After drifting lower from mid-September to mid-November, lumber prices are on the rise again. Prices peaked at an all-time high of roughly $950 per thousand board feet in September before gradually moving down to around $550 per thousand board feet last month.
However, according to Random Lengths, lumber prices are now above $650 per thousand board — up nearly 20% over the past four weeks.
Elevated lumber prices since mid-April have added thousands of dollars to the cost of new single-family homes and apartment units.
Indications are that lumber producers are reducing production heading into the slower winter building season, even as new residential construction continues to outpace seasonal norms.
However, there is some good news on the lumber front regarding tariffs on Canadian softwood lumber.
The U.S. Commerce Department’s International Trade Administration published an administrative review of anti-dumping duties in late November, followed by an administrative review of countervailing duties on Dec. 1.
The effect of the reviews is that duties on shipments of Canadian lumber into the United States, which currently stand at 20%, will be reduced by more than half, to roughly 9%. The tariff reductions are expected to go into effect in mid-December.
“This is a step in the right direction, as tariffs have contributed to unprecedented price volatility in the lumber market, leading to higher prices and harming housing affordability for American families,” said NAHB Chairman Chuck Fowke. “The United States needs to work with Canadian officials to end the tariffs and achieve a long-term, stable solution in lumber trade that provides for a consistent and fairly priced lumber supply.”
NAHB continues to work on all fronts to find solutions that will ensure a lasting and stable supply of lumber for the home building industry at a competitive price.
Registration is open for IBSx, the new International Builders’ Show® virtual experience from NAHB. The in-person event was transitioned to a virtual show due to health and safety concerns surrounding the COVID-19 pandemic.
This online alternative to IBS, the most comprehensive business-building event in residential construction, will showcase the most innovative new products, offer live and semi-live interactive education sessions with on-demand recordings, feature creative networking opportunities such as live chat and one-on-one meeting requests, and much more. Registrants can participate in all of the IBSx offerings, Feb. 9-12, from 10 a.m.-6 p.m. ET daily.
“IBS has always been the premier show of the industry, and this year is no exception. While this year’s show is a different format than our attendees are used to, we think they will really be impressed with the new offerings and top-notch industry access they have come to expect,” said NAHB Chairman Chuck Fowke. “NAHB is excited about the new IBSx virtual experience where participants can log in and have access to innovative product demos, networking opportunities and education sessions — all available from home or the jobsite, on-demand and when they want the information.”
The week will kick off with a special keynote address from well-known television host Mike Rowe. Participants will also be able to stay on top of the latest industry trends and exciting new product launches and demos through product areas such as the Home Tech Zone and Start-up Zone. Networking opportunities and one-on-one live meetings with top industry suppliers and service providers will also be part of the week.
Participants who register with an All Access pass can expand their skills and learn about a variety of cutting-edge topics offered in the more than 100 exclusive education sessions featuring top industry speakers. Another big draw of the week is the unveiling of NAHB’s official show homes, The New American Home® and The New American Remodel®, through a series of virtual tours and presentations. The homes are designed to showcase innovative building technologies, emerging design trends and the latest building products.
IBSx is not open to the public. Industry professionals should register at BuildersShow.com. Expo passes for the virtual event are free for NAHB members, and $50 for non-members. Early-bird pricing — available through Jan. 8 — for an All Access: Education + Expo pass is $199 for NAHB members and $299 for non-members.
Further details on the virtual offerings will be forthcoming. For more information on IBSx or the International Builders’ Show, visit BuildersShow.com.
Trends in design are inevitable. Some stay for a while, and others just last for a season or two. During the fall season, the trend toward design that elicits feelings of warmth and comfort is prevalent. And with the unwelcome addition of COVID-19 to our daily lives, there has been a trend to create multifunctional spaces that foster feelings of well-being. Merchandisers share how you can incorporate these trending design details into your projects and create positive vibes with prospective buyers.
