid stimulus checks.
|
| But who knows, maybe the economy will just keep booming
| forever
| reverend_gonzo wrote:
| They've been saying there's a pending crash for the last
| five years. I've expected it too.
|
| The only thing that happens is soon as the market gets
| skittish, the fed prints money. They seem to be so scared
| of a recession, or maybe, the poets that be are so
| leveraged up themselves, that they will do whatever it
| takes to prevent a crash.
|
| My thought is, don't be so leveraged that you're the
| first to collapse when things go down. If things continue
| collapsing, the fed will step in and fix everybody still
| standing.
| mywittyname wrote:
| Try for the past 10 years. 2011 was a big recovery year
| and people were still screaming about a "double dip
| recession" coming.
| bradleyjg wrote:
| Maybe not in nominal terms, but does that really matter?
| matt_s wrote:
| Second this. If inflation numbers keep going up 5% per
| month, the cost of literally everything will keep going up.
| There are labor shortages in a lot of industries which
| means employers need to compete on $/hr or workers will go
| to where they can make more. Not out of spite or greed, it
| will cost more to feed their family because those costs
| will have gone up.
|
| This also means the housing prices will probably continue
| to go up as well.
| dwpdwpdwpdwpdwp wrote:
| 5% year over year, not per month.
| singhrac wrote:
| And to clarify... that's 5.3% over last August, when
| (some) prices were depressed because of the pandemic.
| Inflation is already slowing down.
| coding123 wrote:
| Not what I'm seeing. Hot dog buns to cheese, everything
| that was $2 is $3 right now. I swear everything has whole
| foods price right now. I don't care what the govt. is
| tracking they are obviously not in my safeway.
| Mvhsz wrote:
| The US Bureau of Labor Statistics actually employees
| quite a few people to call stores across the country and
| get prices. Planet money interviewed one such person not
| long ago. https://www.npr.org/2021/07/13/1015804773/how-
| do-you-measure...
| snarf21 wrote:
| This is the same thing happening with cars. There isn't enough
| new car inventory so used cars are going higher and higher.
| Dealers are buying used cars for _MORE_ than people paid new.
| As already built houses for sale continues to rise, new
| construction and rents will rise too. The market is adjusting
| to make all choices equally bad.
| zdragnar wrote:
| I'm starting to see dealers sell at, and in some cases above,
| the cars MSRP. The value proposition of buying new is shaky
| enough during good years, I cannot imagine buying a new car
| above MSRP.
| snarf21 wrote:
| My dad sells new cars, they are selling at $3K over
| invoice. Desperate people will pay desperate prices.
| kebman wrote:
| Yes, these companies and contractors have already spent a ton
| of extra money panic-buying lumber at a highly elevated price
| due to the shortage. Many of them probably didn't even have a
| choice but to buy in order for their building contracts to stay
| valid.
|
| For most it's far more expensive to get bogged down in
| litigation than just buying the lumber at whatever the asking
| price is. So now they've got to cut corners or find another way
| to make money despite of their elevated holds of lumber.
|
| The result may very well be _deflation,_ as contractors are now
| forced to undercut each other to get new building contracts, as
| lumber production has been increased to meet the demand. That
| is if you can afford to wait.
|
| Think of it like a traffic jam. The cars behind the lumber car
| won't be able to move before _it_ can move, and then--due to
| market insecurities--the lumber car might not even be able to
| go full steam ahead. Because no lumber producer wants to
| producer more lumber than necessary, since that 'll only lead
| to the price dropping unnecessarily. And so we're stuck in a
| situation where the line leap-frogs slowly forward until the
| guys in the front finally feel safe enough to push the pedal to
| the metal.
| [deleted]
| throwdecro wrote:
| Watch out for HELOCs in what sense? Who would loan money to a
| homeowner with an underwater house, not matter how much they
| clamor?
| [deleted]
| hpoe wrote:
| People get HELOCs now, intending to flip the house sometime
| soon. Suddenly the house depreciates substantially in value,
| they still have to pay for the HELOC and the mortgage for a
| house that they weren't planning on holding on to and can't
| get rid of and now they are trapped.
| throwdecro wrote:
| Sounds unsustainable. If enough people do that maybe we'll
| see some affordable housing soon!
| abakker wrote:
| I don't know about what you have seen, but a lot of of
| banks are not even offering new HELOCs now.
| tayo42 wrote:
| who has all this money to spend? everywhere everything is so
| expensive. i make a ton, and this doesn't add up. nothing about
| home prices seems to add up.
| comeonseriously wrote:
| My SO and I are both devs and we make good money. We live in
| a low CoL area and basically live on one income. We've been
| tightening our belt even more because everything is so crazy.
| We paid off our house recently but it was about 14% of our
| income. There's NO WAY I would move right now and buy a house
| and have it 30, 40 or 50% of our income. I don't understand
| how people who make the median are able to stay afloat right
| now.
| toomuchtodo wrote:
| Mortgage borrowing costs are at historic lows.
| tayo42 wrote:
| its still expensive to borrow $700,000, on top of your
| current expenses. that's an extra payment of $3300, whos
| got that laying around to wait for a house to be built
| Dylan16807 wrote:
| Hang on let me check your other comments in this thread.
|
| You do!
|
| Most people, when they get a mortgage, they're going deep
| into debt. You have about that much in liquid assets. You
| can definitely afford it.
| tayo42 wrote:
| Ehh I think it would be irresponsible to use all my
| savings like that, plus you need to buy the land to build
| on and pay for your current place
| Dylan16807 wrote:
| You still end up owning the house, so it's more of a
| conversion in savings. And you'd probably be paying it
| off over time, with the help of ongoing income, if the
| mortgage rate isn't super high.
