Columnists, Darren Satsky, V4I6

Great Investment Time

The lumber market adjusted to supply-and-demand factors throughout the most recent two-month period. Strong fundamentals supported robust business activity but were not enough to stop a slide in many lumber prices.

Some prices represented an opportunity for shed builders to buy at levels not seen in years.


The economic fundamentals remained strong in the period with GDP growth positive and the labor market operating near full employment.

Real interest rates were still near zero, and the latest inflation metric posted was 2.4 percent.

Housing continued to slow with both new and existing sales declining.

The trade war with China and the escalation of new tariffs concerned the capital markets.

Moves by the Federal Reserve Bank to raise interest rates also concerned market participants as inflation numbers remained tame.


Western SPF 2 by 4 #2 showed big declines over the period, dropping 38 percent. Eastern SPF was down about 30 percent.

Western and Eastern SPF 8-foot studs fared better than the decline in dimension lumber with both receding about 25 percent.

SYP 2 by 4 #2 prices held relatively steady and only fell 6 percent over the period. Treated SYP moved in line with the change in bright stock prices.


Many SPF items represented investment-price levels. Although this positive development did not cause a strong reaction, some SPF dimension prices were at levels not seen since 2016.

Many of our shed builders asked me what was ahead for SPF prices in the next few months. My answer was that the market has always found a level in which supply and demand intersect. As of this writing, the market remained oversupplied, and that translated to “cheap prices.”

Shed builders should note that this never lasts, as attractive-looking deals stimulate demand and, eventually, higher prices.


Lumber demand will remain strong due to a growing economy and strong labor market. The lumber supply chain will adjust to meet any temporary slowing demand. We have already heard about mill curtailments.

Shed lumber buyers should be on the lookout and prepare to react to any deep discounts offered by market participants. Many items already represent investment-price levels.

Comments are closed.

Current Issue

April/May 2024