As home buyers are looking more and more to their homes as a sanctuary, there is a trend to design with more natural and organic materials. Biophilic design and bringing in greenery with art, wall coverings, or plants into the design continues to be an important trend. And it makes sense when you consider the proven power of nature and natural elements in design. Organic, natural materials incorporated into design can reduce stress, blood pressure and anxiety, as well as enhance a sense of wellbeing.
GrandPeaks Copperleaf Clubhouse, photo courtesy of Lita Dirks & Co.
Parkwood Homes, photo courtesy of Lita Dirks & Co.
Taylor Morrison NEXTadventure Home, photo courtesy of Lita Dirks & Co.
Alliance Residential Lowry Park Clubhouse, photo courtesy of Lita Dirks & Co.
Creating a cozy, lush environment that promotes relaxing at home is something buyers will be looking for. Textural throws, layered area rugs, and chunky, oversized knit pillows are a great way to meet this expectation. Another fabric that can instantly give a cozy feel is velvet. Very few things say “cozy and safe at home” like velvet upholstered furniture.
We have discussed at length the importance of bringing the outdoors in, and to no one’s surprise, this will continue to be a trend this fall. As more buyers are spending more time in their homes, they want to know they have options for work and entertainment. They need to see that their living area is not limited to the four walls of the house. Bringing the outdoors in either literally by walls that fully retract or visually by floor to ceiling windows continues to be an important trend.
Fall traditionally spurs the trend for designs that promote warmth and comfort. This year is no different. In fact, we would say it is even more so with COVID as part our world (for now). Designing spaces that foster feelings of well-being is most definitely on trend.
In the wake of the COVID-19 pandemic, certain patterns and trends have begun to emerge in the housing industry — in particular, higher demand for housing in lower-density areas. How much of these trends, though, are actually a change in demand or behavior, or just a continuation of existing trends that may have been accelerated through COVID?
“When we think about the conversation around suburban and urban development, it’s really thinking about the extent the trends are on the curve, or if this is really a shift,” moderator Richard Gollis observed during NAHB’s recent The Future of Urban and Suburban Housing in the Wake of COVID-19 webinar. Gollis was join by panelists from NAHB, CoStar, Zillow and Toll Brothers Apartment Living, who presented information from various segments of the industry to highlight growing trends.
According to NAHB Chief Economist Dr. Robert Dietz, increased construction activity in lower-density markets was already occurring as part of the housing affordability crisis, with the COVID-related shift to telecommuting accelerating the trend as people have more flexibility to live outside of large metro areas. Supply can respond better in lower-density areas as well because of the lower cost to build, and may affect the size and design of single-family homes and types of multifamily projects being built in these areas as well.
The same can be said for demand for multifamily rentals, according to John Affleck, vice president of market analytics at CoStar. Supply and demand have geared toward the suburban markets — a trend already in progress pre-COVID — with suburban multifamily products comprising all the rental demand in the second quarter of 2020.
This has impacted rents, as historically expensive markets such as San Francisco, San Jose, Seattle and Boston have seen double-digit decreases in asking rents since their March peak. Meanwhile, smaller suburbs and cities such as Inland Empire, Calif. (a bedroom community of Los Angeles), Norfolk and Richmond, Va., and Memphis, Tenn., have seen rents increase between 3.6% to 5.3%.
Not every suburb is the same, though, noted Charles Elliott, president of Toll Brothers Apartment Living — both in terms of performance as well as mindset.
“The meaning of suburbs is very relative to people,” he stated, providing Toll Brothers’ success in the urban core of New Jersey — which can be considered a suburb of New York City — as an example.
Elliott predicts the urban and walkable suburban markets will come back strong because of rising interest among Gen Z, and also noted increased interest in second homes as a result of the increased flexibility of working from home.
Gen Z and millennials are key drivers in the real estate market, observed Svenja Gudell, chief economist for Zillow Group, as many millennials are reaching or have reached 34 — the median age of first-time home buyers. Those with the means to buy are facing an increasingly competitive market, however; although interested home buyers have been active, sellers have been apprehensive to put their properties on the market, leading to tight inventory and quick sales. Low interest rates are helping buyers, she added, but they aren’t going to make up for the extremely high prices.
