It ain't just lumber folks...

[livinoutdoors]

I'll add to the coming terror.

My wife is in banking. Remember all the SBA and PPP loans " the government" was handing out all of last year? That's exactly what she handles at her bank. She spent a lot of days working from home until nearly midnight last year in the beginning of the pandemic.

Well those loans was actually the bank's money. The government has just now started paying the banks back...plus the incentives for their trouble. Her bank got their 1st reimbursement a couple weeks ago. She said the reimbursements were trickling in from the US Treasury. So we (The People) haven't seen or heard anything about that part yet. This money was not free. You can bet..."stuff" is coming...the .gov will get their money back.

Not only that...but remember the financial crisis we had in 2008? A LOT of banks got shut down by the FDIC because they were making bad mortgage loans and just general loans to people who had no business buying a home or stuff they couldn't afford in the first place. There's a bunch of these loan originators who found loop holes to basically do the exact same thing all over again.

This is history repeating itself. There was a building boom going on right before the crash happened 15 years ago...just like what's going on right now. Contractors are killing it right now building houses, just like they were then. People with subpar credit are getting approved for mortgages they can't afford...just like they were then.

You aint wrong. There are more of these mortgage loan packages on the book at the major banks now than there were in the last crash. A bunch of em are in commercial real estate as well. There is plenty of worry about office and retail space that people my never go back to, and that could trigger a crash. People got distracted by the pandemic, but there was lots of crazy stuff already goin on before this thing happened. But who knows? Maybe nothing will crash and houses will just cost 1.6 million for a two bed one bath five years from now.

 

[Pig Predator]

I'll add to the coming terror.

My wife is in banking. Remember all the SBA and PPP loans " the government" was handing out all of last year? That's exactly what she handles at her bank. She spent a lot of days working from home until nearly midnight last year in the beginning of the pandemic.

Well those loans was actually the bank's money. The government has just now started paying the banks back...plus the incentives for their trouble. Her bank got their 1st reimbursement a couple weeks ago. She said the reimbursements were trickling in from the US Treasury. So we (The People) haven't seen or heard anything about that part yet. This money was not free. You can bet..."stuff" is coming...the .gov will get their money back.

Not only that...but remember the financial crisis we had in 2008? A LOT of banks got shut down by the FDIC because they were making bad mortgage loans and just general loans to people who had no business buying a home or stuff they couldn't afford in the first place. There's a bunch of these loan originators who found loop holes to basically do the exact same thing all over again.

This is history repeating itself. There was a building boom going on right before the crash happened 15 years ago...just like what's going on right now. Contractors are killing it right now building houses, just like they were then. People with subpar credit are getting approved for mortgages they can't afford...just like they were then.

You aint wrong. There are more of these mortgage loan packages on the book at the major banks now than there were in the last crash. A bunch of em are in commercial real estate as well. There is plenty of worry about office and retail space that people my never go back to, and that could trigger a crash. People got distracted by the pandemic, but there was lots of crazy stuff already goin on before this thing happened. But who knows? Maybe nothing will crash and houses will just cost 1.6 million for a two bed one bath five years from now.

These two post pretty much sum it up for what I've seen in the last 25 years of being in the business. One or the other but I wonder what would happen if everyone would empty their accounts and start buying everything on credit cards and depositing their cash to pay for the cards every month. I bet that would ruffle some feathers if it happened on a wide scale.

 

[Broken feather]

I was talking with a guy that does mortgages for Wells Fargo and other banks. he said they were raising the credit rating threshold into the upper 700's since folks are having to pay premiums to even get a house these days.
He said some people were automatically adding $10,000-$15,000 to their offers since there was so much competition.

 

[sinclair1]

...other building materials at going through the roof(no pun intended) and getting scarce.

Yesterday I was in Lowes. They had no 1,000' rolls of 12/2 or 14/2.

3 weeks ago I purchased a 1,000' roll of 12/2 for $363. Yesterday it was $464.

View attachment 1077934

All their electrical boxes were sold out too.

The electrician that is going to help me wire my house said he can't find breakers. The electrical company the wires the houses we build can't find breakers.

The drywall sub said drywall is having another big price increase and Lowes is limiting the number of sheets you can buy(my business partner was in Lowes yesterday and saw that). He paid $24 for an SPF 2x6x16.

Lowes in Athens(Epps) is out of 7/16 OSB and HD has some for $37.25 per sheet.

With the .gov printing money and putting everyone on welfare I think this crash will be harder than 2008. I hope the dollar doesn't crash too bad. I'm in the retirement mode.

It must be nice to be HD. 1 year ago when OSB was $6.95 per sheet they made .69 cents profit(assuming a 10% net profit). Now they make $3.72 per sheet(assuming a 10% net profit).

edit: The OSB was $37.25 not $47.25.

So you’re not calling me crazy about the market anymore?

 

[Core Lokt]

Electrical boxes are a no go all over I'm told. It is freaking crazy and blame the low interest rates. I guess people don't care that they are pay stupid prices as long an their interest rates are low.

 

[jiminbogart]

So you’re not calling me crazy about the market anymore?

When did I call you crazy about the market?

I would guess I've bought and sold 100 times as much real estate as you have. I called the 2008 collapse in 2006. Unfortunately, a big ship takes a while to turn around and we(my business partner and I) were unable to unload all of our holdings. before the collapse.

Right now we have 42 lots under contract(we are the seller) and people kicking tires on 3 tracts(40 acres) in Oconee. We also have 4 Oconee building lots we are going to sell and I hope to get my house done this year and sell my current house(hopefully the market will keep going until next spring).

