Local hardware stores and home builders are experiencing rapid and sometimes daily increases in the price of building supplies such as lumber.
Orillia Home Hardware store co-owner Chris Locke says the supply for building supplies is limited, while the demand is at a record high.
“The bottom line is this is going to be a challenging year to supply projects,” Locke said.
“We’ve ordered aggressively to try and head off some of the issues, but there is only so much we can do when supply is so limited.”
Locke believes the cause of the building supply boom has been sparked by people forced to stay at home during the COVID-19 pandemic.
“It seems like everyone is building a deck or a fence during the pandemic and the shutdown. People are investing in their homes because of the way the real estate market is going through the roof right now,” he said.
“There is a lot of disposable cash out there right now," he explained, noting "people aren’t vacationing, they aren’t eating out as much ... people have more cash in hand and they are investing it back into their homes, their properties, their cottages.
"People are spending more time at home, so they want to make the place as inviting as possible, and I think that all plays into this perfect storm of factors that have led to this massive increase in demand,” said Locke
The inflated price of building supplies is shocking to customers who visit the store to get what they need, but it’s not deterring them away from buying them.
“There is a lot of shock from people who come get quotes and find out how much things cost compared to two years ago, but there is also a reluctance from people to pull back on projects they had planned, people are willing to spend the money even though the market is inflated,” Locke said.
The inflated price of supplies is something Locke says his store has never experienced before.
“Pricing is almost changing daily. We used to do quotes for 30 days, and at this point, we can barely do three days because pricing is fluctuating so wildly,” he said.
Dennis Bottero, president of Landen Homes, a long-time Orillia home builder, is building the last ten houses of a 65-home development on the corner of James and East streets in Orillia.
He says the inflated price of supplies has impacted his company's building budget.
“There are certain products that have doubled and even tripled in price. A sheet of plywood, for example, cost $13 last fall, and now it costs $40,” he explained.
“Even at The Home Depot, the plywood is three times the price.”
While the cost of supplies is at a record high, eventually the cost of lumber will go down, Bottero believes, it’s just a matter of when.
“The reason why lumber prices are going up is because of production, and a lot of it is going to the States,” he explained.
“When (Donald) Trump was going to put a 25 percent tariff on lumber, that would have helped us here.”
There is a fear that the cost of other supplies may never go down again.
“Historically, when a trade raises the price of something, they don’t ever lower it again,” Bottero said.
“It’s scary because we don’t know how to price new projects now. The factor I was given by the lumber company was budget $10 a square foot more, so a 1,500 square foot house is $15,000 more than it was last year.”
While building and home prices continue to skyrocket, there is no sign of a shortage of demand coming anytime soon, Bottero says.
“We had a couple who closed on their house January of 2020 and they paid $398,000. Less than a year later they sold it for $615,000,” he explained.
“The question is are these prices going to stay? And unfortunately, if the cost of construction increases it has no choice but to reflect in the sales price.”
