News & Opinions
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Selling a Hot Commodity
Hallie Busta / PROSALES / April 5, 2013
Explaining the dramatic hikes in material prices will test sales reps
As if dealers weren’t already doing a lot more work with a lot less manpower, they have an extra challenge: calming builders surprised by hikes in building material prices, especially lumber.
“The landscape has changed rapidly during the past few months,” industry consultant Dena Cordova notes. “During the past few years, builders have gotten used to the idea of rock-bottom pricing and prompt shipments.” Now, she says, they’re suffering from sticker shock.
A recent survey by the National Association of Home Builders (NAHB) found that more than three-quarters of builders polled expect higher material prices in 2013, up from the 46% who said so a year earlier. Rising prices for materials outranked the cost and availability of labor and land—builders’ second and third concern—for the third consecutive year.
Those worries start with framing lumber, which in 2011 accounted for 13.5% of the cost of the average home built that year, more than any other product used, the NAHB says. Framing lumber’s average price has more than doubled since February 2009 to $409 per thousand board feet in February 2013, Random Lengths reports.