5 ms·

Okay, people stay at home more, so they need more space, so there's demand for construction. What about the spaces people used to occupy before covid moved the

Okay, people stay at home more, so they need more space, so there's demand for construction. What about the spaces people used to occupy before covid moved them home? Does it drive demand for demolition?

cpach 5y ago
I guess people hope to return some day. To public libraries, pubs, restaurants, etc.
rantwasp 5y ago
i wish this was a demand and supply thing but I am really afraid this is going to turn out to be inflation. And it’s actually all the prices that are going up - we’re just talking about wood because we have a good narrative around it.
- treis 5y ago
  Lumber prices have tripled for dimensional lumber. It's clearly a short term supply/demand thing and not an inflation thing.
  - rantwasp 5y ago
    why not both? IMHO inflation is real and it's going to bite us hard
  - lazide 5y ago
    What people consider ‘bad’ inflation is too much money/demand chasing constrained supply that can’t keep up. If it is a required/needed good, that causes people to raise the amount they are willing to spend to get what they need. Inflationary spirals happen when this ‘infects’ enough markets. Everyone is spending all their money chasing an ever harder to get/more expensive set of essentials, and are willing to spend more and more as time goes on as they get more desperate. Lumber is probably negotiable/non-essential enough it’s not likely to kick off an inflationary spiral. Food, rent, transportation, though tend to be key.
    - rantwasp 5y ago
      lumber is used in construction. no construction? less housing. less housing? more rent.
      - lazide 5y ago
        Plenty of alternatives though if it gets too expensive - brick, block, steel + stucco, etc. Lumber is important, and it’s cheap - but there is a cap until there are ready and economical alternatives.
- Robotbeat 5y ago
  10 to 20% would be really high inflation but we’re talking about like 200 or 300% wood prices. Nah, even if we happen to have higher inflation than any other year in the last century, lumber prices will still fall a lot.
alkonaut 5y ago
Office rents will probably take a hit in the new normal but I’m guessing everyone now just waits to see what happens. What’s clear is that many of us with two people who will work from home a lot the coming years have at least one room too few and are building extensions. My builder bought a $25k load of materials and left it on my lawn before summer for an extension they’ll build in August, because their supplier advertised that prices would increase 50% in July.
mcguire 5y ago
Weren't rents in SF falling drastically in the second half of 2020?
lmm 5y ago
No-one's really sure what will happen to office space (and even cafes/bars/etc. that relied on office workers for their clientele) after this. Anecdotally my employer has already closed what was previously their main building. If we're permanently in a more work-from-home world then yes, we'll eventually see demand for remodelling and demolition of downtown offices, though only once the economy and population have picked up enough that there's demand to use the space for something - blighted buildings from the last recession sitting idle for years is a thing that happens. The suburban business parks I can imagine just decaying forever, like low-end out-of-town malls were doing pre-pandemic - there's no other use for them and the land just isn't valuable enough.

cpach 5y ago

I guess people hope to return some day. To public libraries, pubs, restaurants, etc.

rantwasp 5y ago

i wish this was a demand and supply thing but I am really afraid this is going to turn out to be inflation. And it’s actually all the prices that are going up - we’re just talking about wood because we have a good narrative around it.

treis 5y ago
Lumber prices have tripled for dimensional lumber. It's clearly a short term supply/demand thing and not an inflation thing.
- rantwasp 5y ago
  why not both? IMHO inflation is real and it's going to bite us hard
- lazide 5y ago
  What people consider ‘bad’ inflation is too much money/demand chasing constrained supply that can’t keep up. If it is a required/needed good, that causes people to raise the amount they are willing to spend to get what they need. Inflationary spirals happen when this ‘infects’ enough markets. Everyone is spending all their money chasing an ever harder to get/more expensive set of essentials, and are willing to spend more and more as time goes on as they get more desperate. Lumber is probably negotiable/non-essential enough it’s not likely to kick off an inflationary spiral. Food, rent, transportation, though tend to be key.
  - rantwasp 5y ago
    lumber is used in construction. no construction? less housing. less housing? more rent.
    - lazide 5y ago
      Plenty of alternatives though if it gets too expensive - brick, block, steel + stucco, etc. Lumber is important, and it’s cheap - but there is a cap until there are ready and economical alternatives.
Robotbeat 5y ago
10 to 20% would be really high inflation but we’re talking about like 200 or 300% wood prices. Nah, even if we happen to have higher inflation than any other year in the last century, lumber prices will still fall a lot.

alkonaut 5y ago

Office rents will probably take a hit in the new normal but I’m guessing everyone now just waits to see what happens. What’s clear is that many of us with two people who will work from home a lot the coming years have at least one room too few and are building extensions. My builder bought a $25k load of materials and left it on my lawn before summer for an extension they’ll build in August, because their supplier advertised that prices would increase 50% in July.

mcguire 5y ago

Weren't rents in SF falling drastically in the second half of 2020?

lmm 5y ago

No-one's really sure what will happen to office space (and even cafes/bars/etc. that relied on office workers for their clientele) after this. Anecdotally my employer has already closed what was previously their main building. If we're permanently in a more work-from-home world then yes, we'll eventually see demand for remodelling and demolition of downtown offices, though only once the economy and population have picked up enough that there's demand to use the space for something - blighted buildings from the last recession sitting idle for years is a thing that happens. The suburban business parks I can imagine just decaying forever, like low-end out-of-town malls were doing pre-pandemic - there's no other use for them and the land just isn't valuable enough.