|
| Land depends on where you go, no comment there, but
| keeping up payment on your current place during
| construction just means you end up paying for 21 years of
| housing on a 20 year mortgage, or 31 years of housing on
| a 30 year mortgage, not a big deal.
| tayo42 wrote:
| hmm thats an interesting way to think of it.
| blitzar wrote:
| Nothing wrong with having $1mil in a bank account, $1mil
| house, $1mil mortgage (yes naive / general example - but
| I am sure you can get the idea).
| imtringued wrote:
| Assuming a 4% interest rate and 30 year mortgage that
| 700k house will also cost you $500k in interest and
| therefore the financing cost of that house is $1.2
| million. The fun part: dropping interest to 0% raises the
| price of the house to $1.2 million without raising the
| financing cost.
|
| What dropping interest rates does is not prop up the
| price of housing, it's increasing the resale value of the
| housing you already pay for.
| toomuchtodo wrote:
| A down payment is required if not paying cash, usually
| 10-20%. You're financing the rest at 2-3% for 30 years,
| or borrowing against your public securities at ~1% and a
| reasonable amount of leverage (~%30) dictated by your
| brokerage.
| arthurcolle wrote:
| If the Fed is committed to propping up equity markets
| which they asserted in no uncertain terms when markets
| died in the beginnings of the realization that COVID was
| going to be much more substantive than SARS or H1N1, it
| was clear that equity markets would take the "good news"
| of lockdowns + continued lower interest rates as signs
| that equity markets were going to continue to rally.
|
| I mean basically where is there yield? Crypto + NFTs
| (yuck to the latter), real estate and equities. Even just
| running correlation analysis on these various assets over
| the last 20 years showed that crypto was super
| underpriced (despite only 12/13 year track record) while
| real estate is tremendously overvalued and equities were
| the only thing to react in a reasonable way to both (1)
| the initial realization covid was serious and (2) the Fed
| stepping in with 2 novel revolvers for SMB and for
| corporate credit. Treasury even threw in a bit into the
| bowl and performed stimulus. The last 1.5 years likely
| minted more "wealth" than in the previous 100 years
| combined (hand waving a bit) - a framework was laid to
| make much more money than what you put in provided you
| were looking at what was to come based on what was
| spoken.
| imtringued wrote:
| You know, all these people talking about savings being
| sacred and driving investment. All that stimulus did
| nothing. It turns out, unlike the cartoon villain
| depictions of government in various economic ideologies,
| governments are one of the biggest drivers of investment
| in an economy and taking money away from them often
| results in less investment overall. Meanwhile it's the
| private sector that failed to invest its money.
|
| When people talk more and more about how lower taxes on
| the rich boost investment you already know that private
| investment is dead and won't recover no matter what you
| do.
| wombat23 wrote:
| > Even just running correlation analysis on these various
| assets over the last 20 years showed that crypto was
| super underpriced
|
| care to elaborate?
| zthrowaway wrote:
| As someone with two realtors in my family, my understanding
| is most people are living beyond their means and don't
| actually have the money. But the rates are low and loans are
| being handed out like hot cakes. People are carelessly and
| knowingly going into negative equity right now and will have
| a big wake up call once this market stabilizes, they're going
| to be stuck for quite some time. Some of these people are
| even tapping out their 401k in their 40s just go buy right
| now. I don't know if it's FOMO or what but it makes zero
| sense to me.
|
| There are those who sold at a higher price and got spring-
| boarded into a higher priced house but these are the
| exceptions.
| cerved wrote:
| it worked out so great last time..
| wombat23 wrote:
| I've been wondering the same. Apparently, where I live (HCOL)
| people don't care about ever paying off the full amount, as
| long as the monthly installment is low. Regulations only
| require that you paid off 33% of the house value after 15
| years.
|
| You do need to start at 20% capitalization though, which at
| current prices means they need to own assets already (market
| risk), or have bonkers amounts of currency sitting around
| (inflation risk). I understand the FOMO some people must
| have.
|
| I wonder if ultimately there is a cascade happening, where
| increased valuations lead previous owners to either take new
| mortgages, or sell their old house, and pay more for a new
| one. Which creates a cycle of ever increasing prices? I've
| never read anything though whether such an effect exists.
| kleinsch wrote:
| In HCOL areas of the US, 10% down is becoming more common
| with private lenders and 5% is even a possibility (or at
| least was pre-pandemic). Pre-pandemic we had multiple
| competing banks for a $1MM+ mortgage w/ 10% down.
| arthurcolle wrote:
| Stocks only go up
| blitzar wrote:
| You misspelt Stonks.
| grepfru_it wrote:
| Money printer goes brrrrrrr
| smabie wrote:
| I think for a lot of (white collar) people, the last year and
| a half of covid has been the most lucrative time of their
| entire lives. Crazy returns across all asset classes.
| tayo42 wrote:
| my measly half million dollar worth of stocks "only" grew
| 30%. There's a significant amount of people do that much
| better than i did? what am i missing?
| smabie wrote:
| tech stocks, crypto, real estate, etc
| tayo42 wrote:
| people have 6 figure crypto accounts that aren't just
| already wealthy? this is the norm and they're all buying
| property and driving up prices?
| philjohn wrote:
| If you're anything like me you probably managed to save a
| whole heap of money as well - less eating out, no
| commuting costs etc. etc.
| plorkyeran wrote:
| A bunch of tech stocks doubled in 2020, and some did
| significantly better than that.
| tayo42 wrote:
| I mean i know some lucky pickers and gamblers probably
| did better than me but there cant be that many that
| theyre all driving housing markets up
| fridif wrote:
| I spent 1.1M on a house with my wife of course and am
| very happy with my purchase. Lots of land and nobody
| around to tell me what to do.
| pengaru wrote:
| > with my wife
|
| > nobody around to tell me what to do
| matt_s wrote:
| LOL
| satronaut wrote:
| burn!
