Just this week, the Wall Street Journal, Fox 8, Markets Insider, Fox Business, and Yahoo Finance have all come out with articles about how lumber prices have dropped more this week than any other week in the past. However, in these same articles, you have analysts saying they don’t expect much of a decrease and that builders will still see above-trend prices. In addition, we were able to talk with a few builders in the Mid-west this week about lumber prices, and they haven’t seen any decrease but rather have seen a price increase.
Why is this important? There are several implications for real estate agents. If your buyers read the headlines from these articles, they’ll start to think new construction prices will be coming down even though it sounds like that won’t happen for years. This is where you, as a real estate agent, need to have the correct information to inform them of how the market really is, so they don’t have unrealistic expectations.
What is the correct information? It’s simple. There is a high demand for homes, and the inventory of homes is still low. This means builders still have an increased incentive to build, which keeps the demand for lumber to remain at peak levels. If you can keep your buyers’ expectations level, then they’ll have the knowledge to make the best home buying decision without unneeded headaches.