As it is now, we closed out last house on march 18, 2020 and have sat on the sidelines since(in hindsight we could have sold a lot of houses in the past year).
I believed there was good(less than 50%) chance for a collapse in 2020 and we are too old to start over again so we had to play it say.

If the US economy can with stand double(or much more) digit inflation and the printing of 10 trillion dollars, I will be shocked.

Let fuel prices jump up to $4-$5 per gallon and that will put Lady Liberty out of her misery. Heck let mortgage rates spike and it's over.

My concern now is that when I have converted most of my assets to cash, that cash will not be worth much.

I was getting ready to retire in my mid 40's when 2008 hit. Now I'm getting ready(basically already have) retire in my late 50's. Hopefully things work out.

 

[jiminbogart]

Electrical boxes are a no go all over I'm told.

Yep.

It's worse than buying ammo.

I'm gonna start buying up breaker and I won't need them for 4-6 weeks.

 

[Core Lokt]

Yep.

It's worse than buying ammo.

I'm gonna start buying up breaker and I won't need them for 4-6 weeks.

A friend has 50 rental and he is the on that told me that. He went from Crawfordville FL to Valdosta Go looking. No go. A guy in Valdosta told him that HD up there told him that they had an order for 30K of them but didn't know when they would get the first one.

 

[jiminbogart]

I checked cedar 4x4x8' prices at Lowes online. $33 and change. They were $32 and change a couple years ago. At least something is staying "normal".

 

[transfixer]

Its also affecting the automotive repair industry, if your vehicle needs repairs be prepared for the possibility of it being a while to get the needed parts, vendors are having a problem keeping up with demand, it appears that will all the government money they've been dishing out to people , that some vehicles are getting repaired/restored that otherwise would not have. I used to get parts I ordered the next day, sometimes even the same day if I ordered early enough, now I'm waiting a week or more, couple of instances up to 3weeks for a needed part, many dealer level parts are on national backorder . I have jobs sitting on my benches I can't complete for lack of parts. and of course there has also been an increase in price

 

[notnksnemor]

Square D standard single pole breakers, 10 to 60 amp going for $28 to $30 each.
70 Amp jumps to $70.

 

[jiminbogart]

I was wrong about Lowes. They were not out of OSB. They just don't put it on the shelf. It's stacked out front.

Wire(1,000' rolls) and electrical boxes were empty.

 

[kmckinnie]

I was wrong about Lowes. They were not out of OSB. They just don't put it on the shelf. It's stacked out front.

Wire(1,000' rolls) and electrical boxes were empty.

View attachment 1078140

Has the price of a yard of concrete gone up too. I bet so.

 

[jiminbogart]

Has the price of a yard of concrete gone up too. I bet so.

Probably. They usually go up on April 1st every year. Funny that all the companies go up the same amount on the same day. It's almost like collusion.

Me and my partner "retired" on March 18th last year. We are discussing maybe building a couple houses per year for walking around money.

 

[Resica]

...other building materials at going through the roof(no pun intended) and getting scarce.

Yesterday I was in Lowes. They had no 1,000' rolls of 12/2 or 14/2.

3 weeks ago I purchased a 1,000' roll of 12/2 for $363. Yesterday it was $464.

View attachment 1077934

All their electrical boxes were sold out too.

The electrician that is going to help me wire my house said he can't find breakers. The electrical company the wires the houses we build can't find breakers.

The drywall sub said drywall is having another big price increase and Lowes is limiting the number of sheets you can buy(my business partner was in Lowes yesterday and saw that). He paid $24 for an SPF 2x6x16.

Lowes in Athens(Epps) is out of 7/16 OSB and HD has some for $37.25 per sheet.

With the .gov printing money and putting everyone on welfare I think this crash will be harder than 2008. I hope the dollar doesn't crash too bad. I'm in the retirement mode.

It must be nice to be HD. 1 year ago when OSB was $6.95 per sheet they made .69 cents profit(assuming a 10% net profit). Now they make $3.72 per sheet(assuming a 10% net profit).

edit: The OSB was $37.25 not $47.25.

$488.00 here.

 

[Resica]

I checked cedar 4x4x8' prices at Lowes online. $33 and change. They were $32 and change a couple years ago. At least something is staying "normal".

$40.37 here

 

[jiminbogart]

$488.00 here.

It was $484 today and they didn't have any.

 

[dwhee87]

Interesting article about lumber....Seems the 'stump price' hasn't changed. Sawmills are the one's making a killing.

https://www.zerohedge.com/commodities/trees-lumber-sawmills-boost-profits-crack-spread-erupts

 

[deermaster13]

Its also affecting the automotive repair industry, if your vehicle needs repairs be prepared for the possibility of it being a while to get the needed parts, vendors are having a problem keeping up with demand, it appears that will all the government money they've been dishing out to people , that some vehicles are getting repaired/restored that otherwise would not have. I used to get parts I ordered the next day, sometimes even the same day if I ordered early enough, now I'm waiting a week or more, couple of instances up to 3weeks for a needed part, many dealer level parts are on national backorder . I have jobs sitting on my benches I can't complete for lack of parts. and of course there has also been an increase in price

I'm on the collision side, nothing for cars to be down 30 plus days waiting for parts. Insurance companies capping rental days so I'm getting a lot of upset customers. Our dealership floor plan is half what we usually keep on the lot. People are still buying new cars like crazy everyday. Last month they broke a 12 year record and now can't get inventory to replace it with.

 

[Scott Rogers]

Speaking of Rental cars. Hertz is getting 1400 for a 2 week Ford Focus rental. LOL. nope not from me!