Highest Prices in a Year Reached for Lumber and Building Materials

People who built a new house this year bought lumber at the lowest prices we have seen in the last 25 years.
[caption id="attachment_1432" align="aligncenter" width="300" caption="Lumber Futures find new Trading Levels"][/caption]If you put off building a new home this year, you missed the lowest lumber prices in a quarter-century (don't worry yet though, mortgage rates are still low). Although lows for lumber typically occur in November, this year, due to a strange twist of supply and demand fate, November marks the highs for 2009. The invisible market forces of ongoing mill shutdowns / curtailments (reduced supply) and increasing new construction sales / starts (increased demand) have caused nearby lumber futures to jump 70% in only 10 months from near lows that haven't been seen since October 1985.
[caption id="attachment_1433" align="aligncenter" width="300" caption="Lumber Futures Monthly Nearest"][/caption]
Quantities of both new and existing homes for sale in the Atlanta Athens Georgia area are also at multi-year lows.

Lumber and Building Materials Prices Pushed Up by Low Inventories

CME lumber futures were up limit two consecutive days two weeks ago, an increase of 10% that almost pushed prices to levels that would cover production costs. OSB prices went higher and order files moved well into December. At this point, more mills are shutdown than are operating. Even though demand is still weak, plywood and other building materials are marginally stronger due to thin supply. October housing permits and starts fell significantly from September, making unclear whether housing has bottomed at this point. The outlook for construction in the Atlanta - Athens Georgia area continues to be weak, particularly with seasonal slowness ahead. Georgia has lost another 18% of construction jobs since October 2008.

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Check with us for lumber and building materials for your new home or remodeling projects.

October 2009 Housing Permits and Starts

News from the U.S. Census Bureau that October new residential construction fell to a six month low put intense pressure on CME lumber futures. Near term January lumber futures closed down $9/m and March fell $8/m. Inventory is slim at all levels of the supply chain, and demand for the available building materials is sparse. In our area, Georgia has lost about 310,000 jobs since September 2007, and projects to lose a total of 135,900 jobs this year and 35,000 next year. Unemployment in Georgia has reached 10.2%. Building permits in the Atlanta - Athens area are off about 97% from 2005. According to Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University, permits will drop about 70% this year from 2008. Mortgage applications fell last week, with the index of home purchase applications sinking over 4%to the lowest level since November of 1997.

Housing and the September 2009 New Residential Construction Report

According to the U.S. Census Bureau and the Department of Housing and Urban Development, single family housing permits indicate that future construction activity will fall 28% nationally as compared to September 2008. The data also predicts a huge 74% drop since construction peaked in January 2006. Economists generally agree that annual demand for new housing units is somewhere around 1.8 million. Some economists say that 2 million units are required annually, while others think that the actual demand 1.5 million is. Here's part of how they come up with these numbers. The primary drivers of housing unit demand are new household formation and housing unit destruction. We regularly hear that new households, on average, form at a rate of 850,000 per year. Housing destruction is composed primarily of units destroyed by fire, flood, natural disaster and urban renewal, and is generally considered to be around 750,000 units per year. Fires alone account for almost 450,000 homes destroyed annually. Just watch the news any evening in Atlanta, and you are likely to see or hear about apartment or house fires. Adding just these two demand measures yields a 1,600,000 annual unit demand.



As the U.S. population has continues to rise, just as it has for the last 50 years, new housholds should be forming. For the last three years, new households have not been forming at a normal rate. Single people are moving in with each other, young adults are returning to live with their parents, and immigrants are entering the country at a much slower rate. Housing units, however, continue to be destroyed on a ongoing basis. This year alone, more housing units were destroyed by the floods in the Atlanta Metro Area this year than were permitted through September. Subtract the additional units destroyed by fires (usually the largest part of the destroyed number) and urban renewal, and Atlanta should be with a shortage in housing units. Just as over the last 50 years housing has been cyclical with booms and busts occuring irregularly, we may be setting up for another housing boom, when the next generation begins to form households and destroyed units are replaced.

Home Prices in the US Clearly Headed in Right Direction, Lumber Prices a Little Higher

Here is some more good news for consumers and for the housing market - home prices in the Case-Schiller S&P Home Price Index increased in July by the most in nearly 4 years. Prices climbed in 18 of the 2o major cities in the index.
CME lumber ends little higher nearby in quiet trade
Chicago Mercantile Exchange lumber futures closed mostly a little higher on Monday amid thin short covering.
Cash lumber & building material prices in the Atlanta - Athens Georgia area showed little change.

