In this debut of a new feature, Building SWCO, Home Builders Association of Southwest Colorado Executive Officer Rebekah Delamare discusses the lumber industry's recovery. Sponsored by Home Builders Association of Southwest Colorado.
Building Southwest Colorado brought to you by the Home Builders Association of Southwest Colorado, the voice of the building industry through advocacy, education, membership, and community. The pandemic has had an impact on every aspect of our lives, including the home building industry, with demand for lumber outpacing supply and driving up construction costs. But how long will this shortage last? You are watching the debut of our new feature, Building Southwest Colorado, brought to you by the Home Builders Association of Southwest Colorado. I'm executive officer Rebekah DeLaMare. When the COVID pandemic shut down the country, it also shut down lumber production in general, just as the building season was getting off the ground in spring of 2020. At the same time, home-bound residents decided to invest in do-it-yourself home improvement projects, while pandemic migrants who moved to Southwest Colorado decided it was time to build their dream homes. Demand for lumber increased even more. The dynamics aren't limited to just Southwest Colorado either. According to the National Association of Home Builders, limited lumber production combined with increased demand pushed the cost of lumber higher by more than 250%, adding an average of $36,000 to the price of new home construction across the country. Adam Hirshberg, co-owner of Studs Lumber of Durango has seen the effects of the pandemic firsthand.
Before COVID, supply had never really been an issue here for a couple years. We've always stayed ahead of the need, and it was never a problem, though we are removed from many of the metropolitan centers. It's been very easy to stay ahead of the demand. It's been very easy to forecast the needs and the mills have been, done a really good job of staying ahead of those needs. Once COVID hit, we saw a increase in need, in demand essentially, at that time, because it came right at about the time the spring bump happens in the lumber industry. Demand spikes up, the mills increase their output, and the price does obviously rise on any given year. COVID was especially different given that the mills had to cut their staffing down to space people out. Anybody that's seen a lumber mill work before, it's hard to understand, but it's a really quick, fast-paced, shoulder-to-shoulder environment, believe it or not, lots of people involved in the mix. So when you have to spread everybody out, it slowed the mills down a lot, and that happened right, like I said, right at about the time that the spring bump was happening, demand was increasing so we saw the price actually take a double hike.
Will lumber costs drop in the near future as mills increase production? Industry experts predict a drop later this year.
I would say the rising, the increase in cost is absolutely due to the increase in demand as well as the decrease in the supply that's out there, however supply is definitely catching up, even though demand is increasing. We're hearing that a lot of these mills are getting back up to full production rates, which is really good news.
If you'd like to reach Adam Hirshberg, visit his website at StudsLumber.com. We'll keep you up to date on the topics related to the home building industry in Southwest Colorado, including our attainable housing and education initiatives in future editions of Building Southwest Colorado. In the meantime, mark Saturday, June 26th on your calendar for our annual Contractors Yard Sale at the Durango High School parking lot. Thanks for watching. I'm Rebekah DeLaMare.