Lumber prices tumble with drop in home construction - Memphis Business Journal:

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Framing lumber prices, including the cost of yellow pine used in the have plummeted over thepast year, causingh mill slowdowns and increased buyinb among contractors despite a recent slowdown in new home Keith Grant, principal of Keith and David Granyt New Homes, says he doesn't think the price drop has been as significanrt here as it has elsewhere. "Lumber prices droppedx in August," Keith Grant says. "I was a significant decrease, but it still wasn'gt even 5%." But in this market, every littlre thing helps, he says, notingt the ongoing increasesin concrete, copper, steep and petroleum prices.
"Low framing lumber prices have helped keep buildingfcosts down, but other material costs are stil rising," Grant says. Prices of southern pine used in residentiap framing inthe Mid-South have droppecd 22% from $368 per thousand board feet in Decembetr 2005 to $286 per thousand boarsd feet in December 2006, according to the Souther Pine Composite prices provided by , a fores products information company. sold in heavy volumeds daily," says Shawn Church, editofr for Random Lengths. "Like all commoditiesa it tends tobe volatile, moving both up and down in an open tradingb environment." Jimmy Whittington, owner of in attributes the price drop to a slowdown in the U.S.
housing market as a wholew during the second partof 2006. "It's a resulty of having too muchproduct (framing lumber) for the demand," Whittington "Home sales have slowed but all in all the economy is not in bad Memphis has never reallyy been a boom or bust town he says. Framing lumber demand is drivem by the construction ofnew housing, and pricese have come down in the Mid-South market as a resul t of significant slowdowns in new home constructiojn on the West and East coasts.
Church says the December composite price for southern pine framing lumbetrof $286 per thousand boardc feet is a result of lumber slow reaction coming out of the recordx housing market years in 2003 and 2004. "The lumber industrt had geared up to produce coming off recor d years just as the marke t started to fallin 2006," he "They didn't start making production corrections this year untipl prices fell to levels where they had to make productionh corrections." He says some lumber prices have fallenj to 10-year lows.
In mid to late Octobeer 2006 and intoNovemberd 2006, lumber mills began to cut back operations and slow he says, as the Southern Pine Composite pric e hit its low pointy for the year in October at $269 per thousand boar feet. Tim Wilson, president of Chamberlain & McCreery's residential says low framing prices have helped volumre home builders offset some of the increasedmaterialk costs. "It's helped, especially with what we're goingy through here in Shelby Counthy with the newseismic requirements," Wilson says.
"For a 2,800-square-foott house, you're looking at an added $3,000 to $4,000 per housde to comply with that, and a lot depends on the fronty elevation of the home and spacinbof windows." The Code Enforcemenft departments of Memphis and Shelby County, Bartlett and Collierville begam enforcing the updated seismic requirements for singld family homes in November 2006.