Floods Damage & Destroy Thousands of Homes in Georgia, Lumber and Building Materials Needed For Rebuilding

As a result of flooding from torrential rains, thousands of homes and businesses in Georgia, hundreds in Atlanta alone, suffered some level of damage or were destroyed. 114 homes in the city of Atlanta alone were destroyed by the floods, with many more damaged or destroyed in suburban and rural areas. More homes were destroyed than have been built this year. Athens had more flooding rains over the weekend.
There are fewer new homes for sale than there have been since march of 1983, and there are far fewer existing homes for sale in Atlanta than there has been in several years. As homes are rebuilt and repaired, there will be a greater demand for lumber and building materials. If we use more green home building products for new construction, repair and home improvement, we will make the world we live in a better place.

New Home Sales approach 1 Year High, Lumber Futures Fall, Atlanta Flood Update

Higher numbers in the New Home Sales report were expected by lumber traders:
CME lumber ends lower amid underlying cash weakness
November lumber closed down $4.80 at $169.10 per thousand board feet and January off $2.90 at $193.10. Both months posted 2-1/2-week lows.
New home sales climbed 0.7% to 429,000, according to data released last Friday. The available supply of new homes for sale dropped to 262,000, the lowest number in over 26 years. This represents a supply of 7.3 months at the current sales rate.
Atlanta, Athens and North Georgia are expecting more rain this weekend. Fourteen counties are now eligible for FEMA disaster assistance.
Atlanta flood update: More FEMA relief, flash flood watch
Building materials are still in adequate supply, with only spot shortages of some items.

Cofer Adams - North Georgia's Professional Lumber and Building Material Supply

At Cofer/Adams Building Center it is our pleasure to provide free job-site delivery service within a 45 mile radius of our Lawrenceville, Georgia based operation. Exact job placement of lumber, plywood and other building materials can be coordinated through communication with our expert Sales, Dispatch or Driver staff. Each order is accurately pulled and loaded by our veteran pulling staff with attention to top loading the material required first by your sub-contractor. Once loaded, each order is double checked for accuracy, targeting a 100 percent fill rate for all stock items. We have one of the lowest backorder rates in the industry.

With a combined delivery fleet consisting of pick-up trucks, 6 wheel enclosed van trucks, 6 and 10 wheel dump trucks, 10 wheel combination dump trucks, 10 wheel combination flatbed with Moffit and several tractor trailer/Moffit trucks, we are confident that Cofer/Adams Building Supply is equipped to handle all of your delivery requirements

You can count on prompt and courteous delivery of lumber, building materials, engineered wood floor systems, framing lumber, finish lumber, treated lumber, composite lumber, engineered lumber, plywood, OSB, exterior wood doors, exterior metal doors, interior wood doors, interior masonite doors, interior door units, wood windows, vinyl windows, wood molding, hardwood molding, pvc molding, flex molding, columns, stair parts, roofing, roof trusses, floor trusses, hardware and all of the complimentary items necessary for single family home construction.

Our logistics professionals excel in delivering lumber and building materials to the Atlanta - Athens, Georgia area.



We service these cities regularly:

Arcade, Alpharetta, Athens, Atlanta, Auburn, Bethlehem, Bogart, Braselton, Buford, Commerce, Conley, Conyers, Cornelia, Covington, Cumming, Dacula, Dahlonega, Dawsonville, Decatur, Douglasville, Duluth, Eatonton, Fairburn, Flowery Branch, Gainesville, Grayson, Greensboro, Hamilton Mill, Hampton, Hoschton, Jefferson, Lawrenceville, Lilburn, Lithonia, Loganville, Madison, Marietta, Maysville, McDonough, Monroe, Morrow, Newborn, Norcross, Oakwood, Oxford, Peachtree City, Riverdale, Senoia, Snellville, Social Circle, Statham, Stockbridge, Sugar Hill, Suwanee, Tucker, Watkinsville and Winder.

We offer free delivery of lumber, building materials, engineered wood, treated lumber, composite lumber, wood doors, wood windows, wood molding, roofing, roof trusses, floor trusses, stair parts, green home building products, siding and cornice for qualified orders to these counties: Barrow, Cherokee, Clarke, Cobb, Dawson, DeKalb, Forsyth, Fulton, Greene, Gwinnett, Hall, Henry, Jackson, Madison, Morgan, Newton, Oconee, Putnam, Rockdale, and Walton.