| pjc50 wrote:
| Congratulations, you're in the top 1%.
|
| There aren't that many people above you, but 1% of the US
| population is still millions, and they have an outsized
| influence and visibility.
|
| Property also suffers from "pigeonhole" effects; a few
| foreign millionaires parking their money in empty
| properties at the top end causes everyone to move along
| one.
| tmountain wrote:
| The threshold to be in the top 1% in the US is 11M. A US
| citizen needs 4.4M to be in the top 1% globally. More
| than 8% of US families fall into the millionaire
| category.
| Invictus0 wrote:
| In my opinion, it's more meaningful to look at top X% as
| a function of age bracket. Any moderately successful
| American born in 1950 is probably a millionaire today.
| larrywright wrote:
| In terms of my stock portfolio (just 401k/IRA and some
| shares in an employee stock purchase program), most
| definitely. I actually feel a bit guilty about that. So
| many people have struggled financially but I did not. Top
| that off with seeing so many people jumping to new jobs,
| and discussion about big bumps in salary due to
| competition... it's hard not to see that there's a huge
| disparity between the tech sector and everyone else.
| sneak wrote:
| A monthly payment on a mortgage of $1mm is ~$4k. That's the
| same cost to rent a 2-3br in the 1k-1.4k square foot range in
| much of San Francisco.
|
| Napkin math suggests that it's a reasonable payment for those
| >=$170k annual income, which is very common in software in
| the USA.
| tayo42 wrote:
| there's also insurance, pmi if you didn't do the down
| payment, hoa seems common, taxes. Thats all more then 50%
| of my take home. (Im not including my rsu, im hesitant to
| budget off that theyre so variable) And a million dollar
| home is cheap at the moment. Looks like the median in sf if
| 1.5million.
| kiklion wrote:
| I financed 250,000 of a mortgage last year, and my
| mortgage payment is about $1200 a month (including taxes
| and insurance)
|
| Assuming taxes and insurance correspond with a % of home
| value, a 1 million mortgage would be about $4,800 a
| month.
|
| Or about $4,000 a month if talking about a $1 million
| dollar house with 80% financed.
| cmckn wrote:
| I tend to agree, but the numbers aren't _that_ crazy. My rent
| in the Seattle area is $2500 /month. I could buy a
| reasonably-nice house here for around $750k. If you have a
| $150k down payment (which isn't unrealistic to amass over ~5
| years on a nice tech salary), your mortgage payment will come
| out to ~$3000/month. That's not chump-change, and it's more
| than my current rent; but you're getting a lot more for your
| money. The numbers get a lot nicer if you're splitting them
| with a partner.
|
| Am I jumping to make this particular financial decision? Nah.
| But it's not wildly out of reach.
| patentatt wrote:
| What about property taxes? Don't know about WA, but where I
| am property taxes are nearly half again as much as the
| principal and interest, so a hypothetical $3k (P+I) could
| be more like $4-4.5k in some areas.
| BizarroLand wrote:
| I bought a $500k home in Pierce county, property taxes
| are 1.2% here vs .93% in King County. I'm paying about
| $6k/yr in property taxes and they would pay about the
| same +/- $1k for their $750k home.
| jdgoesmarching wrote:
| Asset managers, banks, property developers, and just general
| commercial construction are all hiring mostly the same trade
| professionals as residential. The former are snapping up a
| lot of homes.
| [deleted]
| mgkimsal wrote:
| Money is "cheap" and people think in terms of monthly
| payments only. Done larger builders are pitching things in
| terms of monthly costs only; they don't even publish prices,
| just payment estimates.
| stevehawk wrote:
| they don't have it. they're borrowing it
| lordnacho wrote:
| I don't get it either, and I'm a hedge fund manager. To my
| mind nothing seems like it's a sensible price in any of the
| cities I look at. I mean I get that there's a fair few people
| making good money who can buy a PS2M home, but it doesn't
| make any sense that there are entire swathes of London where
| every home is like that.
|
| A quick google suggests that a PS100K income is in the top 3%
| in this country, and top 1% is about PS176K.
|
| Sure, there's a few hundred football players averaging maybe
| PS3M a year who can thus buy maybe a PS15M palace, but if you
| go on a property site they could each buy one and still have
| pages and pages of places left on the market.
|
| Similarly there's a bunch of finance/media/law people who've
| climbed to the top of the greasy pole and could afford a PS3M
| house. But how many can we really be talking about? A few
| thousand? Ten thousand? Are there really that many MDs and
| law partners in London?
|
| Average income is still well under 6 figures in this country,
| and I know a load of doctors who are only just scraping into
| that category in their 30s. So if you're just scraping into 6
| figs as a highly trained and rare specialist, how can there
| be so many houses that cost 7 figures?
|
| Even if you add parental help, how many people who are
| splitting inheritance between 2/3 kids is it actually going
| to help?
|
| I suspect a lot of people have actually drawn on all
| reserves: found a high income partner, got help from the
| parents, got a max leveraged mortgage, and possibly some have
| lied about their income.
|
| I get the feeling it will end badly.
| mywittyname wrote:
| Isn't London housing driven largely by foreign investment?
| As in, wealthy people from across the world who are parking
| capital there because it's safe, not because they care
| particularly about returns.
|
| If brexit didn't end this, then it's probably a pretty
| stable system. It sucks for locals, but there are far worse
| places to over extend yourself on housing than in London.
| thrwyoilarticle wrote:
| Being valued at PS2M doesn't mean you could sell all of
| them for that price or that the people living in them paid
| PS2M for them.
|
| The sort of person who could afford a nice house 3+ decades
| ago and spent the intervening years living in London isn't
| likely to move to somewhere more rural just because they
| can realise an investment.
