A Lumber Playbook

Headshot Final__Ken Perlman

Ken Perlman

Lesley Deutch

March 5, 2021

Lumber prices are at an all-time high, driven up by surging demand amid a supply chain coordination squeeze, production limitations, and a pesky beetle.

How did we get here? Here are the top events and conditions affecting the lumber market:

We expect lumber prices will remain elevated into 2022, but lower than today’s extreme rates. Capacity takes time to bring online. We are aware of six mills restarting or adding capacity, but we estimate it will take them 6–18 months to ramp up production.

In the meantime, alternatives emerge. Here are a few on our radar:

  • Stamped concrete slab or pavers instead of raised decks: This alternative reduces or eliminates the need for treated lumber, decking, and hardware.
  • Concrete block construction: Done right, block-constructed homes are quiet, comfortable, and long-lasting. Block can retain daytime warmth from the sun into the evening, which is great in winter weather conditions.
  • Precut or prefab framing: Waste and inefficiency of precious materials can be reduced to miniscule levels with an industrialized approach.
  • European lumber: Research shows imports from Europe are increasing and could grow even more if producers obtain the grade stamps in like-kind for North American structural use and substitution.

For more inspiration, see our IBSx 2021 Show Village New, New Home” collaboration. It could be built using any or all of the above and you would never know the difference from traditional framing.

We will be diving deeper into these strategies during future New Home Trends Institute events.

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About The Author

Ken Perlman
Managing Principal, Consulting
Ken works with real estate executives to help them make appropriate strategic decisions regarding their residential communities, including for-sale and rental of all types. He has a particular specialty in large-scale master-planned communities.
Lesley Deutch
Managing Principal
Lesley has more than 25 years of experience consulting with executives in the finance and real estate industries throughout North America. She works across a wide spectrum of industries including apartments, for-sale housing, high-rise development, urban projects, single-family rental, building products, and commercial developments.

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