Other trends to watch include the size of single-family homes, which had been on a decline but is likely to increase as people look to expand their available space. Flexible design will play a key role in that as well. Higher unemployment rates among younger age groups is also likely to have a lasting impact on the rental market, with an increased number of young adults moving back in with their parents as a result.
A replay of the webinar is available at nahb.org, and is free for members of the Multifamily Council and Housing Credit Group.
Despite what many believe, Gen Z and Millennials do want to become homeowners and they’re excited by the prospect. However, they face different obstacles than their parents and grandparents did. These challenges include lack of mortgage education, lack of suitable housing supply, and an unprecedented amount of debt that limits buying power and makes them fearful of taking on more. Any long-term effects on the attitudes and intentions due to COVID-19 are still unknown, but we have yet to see indications of major changes in sentiment.
In a 2019 Fannie Mae survey of homebuyers aged 18-34, 88% said they are confident they will achieve homeownership someday. But contrary to previous generations, their desire to be homeowners is more emotionally driven than financial. 80% say homeownership is the best way to make it on their own, and less than 50% say they want to use their home as an asset.
As for what they desire in a home, 69% say they are open to a smaller home as long as it meets their needs. According to the Joint Center for Housing Studies, between 2018 and 2023, there is expected to be a 7% rise in homebuyers who are single and a 6% increase in those who are married with no children, which may signal the need for smaller homes. Smaller homes, however, are in short supply, in comparison to the larger homes that previous generations sought. 63% also say that they are open to fixer-uppers but, despite their flexibility, only 31% believe they would be able to find a home in their price range.
Among their biggest struggles is the high amount of debt that plagues these generations, in part, due to the rising costs of higher education. According to Northwestern Mutual’s 2019 Planning and Progress Study, U.S. adults aged 18+ report having an average of $29,800 in personal debt, exclusive of mortgages. This could be one of the many reasons that 55% of those surveyed believe homeownership is out of reach financially.
The silver lining, however, is that housing professionals have an opportunity to help reach these generations simply by understanding their needs. 64% said that they expect lenders to educate them about the mortgage process, and many future homebuyers can benefit from housing counseling from a HUD-approved nonprofit housing counseling agency. As an industry, if we are willing to step into that advisory role, we can be more successful in helping prospective homebuyers become homeowners.
Steve Shoemaker, new president of Ideal Homes of Norman. [PHOTO PROVIDED]
NORMAN — Ideal Homes has promoted Steve Shoemaker from vice president of sales and marketing to president of Ideal Homes.
Shoemaker has led marketing for the company since 2003. He is the first company president to be named from outside the original ownership group.
“Steve and I have worked closely together for the last 16 years. He loves this company and its people,” said Vernon McKown, founder and CEO. “While his primary strategic focus has been on the sales, marketing, and design center side of our organization, he has a great strategic mind for the big picture and has played a vital role on our senior management team as we’ve set big goals for growth and leadership development.”
McKown remains as CEO and chairman of the management team. As part of the ownership group that started the company in 1990, he has led the company’s sales, marketing, land development and day-to-day operations.
Going forward, he plans to focus on setting the stage for Ideal’s future growth. Shoemaker will continue to guide sales, marketing and the design center while taking on IT and company leadership development initiatives.
Shoemaker holds a Bachelor of Science degree in mass communications/public relations from Oklahoma Christian University and holds the MIRM designation — Master in Residential Marketing — from the National Association of Home Builders. He has served on the Oklahoma Occupational Licensing Advisory Commission since 2018.
He and his wife, Jama, have three sons.
Ideal Homes has developed and builds in 18 neighborhoods in the Oklahoma City metro area, including Blanchard, Choctaw, Deer Creek-Edmond, Guthrie, Moore, Mustang, Norman, Piedmont and Yukon, and in Stillwater.