Sask. home builder predicts drop in lumber prices this spring

A Saskatchewan home builder is predicting some relief from high lumber prices in time for the spring building season.

“(By) late March, early April we expect a drop as much of 30 per cent in the market,” Warman Homes Centre president Rick Casavant told the Brent Loucks Show on Monday.

Prices for oriented strand board (OSB) and dimensional lumber have increased 200 to 300 per cent over the past nine months during the COVID-19 pandemic. Casavant said a sheet of OSB plywood that was $12 a year ago is selling today for $38 in his store.

“There’s lots of time where there’s no lumber to buy. We’ll place an order and we used to wait two days. Now we’re waiting six to eight weeks,” he said.

“COVID came back so strong and the demand in the U.S. is much higher than we expected. Eighty-five per cent of all that we produce in Canada goes south of the border and the market there is incredibly strong.”

Supply remains the biggest challenge.

With logging companies in the middle of their busy harvest season, Casavant foresees a price correction on the horizon with more products coming online to meet the demand.

“The (loggers) harvest now until the end of March. Then the surplus will start coming where we have more product available,” he said. “We haven’t got through that period of time yet to correct the market.”

Casavant said while the market can’t sustain these record prices, the correction will be permanent and it’s unlikely we’ll see prices return to pre-COVID levels.

Chris Guerette, the CEO of the Saskatoon and Region Home Builders Association, said current lumber prices are adding $20,000 to $30,000 to the cost of building a new home valued at around $300,000.

Guerette has received calls and emails from members concerned about the current trend and the impact on their business and customers.

“Unfortunately, we’re a bit like sitting ducks. There’s not much we can do locally on this file. I think we have our suppliers that are doing the best they can to help their clients so they can keep building and hiring,” Guerette said.

“At the end of the day, the price of a home will increase and affordability will be eroded. It especially impacts markets like ours that are still very affordable.”

Guerette says more leadership is needed from the federal government on the issue.