Whether you are building a new home, remodeling or have a home improvement project, Cofer/Adams Building Supply is equipped to handle all of your delivery requirements.

FHFA Home Price Index Increases

The July FHFA house price index increase of .3 percent from June provides further evidence that the housing bottom is in place. This makes the third consecutive month over month increase.
Along with the positive news we have seen from other reports, such as New Home Starts and Permits, the NAHB Builder Confidence Index, the S&P/Case-Shiller Home Price Index, the NAR Existing Home Sales Report and New Home Sales, this adds to the argument that housing has begun to improve. We have an "inflection point" in new residential construction, but we haven't reached the "tipping point" yet. August reports from the NAR on existing home sales will be released today and the new home sales report from the Census Bureau will be released on tomorrow. We will see how things shape up here in Georgia when the ground dries out from all of the flooding.

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China's Lumber Demand Increases, OSB Prices Soften

One unintended consequence from China's demand for lumber could be less lumber available for U.S. homebuilding. China has surpassed Japan as the second largest user of North American lumber, after the U.S. Low-grade lumber that would be used for building houses in Atlanta is used largely in concrete forming when shipped to China, and also in furniture construction.
Lumber sales to China continue to see growth
B.C. continues to ramp up lumber shipments to China and has already exceeded its lumber shipments to the Asian economic giant over last year despite the difficult global economic conditions.
Typically, OSB prices start to fall at this time of year, unless there is tropical activity to stimulate buying. Mill files are growing shorter, and secondaries are trying to move off contract loads. Building material supply yards have thin inventories for this time of year. There is very little residential construction in Georgia.
Two Atlantic Ocean weather systems being watched
The National Hurricane Center is monitoring two systems in the Atlantic Ocean this morning.

Doors Shuttered at Jeld-Wen's Oshkosh Door Manufacturing Plant

Our industry loses another valued producer of building materials.
End of an era: Jeld-Wen shuts down Oshkosh door plant
Jeld-Wen's Oshkosh door manufacturing facility closes after 154 years of manufacturing doors. This plant was one of the largest manufacturers of ornate wooden doors in the nation. Competition from fiberglass and metal doors, along with the economic decline, left no choice but to discontinue operations here. There are about 1,400 companies in the US wood window and door manufacturing industry with combined annual revenue of about $14 billion. The industry is concentrated: the 50 largest companies control about 70 percent of the market. Demand for wood windows and doors is closely tied to residential construction activity, both new construction and remodeling. As these manufacturers cutail and shutdown, there will be smaller product lines and less supply for the Atlanta-Athens, Georgia area.
There are literally hundreds of lumber, plywood and OSB mills that have closed in the last 3 years. Some may re-open, but many have been dismantled and even transformed into different types of businesses, never to manufacture building products again.

Build A Green Home with Energy Star Rated Windows and Doors From Cofer Adams

Starting October 1, 2009, you might see a label that identifies high-efficiency residential windows, doors, and skylights that currently qualify for the ENERGY STAR but will not meet the more stringent requirements that go into full effect April 1, 2010. Another new label helps you find products that are eligible for the federal tax credit of up to $1,500.

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We have all types of green products, such as doors, engineered wood, composite lumber and fiber cement siding.
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Lumber Prices Rise, Rain in Atlanta and Athens, Georgia Grind Other Building Materials Prices Lower

Increased housing starts in August combined with thin field inventories drove lumber prices up. Delivery to jobsites was hampered in Georgia, especially in the Athens - Atlanta area.
CME lumber ends higher on firmer cash
'A midweek upswing in sales of Western S-P-F sparked the market. Wholesalers took cautious long positions and distributors more confidently replenished,' Random Lengths said.
Mills continue to shut down or curtail production, but that seem to give little support to other building materials. OSB and plywood mills still have some order files, but are under pressure from a lack of buying at secondary levels. Upward pressure on panel prices could result from any development of tropical activity in the Atlantic.
Tropical Storm "Grace" forming?
After a week-long quiet spell, the tropics are showing signs of life as a large area of low pressure takes shape in the central Atlantic.

