Jamie Lusch/Mail Tribune Larry Scripter works to rebuild a Phoenix home that burned down in the 2020 Almeda Fire. The price of lumber and other materials has skyrocketed.
Supply shortages and backorders are common
A joke is circulating among builders that a Ziploc bag of sawdust now costs $10.
But they are not laughing at the escalating cost of building materials which is threatening their livelihoods, driving up house prices and making it harder for fire survivors to replace their homes.
“They’re skyrocketing. It’s out of control,” Larry Scripter, owner of Scripter construction, said of the price hike.
His team is building a new home in Phoenix to replace the one burned by the Almeda Fire, which destroyed nearly 2,500 homes, apartment buildings, and manufactured and mobile homes in Jackson County in 2020.
Scripter said a piece of wood that cost $2-3 a few years ago now costs $8. A sheet of wood that once cost $15 now costs $45 or more, he said.
Rising material costs are making it difficult for builders in southern Oregon to complete projects. They work harder than ever to meet demand, but often earn less.
“It’s going to kill the construction industry,” Scripter said.
Many fire survivors find that their insurance payments are not enough to cover rebuilding costs.
“I know a few who have to take out additional loans to finish the house,” Scripter said.
The rebuilding boom following the Almeda fire in southern Jackson County and the South Obenchain fire in the northern part of the county is contributing to higher prices. But national and global forces are also at play.
Around the world, the COVID-19 pandemic has slowed production of a wide range of products, including lumber, electrical wire, plumbing supplies, windows, heavy trucks and excavators, according to people in the construction industry in southern Oregon.
Trucking and shipping to get supplies to factories and products to customers are both behind schedule.
Supply cannot keep up with demand, pushing prices ever higher.
“I’ll give you a good rule of thumb. Right now, that’s what we’re telling our builders and developers,” said Brad Bennington, general manager of the Builders Association Southern Oregon. “Take your cost of the building materials you were building with a year ago and triple it and you’ll be pretty close. So if you had $100,000 of building materials in a house, budget for $300,000.
The National Home Builders Association reported that lumber prices have risen 250% since April 2020. The increase in lumber prices alone adds nearly $36,000 to the cost of a newly built home, said the association.
Although much of the world slowed in 2020 due to the pandemic, homebuilding remained strong in the United States. People built more homes than during the post-World War II building boom, said Mel Weeks, manager of Parr Lumber in Medford.
“You lost a lot of construction material production, but construction was still going strong. Demand has exceeded supply,” Weeks said.
Many factory and factory workers are choosing to remain unemployed rather than return to work due to additional unemployment benefits, he said.
The American Rescue Plan Act passed by Congress adds a $300 weekly federal bonus on top of state unemployment benefits through September 6.
“We need to get the workforce back to work,” Weeks said. “We need to encourage people to come out of unemployment. We have to bring people back there to build and craft things.
He said low interest rates on mortgages and other types of loans are helping fuel the construction boom.
Additionally, people who lost their jobs during the pandemic or started working from home decided to tackle home improvement projects, Weeks said.
“We have seen a dramatic increase in owner-occupier projects. People work from home. Homeowners are depleting a lot of inventory that homebuilders would use,” he said.
Weeks said supply shortages are forcing builders to line up to get the materials they need. They used to order windows 10 days before installation, but now they have to order two months in advance.
Weeks said he used to call a sawmill for a quote and get a plywood truck two weeks later. Now the factories say the plywood will arrive in late July or early August.
Electrician Chris Guches installs the electrical system in a house under construction in the Almeda fire area in Phoenix. He sees price increases and shortages of various electrical system materials.
A supplier recently limited an electrical wire purchase to 750 feet, Guches said.
“That’s just enough for a quarter of a house,” he said. “The work is not slowing down. It doubles and triples. The work is there ― the material is not there. It’s a scary situation because if you run out of materials, you run out of work.
He said people who are having their homes rebuilt often order certain materials themselves, such as light fixtures to suit their personal tastes. Some lights and ceiling fans are three or four months late. The electricians come back later to install the fixtures when they arrive.
Builders and homeowners are seeing shortages of certain styles of household items needed to complete a home, including ovens, mattresses and furniture.
“There are shortages. We have broken supply chains everywhere. One developer told me he couldn’t even get simple things like ovens and dishwashers right now,” Bennington said. .
Weeks said he’s worried high prices will hold back construction at a time when Jackson County has never needed more housing.
Jamie Lusch/Mail Tribune Jamie Lusch/Mail Tribune A house is under construction in the Almeda burn area in Phoenix, near Quail Lane. A truck burned in the fire has not yet been removed.
The area was already facing a housing shortage before the most destructive fires in Oregon’s history hit in 2020. Jackson County lost the majority of the more than 4,000 homes destroyed statewide .
“I’m afraid people will say, ‘I can’t afford to rebuild’ and leave the valley. It further drains the workforce,” Weeks said.