How to Fight Escalating Lumber Prices
The essential skill of value engineering
Lumber continues to be THE big issue in homebuilding. As we write this in May 2021, costs for framing lumber and plywood are three times what they were a year ago -- it's insane.
They might go even higher. An April 14 Business Insider article predicted a further 12% rise this year. Timber companies got way behind during the COVID shutdowns and, thanks to record demand for suburban homes from people fleeing big cities, have yet to catch up.
In this environment, estimating the cost of a job can feel like predicting next week's grocery bill in Venezuelan dollars. Lumber companies that have always guaranteed pricing for 30 days or more have now cut guarantees to 7 days.
If you're planning a custom home, all this can feel discouraging. But while the news media seems on a mission to amplify that discouragement, the fact is that good planning will ease the pain.
A professional builder is a powerful ally in this effort. The builder knows that lumber is just one piece of the puzzle and can suggest creative ways to reduce overall costs while still creating the home you want.
It's called value engineering—a fancy term for carefully planning every part of the job to optimize the return on every dollar. But while the concept is simple, execution takes real know-how & strategy by the builder, the design team & the homeowner. Value engineering isn't cost-cutting per se. Rather, it's a creative approach to meeting homeowner priorities.
We all know that a home with a complex layouts, elaborate exteriors, complex roof, natural stone works & woodworks on the interior will cost more to build than a simple box with a straight gable roof and laminate surfaces. Yet, most custom homebuyers reject any sacrifices herein.
Real value engineering is more subtle. You may be able to shave tens of thousands from the budget with small adjustments that have only minimal impact on how the home looks and feels—if you know what you're doing.
Working from the outside to the inside of the home, we consider the level & amount of each application. For instance, is the natural stone cladding specified for the entire exterior really necessary &/or appealing? Do the arched top windows @ every opening really make sense or would a select few actually look better?? Similarly, with the inside of the home, can the French reclaimed stone flooring be limited to the common areas in lieu of the entire floor plan? These (& many more questions) we take up with the design team first to ensure the integrity of the design is upheld. When in agreement therein, we will present these value engineered solutions to the client for their approval.
The trick is knowing which more-affordable materials and designs deliver the needed performance, aesthetic and warranty features.
The bottom line is that while lumber has been getting a lot of press, it's just one cost. Good value engineering can help offset crazy price trends by considering the house as a whole. The ability to do this well is a hallmark of a professional builder and a talented design team.
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