You Can Build Green in Georgia using Engineered Wood

Did you know that you can build green homes and save money at the same time? A study conducted recently shows that simply putting radiant barriers in attics can result in a 20% reduction in the AC unit's run time during the seven hours of peak attic temperatures, can cut peak temps by 23 degrees, and have a 57% efficiency improvement in the cooled air delivered through the air ducts. The study was conducted last summer by Appalachian State University (ASU), and led by Jeff Tiller, chair of the Technology Department, and Bruce Davis, building research scientist at the ASU Energy Center. In new construction, you can cut your heating costs by using engineered wood panels that are radiant barrier OSB products, such as LP's TechShield. Here in the Atlanta - Athens area, where temperatures often reach well into the 90's, your energy savings can be even greater. For more immediate savings, Huber offers a rebate to first-time builder users for their engineered wood panels. Advantech, Zip-Wall and Zip Roof products improve efficiency and functionality while building green with sustainable wood products.

Building Green & Engineered Wood in Georgia's Atlanta - Athens area

Building material supply dealers in Atlanta and Athens are searching for ways to increase sales. One selling feature many have overlooked is promoting green building products more heavily. This might appeal to the Generation Y "shadow buyers" that have not yet formed new households. Here in Georgia, We have "pent-up demand" from these potential buyers that could cause a surge in new home purchases. Engineered wood and engineered lumber products will appeal to these new prospects that have a “build green” mind-set. Many people prefer to live in a green home, even considering the higher costs. Composite wood products for decks, such as those manufactured by TimberTech, are not only green building products, but are also low-maintenance.
Builders Don’t Tell Buyers About Homes’ Green Features, Study Shows
Pros are “missing out on a very important opportunity” because consumers are clamoring for these features, says official of J.D. Power and Associates, which conducted the study.
TimberTech products help create a more sustainable world – one piece at a time.
TimberTech has the perfect balance of quality and sustainability. TimberTech is a proud member of the U.S. Green Building Council.

Georgia Building Material Suppliers Get Good News-Housing Starts and Construction Costs Rise

Wednesday, September 15, the U.S. Census Bureau announced that housing permits and starts for August were up from July. This is great news for building material supply businesses in Georgia:
Housing Starts in U.S. Climb to Nine-Month High
Sept. 17 (Bloomberg) -- Builders in the U.S. broke ground in August on the most houses in nine months, led by a jump in multifamily dwellings that overshadowed a decrease in construction of single-family homes.
In a related story, the Bureau of Labor Statistics released its producer price index for residential construction:
A Bright Spot in Housing: Construction Costs
Yesterday the Bureau of Labor Statistics released its producer price index for residential construction. Its significant increase from July to August is a good sign for the housing market.
One major component of construciton costs continues to falter:
CME lumber ends lower on easier cash market

Georgia Lumber, Construction & Building Material Supply update

Cool, rainy weather dampened sales of Yellow Pine Lumber in Georgia this week. The heavier rains being experienced in producing areas will make it hard to get logs out, which will result in a short- to medium term reduction in log decks. Lumber Futures closed higher September 15th, due to short-covering.
CME lumber ends higher on short covering
CHICAGO, Sept 15 (Reuters) - Chicago Mercantile Exchange lumber futures closed higher on Tuesday amid short covering prompted partly by a firm expiration in the September contract.
Construction Starts Up 13% in August vs July
Reed Construction Data (RCD) announced today that the year-to-date value of construction starts through August 2009, excluding residential contracts, totaled $162.3 billion, 13.0% less than in the same period in 2008. Individual month of August starts were 12.7% higher than in July.

Georgia Lumber & Building Material Prices continue to soften

Lumber and building material prices seem to be slowly grinding lower again. Lumber & building material supply businesses in Georgia continue to suffer as a result of housing market fundamentals:
James Hardie: US Housing Market Hasn't Bottomed, But Close
NEW YORK (Dow Jones)--James Hardie Industries NV (JHX) Chief Executive Louis Gries said Monday he expects positive year-on-year housing starts data in the U.S. between March and May 2010.
DJ CME Lumber Review: September Slips But Most Others Gain
Trading Markets (press release)
A broker said better-than-expected housing starts in Canada during August reported early in the day might have been mildly supportive for lumber futures.
-There seems to be little support for OSB prices, other than 2-3 week order files at the mills. With the mill curtailments and shutdowns in effect, development of any tropical activity could cause a further surge in prices.