Lumber price inflation helps drives up California North Coast construction costs


Sandy Bird, who owns the company and has been in business for 40 years, was one of the first women to get a contractor’s licenses in Marin County. She has seen the ebbs and flows of the remodel business through the decades, with what’s happening now being off the charts.

Windows and doors are taking longer to arrive. Engineered flooring mostly comes from China and is being impacted by tariffs. Sheet rock and concrete all cost more than a year ago. Prices are easily 20% higher than in early 2020, Bird said.

A consequence of haphazard arrival times for goods is the lack of space to store all the inventory. Contractors are used to product arriving as it’s needed. Bird is asking clients to store goods until it can be used because she doesn’t have the space to keep it.

Another factor slowing down the process for Sandra Bird Designs is the amount of time it takes to get a building permit.

“For a bathroom remodel we did in Corte Madera it took eight to 10 weeks to get the permit when normally I would get it right at the counter,” Nave said. Municipal government offices are still operating in COVID mode, thus adding constraints to the building industry and others.

The solar industry is also hurting from escalating prices from suppliers, with copper wiring being the main commodity.

Beginning in January 2020, California mandated all new home construction come with solar.

“The copper value in January compared to now has tripled,” said Ben Goldberg of Simply Solar California. The Petaluma-based company has 90 employees who work throughout the Bay Area. “It’s the large commercial projects where it’s adding tens of thousands of dollars to a half-a-million-dollar project.”

A quote Goldberg just did in McKinleyville in Humboldt County for a 40,000-square-foot project is $30,000 more than it would have been late last year.

For now, residential solar projects are less impacted because the square footage is not as great. Prices there might be up about $100 compared to six months ago.

Goldberg blames the pandemic for the cost increase as well as the North Bay fires over the last few years for adding to the demand in solar on new-home construction.

Lumber price inflation is particularly bad

“First of all the lumber thing is just ridiculous. If we are able to get lumber, it is so far out in the stratosphere. It is not remotely close to anything I’ve seen,” Christopherson with Christopherson Properties said. He’s been in the home building business for 42 years, with most of the work in the greater North Bay.

On April 24, 2020, he paid $364 per thousand board feet. On Nov. 20, 2020, it was $651, on Jan. 22, 2021, $898, and on March 26, $1,096.

While he acknowledges closure of the mills starting last spring brought the supply chain to a halt, Christopherson is not convinced that is the only factor affecting lumber prices.

“It is a commodity, so I smell Wall Street buying futures,” he said. “But that is a hunch.”

Mark Labourdette, owner of Design/Build Specialists Inc. in Novato, worries that an economic bubble may be forming.

“It’s everything — stock market is out of whack, the supply chain is out of whack, tariffs are out of whack, shadow banking industry is out of whack,” he said. “It’s like everything is on a tilt at the same time. And the government is pouring trillions of dollars into the economy. My gut is (the downturn) could be as severe as 2008—’09, and I’m an optimist.”

His firm that combines architectural and building services is focused mostly on remodels.

“We are doing kitchen remodels for $300,000. The days of a $75,000 kitchen remodel is now $150,000; the days of a $20,000 bathroom are now $50,000,” Labourdette said. “Not a single person is batting an eye about anything. People have been living in their home and staying in their home for the last year. They know what needs to be done.”

Christopherson gets his lumber from Central Valley Lumber, which has seven locations mostly in the North Bay. That company also expects prices to remain high.

“We are reforecasting to August for when we see prices coming down, but I don’t think it will be a huge swing — maybe a few hundred dollars per thousand,” Reschke with Central Valley Lumber said. “I think what will bring a big change is bigger than the industry. Something will happen nationwide, something in the economy.”

Arata at Healdsburg Lumber said, “It’s one thing when prices go up five, 10 bucks a thousand board-feet. But now it’s adding $50,000 to $70,000 to a house.”

Lumber prices affect more than framing for house construction. It’s roofs, decks and fencing.

“One of the things that is really hard to get is the trusses for the roofing,” said Jose Jimenez, owner Jimenez Construction in Rohnert Park. “You have to order them like six months before you start. Two or three years ago you ordered them when you started the job and it arrived right on time.”

Goldberg with Simply Solar California is also in the roofing business.

“On the roofing side the biggest thing is lumber itself has gone up, but plywood has tripled in less than six months. That is literally one of the biggest expenses for us,” he said. “We are almost installing roofs at margin. We are barely breaking even.”

A standard 1,800-square-foot home would have about a 22-square-foot roof. Today just for the plywood Goldberg would need to charge $4,200, while last fall and the end of summer it was $2,000.

The added expenses are making home projects less affordable for many.

“A homeowner who just wants to redo a fence it was $1,200 last year and now all of sudden due to lumber and even the labor aspect of it could be five or six times that price,” Arata said. “It affects the middle and lower classes much more than the higher classes.”



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