| RobertKerans wrote:
| > Being valued at PS2M doesn't mean you could sell all of
| them for that price or that the people living in them
| paid PS2M for them
|
| But in London these houses _do_ sell, normally very
| quickly (and bullshit apartments in shiny new blocks that
| are in same price bracket I guess same, generally they do
| _seem_ to sell, but I assume that 's just parking money
| for tax purposes so not quite same thing).
| thrwyoilarticle wrote:
| That's exactly my point. The demand is far higher than
| the supply.
| RobertKerans wrote:
| Ah, sorry, I misread that. GP has fair points though,
| whole situation in the UK is crazy, infects everything,
| it's an arms race
| comeonseriously wrote:
| > I get the feeling it will end badly.
|
| Yes, it will. When people get shoved into tiny homes with
| their parents and children and have zero hope for any
| future on their own, you will see the people say enough is
| enough. They will march. They will protest. They will vote.
| They will clean house.
| NoImmatureAdHom wrote:
| >I get the feeling it will end badly.
|
| Agreed.
|
| As to the question of who has that kind of money: you're
| talking about income from employment, not assets. Maybe
| there are a lot of people with assets that put them in
| reach of PS2-3M homes. And of course there are foreigners
| who don't work in the U.K., like Saudis, Russians, and
| Chinese.
| ryan93 wrote:
| I think people have just increased the fraction of their
| income they are willing to spend. If people in Austin will
| spend 50% of income instead of a third prices can go up a lot
| itsoktocry wrote:
| > _If people in Austin will spend 50% of income instead of
| a third prices can go up a lot_
|
| Exactly this. Somewhere along the lines in the past decade
| or so, it became completely normal to lend people 10x their
| income to buy a home, when historically that figure was
| 3.5x.
| tayo42 wrote:
| People over spending is the only thing that makes sense
| Bombthecat wrote:
| Yes, this.
|
| There was a question why people want to move to Munich even
| though it is the most expensive city in germany.
|
| Answer : because it is a city! Disco, cinema, stuff to do
| in your free time.
|
| And more and more people are willing to sacrifice 2/3 (or
| more) of their income just to live in the city. (also part
| of the first question)
|
| So, i dont see rent going down anytime soon.
|
| And if there will be a recession, even more people are
| willing to sacrifice everything, just to move to the city.
| Nbox9 wrote:
| A lot of extra money was slushed around the economy in the
| last 2 years. Who has money to spend? Anyone that owns stocks
| or real estate.
| AndrewKemendo wrote:
| Yes! This has been my nagging question for years too.
|
| I make 5x the median wage in my county and my county has the
| second highest wage in the US.
|
| I see all these $M houses being sold left and right and I'd
| never feel comfortable buying a $M plus house. What gives?
| bregma wrote:
| Now is the time to begin the discussion on shorting real
| estate.
| pixl97 wrote:
| Attempting to time the market is a great way to go
| bankrupt. The market can remain irrational longer than
| you can remain solvent.
| Vadoff wrote:
| Inflation/printed money + stock market prices going through
| the roof.
|
| If you don't have significant capital in investments,
| you're getting hosed.
| ButterWashed wrote:
| I know people living in London where prices are insane who
| secure a mortgage without ever intending to pay the full
| term. They buy a property, live very conservatively in the
| hope the prices go up and use that extra boost to move out
| of the city.
|
| If prices on an investment rise more than inflation 90% of
| the time why wouldn't you buy it?
| sgt wrote:
| I feel bad for the people renting in London. Most people
| I know there simply can't afford buying as it is
| prohibitively expensive (>300k pounds I think?)
| lotsofcows wrote:
| That's for England. London is more like >GBP500k.
|
| https://lginform.local.gov.uk/reports/lgastandard?mod-
| metric...
| leehuffman wrote:
| A ~14 year bull market, interest rates, and the last
| decade+ of appreciation on real estate. Everyone is flush
| with cash and borrowing money against a home is free.
| hnick wrote:
| If you already own a home that appreciated to $800k+ then
| trading in to buy at $1M doesn't seem as bad.
|
| Prices seem silly to me here too (Australia) but a lot of
| it seems to be a combination of the perception that house
| prices just always go up, so you have to "get on the
| ladder" as they say and trade your way along. Each step
| doesn't seem to be a huge investment in itself. If you
| don't hop on, then you get left behind.
| sgt wrote:
| But that means moving all the time. Yes you will trade
| yourself to the best house in the end and perhaps to a
| much better neighborhood, but moving can be a bit
| traumatizing...
| hnick wrote:
| One option is to move as you change jobs.
|
| But tax law here also makes loss-making investment
| properties attractive to people, and borrowing against
| equity is another thing. Interest-only loans (as interest
| is a deductible investment expense), plus other expenses
| (all the better if it's in a nice holiday destination so
| flights and hotels to "inspect the property" are
| deductible), resulting in a minor loss on rent, which is
| offset against your primary salary and other investments.
|
| Negative gearing like this allows people to basically
| zero out a house on the balance sheet and move on to
| buying another. Let it appreciate for a few years and
| you're ahead. Be a major voting base and politicians
| won't dare ruin your gravy train.
| netjiro wrote:
| If the buyers' dogma is that the housing market will always
| go up, it is a great deal to buy/build very expensive
| houses. They will always appreciate.
|
| Reality will disagree at some point.
| Nbox9 wrote:
| Everything has skyrocketed. Specifically when you are in the
| middle of a construction project you need to get all of your
| materials to a worksite at a specific time, there's very little
| schedule flexibility. This means they are outbidding people
| that do have schedule flexibility.
|
| The housing market has cooled and you can get some good deals
| now, but in 60months we'll back in a growth market. There
| simply isn't enough supply to keep up with demand. People keep
| having kids, cities keep limiting housing density, suburbs can
| only sprawl so far.
