Blog PostApril 8, 2021 - Educational
Condos Beware – Wood Prices Rising – Sticker Shock this Summer
As we continue to hunker down and stay away from everyone during the pandemic, there is finally some light at the end of the tunnel…Hurray! The vaccines are here! While there is some anticipation that everything will get back to NORMAL, or a NEW NORMAL, this will still take some time. So as everyone sits at home, one of the first things we would like to do is renovations, improving outdoor spaces, and property maintenance as these come to the top of our mind.
One of the newsworthy events I have continuously heard is how wood prices have almost tripled since the beginning of the pandemic. The news proclaims “Everybody is staying home, not taking vacations, not eating out, so they are renovating or building. This has driven the HUGE increases in wood prices”.
The pandemic has increased domestic demand for wood products, but these price increases are not solely the result of COVID-19.
While demand has increased, the real issue is supply of these wood projects. Many mills did not anticipate that the housing market would continuously surge throughout the pandemic and have not caught-up to this overall rising demand. Climate change has also reduced supply due to forest fires and bug infestations.
What does this mean for you? If you’re planning to repair or replace common elements such as fences and wood decks this summer, be ready for “Sticker Shock!”. Examine your reserve fund. If 3 years ago your engineer estimated $10,000 to replace the fences, it will cost you at least $20,000 this year! While engineers always allow for inflationary increases, wood prices have increased far more dramatically than inflation. When will prices return to NORMAL? Unknown. This may be our NEW NORMAL. Don’t be surprised when your property manager comes back with quotations much higher than the reserve fund predicted. I encourage you to work with your engineer to develop a new solution. The answer may be that you’ll just need to save for another year.
Henry J. Jansen, P.Eng., ACCI