The Expert Podcast

…The pain in the lumber market is not over commodities experts and analysts are saying that. 2023 especially the beginning of the year is going to be even more difficult for lumber producers and mills than the previous year They call it treacherous. Lumber prices are already off 66%. And they consider that a crash from previous highs. And the reasons are simple. the rising mortgage rates kept people from buying houses. And the. slow down in home sales made builders not want to build too many more new homes. The analyst they talked to from Westline, I've said it's a treacherous lumber market. And the price of lumber is already down from 1160 to $400 per thousand board feet That's a huge drop It actually was higher than 1160 the previous year. So don't expect lumber prices to go back up dramatically But at the same time, you may find that once this balance is out. And all this mill curtailment capacity. Is absorbed. It may spike up again because the mills are now curtailing their output They're shutting down production because at 400 bucks it's not worth producing. Some of these curtailments may become permanent because once mill equipment and employees. become used to the fact that they're not being used. The equipment can get outdated not repaired not maintain. Employees take other jobs. Now if you all of a sudden have a demand level that goes up in let's say 23 or 24, 25 model year, you're going to have. a capacity constraint that spikes the prices back up because of construction Now the question is going to be whether or not people want to buy homes again in the next two or three years, but there's still a demand because there's 5 million homes fewer than are needed by the current market of a residency.