A history lesson in lumber/panel prices
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Lumber and panel markets are at a crossroads when it comes to pricing. The housing starts figure for March went above 1 million as a seasonally adjusted annual rate — the first time since June 2008 — indicating the recovery in home construction continues. As this recovery continues, prices for lumber and panels have reflected this growth, rising to levels not seen in many years.
If the housing recovery lasts, will lumber and panel prices also continue to climb? Perhaps we can draw some conclusions from OSB prices during the housing boom of 2003-2006. During this period, new-home construction was going at a feverish pace. So much so that it seemed every other driveway had a new dually pickup with a contractor’s name on the door parked in it. As the need for building materials escalated, prices rose to record levels. In April 2004, the price of 7/16-in. OSB in the Southeast reached an all time high of $528. Housing starts were 1.95 million that month. This was the high point, and still is, for OSB prices in any region.
Although housing starts continued to climb to 2.3 million during the next year, OSB prices peaked at just above $400. Why the difference? During this period, OSB producers ramped up production to a point that supply surpassed even the lofty demand of more than 2 million housing starts.
Today we are seeing housing starts just breaking 1 million, and 7/16-in. OSB prices are at or above $400. Where will the market go from here? Will home construction continue to grow toward more traditional levels and, if so, will prices for building materials follow suit? Will we see new record price levels for OSB in the near future, or will there be a repeat of 2005?
Once again, the answer lies in the hands of producers. Their destiny is theirs to control.
More on the challenges of painting
Outside of changing a light bulb or mowing the lawn, painting a room has long been considered the home improvement project with the lowest degree of difficulty and the biggest bang for the buck.
But a company that sells the concept of one-day painting services is armed with research that shows a consumer mind-set is not sold on the idea of painting as an easy exercise.
The company, Wow 1 Day! Painting, employed Wakefield Research to survey consumers. They came up with some views that challenge conventional wisdom:
- Close to 20% said that painting would take too long. A fair concern, given that most painting projects can stretch out for days if not weeks regardless if it’s DIY or a hired painting company.
- One in 3 Americans say it’s "too much of a pain" to do prep work before painting, such as cleaning and sanding walls, taping, covering furniture with drop sheets, etc.
- A quarter of Americans are concerned painting "will cost too much."
The WOW 1 Day! Painting Survey included 1,000 U.S. adults, ages 18 and older, from March 18 to 25, 2013, using an email invitation and an online survey.
Consumer trends in paint, stains
The paint/stain segment of the home improvement market may have slowed since 2009, as findings from a “Money Pit” survey of more than 9,000 callers suggested it did; and yet, despite this economic weakness, homeowners were still actively pursuing ways to update their home decor during that time.
These results merely validate what industry leaders Rob Horton, director of marketing for PPG’s North American Architectural Coatings business, and Erika Woelfel, director of Color Trends at Behr, have been saying — that painting, as the most basic home improvement project, doesn’t have to be costly.
“There are few home improvements that deliver a big result less expensively than a couple of gallons of paint,” Horton said, who noted that “we have seen a slight shift from pro to DIY projects” during the economic downturn. “Paint is still the most economical way to create a significant impact in a room.”
Woelfel’s take: “Paint is the easiest and most cost-effective way to update a room. It is also the ‘key ingredient’ for pulling all of the colors, furnishings and decor elements of a room together.”
Tom Kraeutler, co-host of “The Money Pit,” a nationally syndicated home improvement radio program, said home improvement projects like painting “have a viral quality that, once you get off your duff and get started, you get motivated to keep going, adding more rooms or elements to the project.”
Based on the results of the radio show’s “Voice of the Consumer” report, which analyzes all of “Money Pit’s” consumer engagement, both online and on air, 8-in-10 respondents said they were interested either in “How to do a project” or “Which type of product is best suited for the job.” Indeed, educating DIYers and others still has a ways to go, according to Kraeutler, who has taken many calls from people who say they painted over a leak stain a half-dozen times and could not understand why it keeps coming though (Answer: chemical reaction between the stain and the paint). “If they’d primed once and then painted, that would have sealed it in,” he said.
Kraeutler added that new formulations require explanations — for example, the recent introduction of paint-and-primer-in-one products. “We are constantly being asked to explain products and help consumers cut through the white noise to figure out what they really need,” he said.
For its part, PPG provides color visualization on its website to give pros and DIYers alike a chance to see what a color would look like even before they buy it. This is important, Horton said, given the sheer breadth of potential color combinations in today’s paint market.
David Hsia, senior marketing manager for brand and product at Behr, said the BehrPro program offers factory tinting services that ensure accurate color matching with timely delivery — “for every color imaginable and is geared toward meeting the specific needs of painting professionals,” he said.
For consumers, the Behr Color Center at The Home Depot offers a bevy of tips. For “color on the go,” Woelfel recommends downloading the ColorSmart by Behr mobile app that lets users visualize a project or property in a multitude of colors.
Valspar color strategist Sue Kim said that during the downturn, consumers turned to their home as a “safe haven.” That played a role in recent color trends that, according to Kim, “offer sensory experience of new technology, and leave customers with a simple, yet beautiful, experience, such as uplifting peaches, light-hearted pinks, glowing ambers, dusky blues and transparent greens.”
For Behr, blue is the big color in 2013 — from blue-green turquoise to jeweled sapphire to nautical navy. “Blue is a very relaxing and stable color that reminds us of blue skies and fresh water,” Woelfel said. “The nice thing about color and decor trends is that there’s always a little something for everyone.”