| tejohnso wrote:
| > people will be clamoring for HELOCs as they won't be able to
| sell these $700k houses they're buying
|
| Why would you want a HELOC just because you can't sell your
| house for a profit?
| zdragnar wrote:
| Around 15 to 20 years, houses start to need expensive
| maintenance- new appliances, perhaps siding or roofing if
| you've had a rough run or it was poorly installed, etc.
|
| If you are unable to sell the house and don't have a nice
| savings cushion, you need to look at a HELOC to pay for it.
|
| Since sellers often pay real estate agent fees and some
| others, you need a pretty decent sale price above what you
| owe on the mortgage just to break even... And then money for
| moving costs and a down payment on wherever you go next.
|
| Edit: it is also not uncommon to take out a HELOC to pay for
| sprucing up a house- flooring, new kitchen, etc- if you are
| struggling to attract any buyers at all. I've known people in
| smaller towns go into debt just to sell their house because
| they had to move for a job. They even tried renting it out
| for awhile since noone was buying, and the renters ended up
| trashing the place, so that made it even harder.
| PragmaticPulp wrote:
| Common practice in construction industry is to overcommit to
| too many projects, then raise prices until the most cost-
| conscious customers drop out. Now you're only left with the
| customers willing to pay the highest prices.
|
| It's not really about lumber prices. It's about finding the
| highest construction prices that the market will bear. Can't
| find the limit until you push so hard that some customers start
| dropping out.
| klipt wrote:
| So basically an indirect auction mechanism?
| tomrod wrote:
| General price discovery. Not too different, but auctions
| would have multiple people bidding on the same unit, rather
| than simply the same build plan here.
| TeMPOraL wrote:
| Ah, another type of market assholery. Price discovery
| mechanism that's free for the builders, but very expensive
| for the would-be customers. About as nice as grading on a
| curve.
|
| I wonder if there's a space for business for an intermediary
| who would take on multiple builders for your single home,
| wait for them to do their price discovery dance, and then
| drop every one of them except for the cheapest one.
|
| Disrupting schedules isn't free for customers either.
| 20after4 wrote:
| An intermediary like the mob, perhaps?
| TeMPOraL wrote:
| Do mobs do this?
|
| No, I meant a legitimate intermediary. If builders get to
| overcommit and then cancel on their customers, why
| shouldn't a customer be able to do it too? The
| intermediary would just offer a service of doing that for
| you - booking multiple companies for your construction
| project, waiting until the last second, and cancelling
| all but one.
| roenxi wrote:
| > If builders get to overcommit and then cancel on their
| customers, why shouldn't a customer be able to do it too?
|
| Why couldn't they? I'd imagine the only problem is it is
| an ineffectual strategy for a client. There is a lot of
| money involved, people are already doing everything they
| can think of to get the lowest price.
|
| It is absolutely a dick move to lead someone on, but in
| the grand scheme of things a minor problem. Construction
| is a mess of problems.
| op00to wrote:
| Builders often require a nonrefundable deposit to
| purchase materials prior to the start of a job. That's
| where the squeeze happens, after you've already selected
| your contractor.
| TeMPOraL wrote:
| Huh, so they overcommit, accept deposits, then force some
| of those customers out - do they return those deposits
| then? If not, how is this not criminal?
| wccrawford wrote:
| Because the customers are the ones quitting, they forfeit
| the deposit by their contract.
|
| The developers aren't held to a timeline in the contract.
| They just stall forever, working on the ones willing to
| pay the most. If they ever ran out of better customers,
| they would eventually get around to the cheaper
| customers.
|
| They've done something unethical, but they haven't broken
| the contract.
| TeMPOraL wrote:
| Right. But to the extent the developers are doing this on
| purpose, as part of their business model, this very much
| feels like a racket.
| pixl97 wrote:
| The only reason they developers can do this is there is a
| lack of people that can build houses creating a non
| competitive market. A huge portion of US home building is
| built on migrant labor which has been in short supply
| since 2016 and even further pressure from covid. Moreso
| housing is a boom bust style market that squeezes out
| competition during busts and increases prices during
| booms. This is how supply and demand curves work in this
| market.
| ClumsyPilot wrote:
| Systematically getting people to hand over money when you
| have no intention to deliver on and have no intention to
| return is probably fraud.
| ransom1538 wrote:
| "I wonder if there's a space for business for an
| intermediary who would take on multiple builders for your
| single home, wait for them to do their price discovery
| dance, and then drop every one of them except for the
| cheapest one."
|
| Having worked with subcontractors a race to the bottom is
| not a good plan. IMHO subcontractors cost is directly
| proportional to experience. Simple unseen things will get
| missed eg: wrong type of drywall in the bathroom.
| technothrasher wrote:
| > then raise prices until the most cost-conscious customers
| drop out.
|
| Typically they don't even care about customers dropping out.
| They just work down their list from the highest quotes to the
| lowest. The customers who were quoted a low price simply
| never get their job started unless work dries up for the
| contractor.
| itsoktocry wrote:
| > _There may be 'blowout' prices on lumber itself, but around
| here I'm not seeing any 'blowout' prices on new construction in
| the short term._
|
| Lumber is but one input cost. Labour is another, and it's still
| in short supply.
|
| > _but I think there 's simply some "get high prices while you
| can"._
|
| Well, builders are under no obligation to provide services at
| cost plus.
| legulere wrote:
| If you wait for a bit longer you will see prices rise again and
| then fall again until the market finds back its equilibrium.
|
| This is known as the bullwhip effect:
| https://en.m.wikipedia.org/wiki/Bullwhip_effect
| mrleinad wrote:
| That looks a lot like a stock market pattern (and it makes
| sense it does)
|
| Do you know about any books that might expand on the subject,
| maybe mentioning other effects?
