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Shortage of lumber due to coronavirus pandemic pushing home prices even higher
Experts say the pandemic resulted in the closure of some lumber companies as a way to combat the spread of the virus, meaning there is now a lumber shortage.
PHOENIX - Despite the ongoing COVID-19 pandemic, the housing market is skyrocketing as more people from across the country are looking to buy and build in Arizona.
"Throughout April, it was kinda slow. Things start picking up in May, just before the Governor signed off on things reopening, and things have grown. They have topped out around mid [August]," said Jim Belfiore, President of Belfiore Real Estate Consulting. "In terms of demand, we are still [at a] very high level. We are above where we were [back in] 2006."
According Belfiore, it’s not expected to go down anytime soon.
"We should see demand remain healthy," said Belfiore. "Homeownership rate is increasing. We are up three percent from where we were three years ago, so it’s growing rapidly. I expect a lot more homeowners going out and purchasing."
During a time when construction is booming across Arizona, companies have come across a dilemma: a shortage in lumber that is causing their prices to rise.
"They’re up 15% last month," said Belfiore. "They are at all time high, and the reason for that is that during COVID, early part of COVID, lumber houses closed down due to concerns over the disease spreading, concerns housing demand falling. Housing demand came back much more rapidly than expected, and now, there is a shortage in lumber."
Valley contractor Rod Cullum says many lumber companies shut down in March and April, and some remained closed even longer.
"Of course, supply and demand, price goes. Very much like the masks," said Cullum. "We’re trying to find lumber now in an industry that is blooming, and they shut down for a few months and we’re just trying to make up that curve."
Despite the lumber shortage, Cullum says he’s had two record months in gross sales, but he still has his concerns.
"Owning a contracting company, I’m worried about getting the right people on the team, heavy enough labor, and frankly, getting supplier," said Cullum. "We have been customers of great lumber companies for many years, and fortunately, we’ve been very well taken care of and we are getting our lumber supply, but there are builders out there that had slabs ready and can’t get the lumber."