CLEVELAND — Unless you work in the building trades, chances are you don't typically keep a close eye on the prices of materials like lumber. However, for some home and fence builders and even do-it-yourself types, the past 12 months have provided a painful lesson in economics. Similar to last year, this building season has brought with it another surge in lumber prices, hitting an all-time high earlier this month.
According to the National Association of Homebuilders, lumber prices have increased by nearly 180% since the beginning of the pandemic and have added $24,000 to the average price of constructing a typical, single-family home. The impact of rising material prices isn't just limited to home builders either.
"Every supplier has increased their costs on us. Even buying sand and gravel and cement to make the concrete, all of those costs have also increased," said Thomas Tekesky, the owner of Cleveland-based American Fence Co. "Right now the hardest thing is getting cedar 2x4s. They are simply unavailable right now. We had to discontinue new cedar fences because of it."
Tekesky, who has been in the fence-building business since he was 14 years old, said the current market is unprecedented. Despite the surge in material costs, including the prices of vinyl and chain-link fences, the level of demand has been overwhelming, Tekesky said. Currently, American Fence Co. is booked solid through the month of August.
"We keep getting a lot of phone calls. There are a lot of people staying home so they need a fence for their kids and dogs because they are driving them crazy," Tekesky said. "A lot of people have extra money because they aren’t going out to eat, not going out to events or traveling. They also got stimulus money so a lot of people are getting home improvements done."
It appears that prices have not quelled demand.
"We had a handful of customers that signed up last year with the stipulation that the price would be revisited in the spring this year. If they weren’t acceptable to that [new price] we would refund their deposits," Tekesky said. "Nobody has since turned us away because they know they aren’t going to get their fence installed any sooner or any less expensive."
New housing starts hit a 14 year high in December and the real estate market remains red hot. For roofer Justin Swick, there has been no shortage of work.
"Oh, there's tons [of work]," Swick said. "I think Ryan Homes builds about 250 houses a year so that's an average of five to six a week."
Tekesky said in addition to increases in material prices, the lead times on available materials have also increased, forcing him to place orders many months in advance.
"My experience would tell me that prices need to come back to reality at some point in time but when that will happen, I have no idea," Tekesky said. "There has been material shortages and price increases along the way but not sustained over this length of time."