| grumple wrote:
| Not a book, but this was mentioned in some comments section
| on HN recently: https://www.shmula.com/the-bullwhip-
| effect/310/
| 99_00 wrote:
| Lumber prices peaked the day after a story about Lumber prices
| made the front page of hacker news.
|
| https://news.ycombinator.com/item?id=27788549
| nebula8804 wrote:
| Your link leads to a blank page
| quickthrower2 wrote:
| You need to be logged in with the show dead profile option to
| see it.
| 99_00 wrote:
| This is what was in the post. The imgur link seems to be dead
| now too.
|
| Lumber mania is sweeping North America (May 6, 2021. 119
| points) https://news.ycombinator.com/item?id=27036557
|
| Lumber price peaks May 7, 2021.
|
| https://imgur.com/ynWJtwQ
|
| source: https://www.nasdaq.com/market-
| activity/commodities/lbs
|
| The lumber bubble burst. Here's what comes next (June 22,
| 2021)
|
| https://fortune.com/2021/06/22/lumber-prices-bubble-burst-
| pr...
| Pxtl wrote:
| So will any of the inflation doomsayers notice? Econimists were
| specific: inflation halted in 2020 but will have a small jump in
| 2021, but most of the extreme price shocks are supply chain
| issues and not inflation. That has born out with lumber.
| chovybizzass wrote:
| hopefully this happens with everything.
| Fiahil wrote:
| What bothered me the most during this whole episode, is that the
| prices also skyrocketed, here, in Europe. We had nowhere near the
| same need for wood as north-american constructions.
| Revell wrote:
| That's mainly because we started exporting most of the wood to
| North America, creating our own shortage here in Europe. Hence,
| prices went up here too.
| teekert wrote:
| Because the markets are connected? If you have lumber, why sell
| it on the cheap to Europeans when you can get more from the
| Americans?
| skybrian wrote:
| Transportation costs seem high:
|
| > It's difficult to ship lumber overseas cost effectively:
| lumber is (or was) one of the least expensive materials on
| the planet. At $300 per 1000 board feet (the average price
| over the last 25 years), a 20 foot shipping container holds
| just $4500 worth of material. The cost of transporting a
| container across the ocean is $1700 dollars or more.
|
| https://constructionphysics.substack.com/p/lumber-price-faq
| Ekaros wrote:
| And my understanding is that real shipping rates are
| currently much higher than the 1700... As are all shipping
| rates...
| Fiahil wrote:
| Shipping is so expensive, if you start shipping wood instead
| of sourcing it locally, then no wonder the price is going to
| go up even faster.
|
| What should have been a good alternative here, is to
| prevent/taxe massively exports of wood from EU to NA. Prices
| would have stagnated near a peak in NA and we would have kept
| our wood supply at a moderated price, here.
| thedougd wrote:
| On the contrary, wood is shipped from the US to Europe for
| energy. This is Long Leaf Pine, one of the species commonly
| used for framing homes in the US.
|
| https://www.newsobserver.com/news/business/article238395173
| ....
| https://www.politico.com/news/magazine/2021/03/26/biomass-
| ca...
| hindsightbias wrote:
| Krugman was right again.
| dystopiabreaker wrote:
| ah yes, guy who predicts the euro will fail every 2 years, and
| who predicted that the internet would be a fad, right again
| bildung wrote:
| I've been reading Krugman regularly for the last decade and
| can't remember him saying anything like this. Feel free to
| provide a source.
| motohagiography wrote:
| Right about what though? He's like the Piers Morgan of
| economics, so he could use the win.
| riffraff wrote:
| Not op, but presumably: that spikes in prices where temporary
| bounce backs rather than structural switches to high
| inflationary years.
|
| Which is also the view of the Fed and the ECB, so not a
| particularly weird position from Krugman.
| question002 wrote:
| Duh, stories about the "lumber shortage" were obviously industry
| plants trying to raise prices. It's just so crazy that people are
| played on this site so easily.
| maybenotafart wrote:
| idk its still almost 1.5x as expensive for a 2 by 4 at home depot
| Kluny wrote:
| The only price I watch is 2x6x10 cedar. They were up to $51
| back in April, now they're back down to $33. Still seems high
| but good enough for me to get back to my projects.
| kevin_thibedeau wrote:
| Let's hope copper follows suit. I need to buy some heavy gauge
| wire.
| cowshit wrote:
| oh you already banned me over notthing FUCK HACKER NEWS
|
| FUCK HACKER NEWS
|
| FUCK YOU
|
| FUCK YOU
| exabrial wrote:
| I'm really happy Democrats/Republicans didn't try to "fix" the
| lumber crisis along with everything else they've completely
| f#@*ed. Let the free market ride! This is incredible news for low
| income families that have been waiting to build residences but
| were constantly priced out of market.
| jedimastert wrote:
| > low income families that have been waiting to build
| residences
|
| I don't think building has been an option for low income
| families for a _while_ , or maybe I just know of very few
| markets where land was the limiting factor instead of materials
| & labor.
| exabrial wrote:
| Land is pretty cheap in the vast majority of places. Land in
| coastal cities is not.
| danans wrote:
| Even in the places where land is "cheap", it's only cheap
| for middle to higher income people in that area, or people
| doing income / wealth arbitrage from expensive areas. It's
| not cheap at all for lower income people from the cheap
| area.
| omgwtfbyobbq wrote:
| Prices have already stabilized at the local big box hardware
| store. 2x4x8s were below $2 a month ago and are back to $3.50+
| bastard_op wrote:
| Oh, so _now_ you want to make a deal instead of just rape and
| pillage the proverbial market...
| smabie wrote:
| What? People sell shit for what people will pay for the shit.
