Lumber prices have finally fallen off record levels, but other supply problems will prevent homebuyers from seeing the benefit of lower costs for some time, industry officials say.
According to the National Association of Home Builders, the cost of framing lumber per 1,000 board feet had come down to about $400 as of Sept. 3. The price was just under $600 per 1,000 board feet in November 2020 during the coronavirus pandemic before skyrocketing to $1,500 in May.
While the cheaper framing lumber has been welcomed, local builders face other challenges with higher prices for virtually everything else that goes into a home, including higher labor costs because of a shortage of workers, said Ben McGerty, regional director of Hayden Homes.
"As the world flies back into the delta variant, we deal with (disruptions) daily," McGerty said. "You kind of have to laugh at it. 'What is it today?'
"The last call I got was, 'We can't get toilets,'" he said. "It makes it kind of hard to close houses without toilets. You can get the bowls but not the tanks for toilets. It's rough."
Joel White, executive officer of the Spokane Home Builders Association, said the disruptions will prevent the cheaper lumber prices from having an immediate downward impact on home prices.
"Builders will start pricing (lower lumber prices) in. They want to be competitive," White said. "But, it takes time for the market to adjust."
During the run-up of lumber prices, contractors had to use escalator clauses in contracts with buyers to cover the higher costs. Lumber yards also set time limits for how long their price quotes would be honored.
"When the price of materials go up, you see increases almost immediately in the market," White said. "But, you don't see the decrease for some time because ... the builder or lumberyard will keep their prices up as long as they can, until people stop paying it."
James Morgan, the purchasing manager for Greenstone Homes, said the lower lumber prices "have been a relief, absolutely."
"While lumber came down, there are other aspects that are still holding (prices) up," he said. "If you look at what the consumer pays, there have been so many other increases."
New-home owners may see a break if they build the house themselves, but contractors face shortages or higher prices for everything from screws to metal roofing to shortages of the resins used in making PVC and PEX piping.
"You name a product, we are probably having to find substitutes," Morgan said. "It's just about anything in the industry. It's very high demand and short supply."
The higher cost of building new homes coincided with a red-hot housing market driven by a limited supply homes combined with a steady influx of people moving to the area.
However, Spokane County's median home price for August fell to $389,728 after peaking at $395,000 in July.
White said the local market was due to cool off, which could provide an opening for homebuyers who decided or were forced to wait because of climbing home prices.
"We are seeing a softening of the market," White said. "It's not like seeing a crash, it's more of a leveling off. The bidding wars are not as strong as they were.
"We will see some price relief in the future. I just don't know when."
White's organization uses the metric that estimates about 200 families are priced out of purchasing a home for every $1,000 increase in a home's price.
"It's good to see (lumber) prices decrease," he said. "We want the homes to be affordable and attainable for all price levels."
The increasing costs and hassles of paying $30,000 to $50,000 above asking price convinced a lot of buyers to wait, White said.
"The bidding wars are not as strong as they were. There's still a lot of pent up demand in the market," he said. Many buyers "got tired of bidding and losing on homes. I think there is an opportunity."
McGerty, of Hayden Homes, believes the market influences that created higher home prices will continue, based on the supply problems and labor shortages in the region.
"This market has grown past our trade's capacity," he said. "The builder labor pool does not match the demand."
The stress of promised deliveries that don't show, and managing crews each day when it's unknown what they will be able to work on has caused some smaller contractors to fold because they couldn't pay bills as they waited for materials to arrive, he said.
"The job has never been harder than it is right now, with the pandemic, the labor shortages and the materials," McGerty said. "We've had some companies crumble. There is an exhausting amount of moving parts that we are trying to keep track of and it's very stressful."
The drop in lumber prices has been welcome news, he said, "but it's still chaos."