3 ms·

Why do you say lumber is a bubble? It seems to me all of the lumber being produced is being used, and lumber is a limited and valuable natural resource. I don

Why do you say lumber is a bubble? It seems to me all of the lumber being produced is being used, and lumber is a limited and valuable natural resource. I don't see how lumber supply suddenly increases or lumber demand suddenly decreases.

stjohnswarts 5y ago
the price is a bubble not the volume. As supply goes up then the price will drop as demand is staying the same or dropping a bit depending on who you ask.
pmichaud 5y ago
On the demand side there is a spike basically from low interest rates plus everyone trying to move into a house over the past couple years. But that’s starting to chill out as the house prices got pretty prohibitive and interest rates are looking to climb. Plus there’s the speculative market which responded to rising prices by buying/raising the price, and will at some point, maybe right now, swoop back down in line as signs point to a downturn and speculators bail. You’re right though that it’s hard to expand the throughput of the supply side since even doubling, say, the number of planted trees won’t pay off for at least 20 years in the case of fast growing trees like poplar, and longer for harder woods.
positr0n 5y ago
> lumber is a limited and valuable natural resource I assume this is still true, but a year ago when I unfortunately had to start a large lumber project the stumpage fee, aka the price a tree owner gets when they sell their tree to be logged, was at all time lows. The entire price increase was at the mills due to - supply dipped because everyone thought the economy was going die and preemptively shut down mills in 2020 but actually the opposite happened - demand soared as everyone wanted to build houses or do renovations - lastly, minor labor shortages and covid outbreak induced stoppages

3 ms·

Why do you say lumber is a bubble? It seems to me all of the lumber being produced is being used, and lumber is a limited and valuable natural resource. I don

by after_care 5y ago

stjohnswarts 5y ago
the price is a bubble not the volume. As supply goes up then the price will drop as demand is staying the same or dropping a bit depending on who you ask.
pmichaud 5y ago
On the demand side there is a spike basically from low interest rates plus everyone trying to move into a house over the past couple years. But that’s starting to chill out as the house prices got pretty prohibitive and interest rates are looking to climb. Plus there’s the speculative market which responded to rising prices by buying/raising the price, and will at some point, maybe right now, swoop back down in line as signs point to a downturn and speculators bail. You’re right though that it’s hard to expand the throughput of the supply side since even doubling, say, the number of planted trees won’t pay off for at least 20 years in the case of fast growing trees like poplar, and longer for harder woods.
positr0n 5y ago
> lumber is a limited and valuable natural resource I assume this is still true, but a year ago when I unfortunately had to start a large lumber project the stumpage fee, aka the price a tree owner gets when they sell their tree to be logged, was at all time lows. The entire price increase was at the mills due to - supply dipped because everyone thought the economy was going die and preemptively shut down mills in 2020 but actually the opposite happened - demand soared as everyone wanted to build houses or do renovations - lastly, minor labor shortages and covid outbreak induced stoppages