| xnx wrote:
| Multi-year chart of lumber prices puts some of these
| "skyrocketing" and "cratering" headlines in perspective:
| https://tradingeconomics.com/commodity/lumber
| 3minus1 wrote:
| I just want to express appreciation for your comment. I don't
| know why the news article wouldn't include a chart like this,
| but I'm glad you posted it.
| NikolaNovak wrote:
| I like the chart, but it's exactly what the article indicated,
| no?
|
| Article indicated It went up to 3 times the price and is now
| down to pre rocket prices. Charts seem to agree?
| da_chicken wrote:
| Because sometimes "skyrocketing" means going 1% over the
| average annual high, or "cratering" going 2% below widely
| published analyst forecasting.
|
| In other words, the media is often radically hyperbolic to
| get clicks and ad views. So much so that when they use the
| same adjectives _correctly_ they don 't carry any weight
| anymore.
|
| They're the boy who cried wolf.
| arthurcolle wrote:
| Average annual high (I'm assuming you're using the stock
| price daily high from a multi-year set of highs from its
| daily OHLC bars as the 'high' here) is a poor metric to
| evaluate whether or not a company is doing well. Low beta
| stocks usually don't really outperform so I mean you need
| to just optimize for low correlation, high relative
| outperformance vs. a sector wide index or something.
|
| I just don't think the random numbers you asserted are real
| at all - this would be something that one would need to
| test.
|
| Anyone getting their 'market moving news' from
| BusinessInsider/financial news sites is doing it wrong.
| da_chicken wrote:
| The entire point was that the metrics I chose were bad.
| Furthermore they were such minor differences that even if
| they weren't bad they still wouldn't be relevant. They
| were intended to be comically useless.
|
| It means that the hypothetical author of the article
| didn't have any idea what they're reporting, which is
| exactly what I was trying to express. The authors rely on
| the readers' ignorance and the way many people
| reflexively accept numeric data as true, pertinent, and
| sufficient evidence of any claim.
| arthurcolle wrote:
| Sorry about that - just saw the article and immediately
| started hyperventilating/wanted to vent as a child
| comment with someone that also seemed to 'get it' haha...
| cheers
| scottLobster wrote:
| I wouldn't define "returning to historic norms" as
| "cratering". Would you define a plane landing smoothly on a
| runway, even after a steep dive, as "cratering" the runway?
| NikolaNovak wrote:
| I guess it depends but to me cratering is more about slope
| of the curve than its final destination. So I can see a
| plane barreling or diving or catering down, before pulling
| up on the runway...
| [deleted]
| JohnJamesRambo wrote:
| I don't understand your comment and scare quotes, do you think
| a quadrupling in price of a commodity is not skyrocketing?
|
| That's a cool website thank you for sharing it.
| marricks wrote:
| Cratering seemed like it deserved "scare quotes" though, this
| trough is still one of the highest prices of wood compared to
| almost any time before 2017.
| vmception wrote:
| "Prices crash to pre-pandemic levels 18 months ago"
| [deleted]
| hoppyhoppy2 wrote:
| Perhaps they were just quotation marks rather than scare
| quotes and they genuinely wanted to show how wild the price
| fluctuations have been. Cynicism abounds on the internet, but
| people are still sometimes genuine.
| xnx wrote:
| Thanks. I'm legitimately quoting, but also prefer use of
| more specific terms like "tripled" or "fives times more
| expensive" etc. than common dramatic headlines words like
| "crushed", "slammed", "blasted", "surged".
| Torwald wrote:
| I think some of those dramatic terms are more specific,
| if and when the described occurence is something very
| unusual. Then they convey (if choosen right) the
| unusualness and thus gain a higher information density
| for the outsider.
| Kiro wrote:
| The chart you linked was way more dramatic than I
| imagined when I read "skyrocketing" and "cratering".
| pcl wrote:
| Well, the y axis is not anchored to zero.
| Kiro wrote:
| It is if you click on All or 25Y.
| chejazi wrote:
| Don't forget "soared" and "plunged", used practically any
| day the market moves more than a hair.
| pram wrote:
| Most (maybe all) of those market action articles are
| written by bots so I assume they intentionally prefer
| provocative words for click bait
| jimt1234 wrote:
| half-percent drop = "eviscerated"
| hallway_monitor wrote:
| It's interesting to pay attention to the verbs chosen to
| describe things done or said by politicians
| exporectomy wrote:
| Yep. One of the ways reporters mislead people while
| remaining factually correct. Then they blame factually
| incorrect news as destroying society while they're just
| doing the same thing more tactfully.
| IIAOPSW wrote:
| "factually incorrect news" is not the same thing as "fake
| news". Fake news is like a fake Rollex. The correctness
| of the time on the dial isn't the thing that makes it
| fake. Fake news is fraud without the monetary
| connotation.
|
| If I went and lifted the NYT CSS files and registered
| some intentionally misleading domain / company name like
| "Times of New York", I could go around saying whatever I
| want and a good number of people would believe it. Fake
| news is worse than wrong, its divorced from reality.
| There never was a journalist trying to get it right to
| begin with. Fake news is a click farm in Macedonia, not a
| news outlet that made a mistake.
|
| See also: "deep state" (which has now been bastardized to
| mean "shadow government").
| TeMPOraL wrote:
| Well, sure. So "fake news" is like a fake Rollex. But
| then, what the "regular" news are is a genuine Rollex,
| except the company secretly swapped out internal parts
| for low-quality, less-precise but much cheaper ones, and
| are selling the watch for the same price, with the same
| SKU[0].
|
| Sure, buying the genuine watch supports the IP holders
| and gives you bragging rights, but both the genuine and
| the fake are bad choices when you're looking for a high-
| quality, durable and precise watch.
|
| > _There never was a journalist trying to get it right to
| begin with._
|
| By this standard, regular news would be fake news too.
| You don't get manipulative language in the article when
| someone is trying to "get it right" - it only shows up
| when someone is trying to _get it wrong, on purpose_.
|
| --
|
| [0] - I.e. what computing hardware and home appliance
| vendors do all the time.
| IIAOPSW wrote:
| There's legitimate gripes you can have with news, but you
| can't say they don't literally send a person out to
| conduct interviews and whatever. "Fake news" isn't just
| less precise or some subjective quality issue about the
| internals of the organization There is no internals.
| That's the part that's fake.
|
| Fake news is like the man at the store told you it wasn't
| ticking because it just needs to be wound up, wouldn't
| let you take it out of the box, and you got home with it
| to find the dials are painted on and the inside is a few
| coins glued together. Whatever legitimate gripes one may
| have about Rollex cutting corners, it would be laughable
| to pretend like the time on their dials is just as
| useless as the ones painted on the fake watch and really
| its all just an opinion which one is "real".
|
| What do you call something that looks deceptively like a
| watch but is actually just a prop? I'd call it a fake
| watch. What do you call a website that looks deceptively
| like a news organization but is actually just outrage
| headlines made from mad libs for clicks? I sure wouldn't
| call it real news.
| rendall wrote:
| Except sports headlines. I like them in sports headlines.
| JohnHaugeland wrote:
| those aren't scare quotes. they're just quotes.
| Kiro wrote:
| No, they are scare quotes as the poster admits in another
| comment.
| jrek wrote:
| The poster said "I'm legitimately quoting", which doesn't
| sound like an admission to me.
| Kiro wrote:
| Read the next part of that sentence.
| JohnHaugeland wrote:
| "Thanks. I'm legitimately quoting, but also prefer use of
| more specific terms like "tripled" or "fives times more
| expensive" etc. than common dramatic headlines words like
| "crushed", "slammed", "blasted", "surged"."
|
| Doesn't seem to support your claim that these are scare
| quotes at all.
| kortilla wrote:
| No, that's not really skyrocketing if your point of reference
| is other volatile things (stocks, crypto currencies, etc).
| HeadsUpHigh wrote:
| Your point of reference for a commodity should be the
| amount of money the buyers who need the commodity have.
| kortilla wrote:
| They clearly have a fuckton because they supported the
| price rally all of the way up.
| JimTheMan wrote:
| It's skyrocketing for a real good that people consume in
| the everyday of industry.
|
| Not some silly fantasy speculation good, like crypto or...
| overvalued stock.
| lamontcg wrote:
| Yeah I don't have much of a quibble with calling those
| prices as being "skyrocketing" particularly if you look
| at the 25 year history. Those prices were very high.
|
| Although it just "cratered" or "crashed" back down to
| entirely normal. Doesn't look like there's any oversupply
| glut causing it to overshoot to the downside. Lumber
| companies will have to learn to make do with charging the
| same prices they charged before the pandemic.
| kortilla wrote:
| "skyrocketing" is a subjective term. It doesn't matter if
| it's something consumed every day. What one person
| considers sky rocketing for a price will be different
| than another.
|
| > Not some silly fantasy speculation good, like crypto
| or... overvalued stock.
|
| Apple is not a "silly fantasy speculation good" anymore
| than a lumber futures contract.
| [deleted]
| fouc wrote:
| The 25Y chart looks interesting, a reversion to the mean.
| Prices finally came back to the normal range.
| OneLeggedCat wrote:
| Prices have NEVER been this low since like, June of last year.
| [deleted]
| godelski wrote:
| To me what is interesting is comparing to other commodities.
| For Iron you see a similar pattern to lumber. Copper and steel
| boombed but are only starting to turn now. Is there a lag
| between raw materials and more refined materials? Silver and
| gold similarly, though gold has fallen harder. I'm guessing
| because of all the doomers that buy gold when the economy dips.
| I don't know how to analyze wheat. And crude oil just flash
| crashed. Like literal flash crash.
|
| I wonder if anyone knows the reasoning behind these different
| patterns.
| [deleted]
| bcrosby95 wrote:
| Note that you can't just cut down a tree and make lumber out
| of it. You have to dry it out first, which, afaik can take a
| long time.
|
| I don't know about the other stuff though.
| rfrey wrote:
| Most construction lumber is kiln dried in less than five
| weeks.
| philistine wrote:
| Five weeks is a fucking long time !
| rfrey wrote:
| Yeah, somebody should really teach them about scrum.
| XTreme sawmilling.
| gotorazor wrote:
| There isn't that much excess kilns to dry lumber. They
| have to be of a certain standard -- especially if they
| are graded.
| kortilla wrote:
| There isn't a common theme really because these things are
| nothing alike. Oil crashed because there was a glut and that
| toxic sludge needs special infrastructure to store it.
|
| You can store a million dollars of gold in a suitcase. A
| million dollars of oil at $10/barrel (the price right before
| the crash) is 3.5 million gallons of oil that has to be
| stored somewhere. And on a physical delivery futures contract
| you've agreed to take that delivery.
|
| 99.999% of oil traders are incapable of taking or providing
| delivery for settlement because of this and what you
| witnessed was nobody wanting to get caught holding the bag.
| godelski wrote:
| Sorry, I'm not trying to say that these things are alike.
| I'm more curious about the socioeconomic that drive these
| commodities in different ways. I guess since everyone is
| telling me that they are different means this point didn't
| come across. I thought it was obvious since they didn't
| move in the same manner and I was pointing out different
| effects to begin with.
| willvarfar wrote:
| That's a very cool site!
|
| When I click on the 25Y and 'all' views, it definitely looks
| like a hockey stick.
|
| Ergo the popular narrative of lumber prices has been accurate.
| baybal2 wrote:
| I think it was good for America. Americans finally started to
| seriously transition to steel thanks to that.
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