What Is With The Price Of Building Materials

edit and update and upload so today we're doing a live show we're talking about the supply chain and it's almost like an oxymoron um to call it a supply chain like really supply and what so supplying lots of headings um i know it's a live show but we're going to get into the guts and the glory of this thing right away because my plan is to post this video right after we're done and then everybody else can watch it and we don't want them being bored with a live show and the typical drab that comes with it so let's just jump into this we did a video last week we talked about what's going on with the supply chain i asked you to comment we got a lot of comments guys like thanks for the interaction it's amazing it turns out that when you hit the thumbs up button like you should be doing right now and help a brother out and you comment on the videos it has a massive impact on what youtube does with it and so we had some great exposure we had comments from all over north america and the world about what's going on with the supply chain and that is a great thing so i appreciate the help let's continue to do that sort of thing especially during this thread of information i know when it comes to the supply chain everybody it's really easy nowadays especially right because is it a conspiracy or not like seriously we've all seen the videos right i did last week i went and checked guys driving around the lumber yards and they're just stacked right to the roof outside with lumber skid after skid after skid train load after train load and so it got me into thinking i did a lot of research and i talked to some people in the industry and i got some really good clarification as to what the heck is going on and so i've got a visual aid i'm going to pull up i know it's a little cheap and it's it's mousy but listen when you have a low budget operation like i do you do what you got to do and of course as always if you're interested and you've got a question i'm going to do my presentation and then what we're going to do is if you have a couple quick questions afterwards feel free jump in there super chat that sucker and i'll get to it but we're gonna make this a short live stream tonight i'm gonna do another one really soon for members we can help answer questions and that sort of thing because that's what we do for our members we help but tonight we're dealing with the issue at hand so let's talk supply chain and let's decipher between conspiracy is it the end of the world is it armageddon or are we just trapped in like an alternate reality right now because here we go what we're going to talk about here is this this point on the on the graph that i threw up together is about 10 years ago it's recent history okay it's after the collapse of the housing market 2008 back when nobody could get a job a couple years later we recovered the red line represents the supply chain and the green line represents the demand okay and you will notice that over the last 10 years the demand is growing marginally faster than the supply all right if you remember i did a video uh four years ago we did a subfloor system in a basement and that represents the chain about here okay thanks maddie i'll just pack that up and so back then we used to do osb panels back at this point eight bucks a sheet okay it's currently at 60. but back when we did that video in the basement it was around 10 to 12. and it was up and it was creeping up slowly because it's slowly the demand was going faster than the supply all right and what i want to understand is the supply chain is it's it's a picky thing we've we've changed a lot of things in the last 30 years we have just in time delivery which means we're not warehousing anything anymore okay the guys are going to go into the forest in canada they're going to cut down trees they're going to stick it on a truck they're going to ship it to minnesota or somewhere else in the midwest and they're going to turn it into lubber or they're going to send it over and cut it down on the west coast okay and it goes straight to marketplace there's no warehousing so here's what happens our supply is not as growing as fast as our demand all right and there's a reason for that and and part of that growth is if you're a company and you can make 100 units a day and the demand is 105. you don't care about those other five people you're not going to the bank taking out a loan doubling the size of your shop to make sure that you're making what they want okay you're in a nice comfortable profit margin there there's just enough demand it's more than the supply you get maximum dollar for your product it's very profitable and let's face it we don't live in china so guys that own these companies like to get paid nothing wrong with that so up until just before covid we were experiencing a pretty deep gap in the supply chain all right and then we got the news of kovid and the supply fell off because people weren't even allowed to go to work don't forget the canadians supply the americans almost 50 of their lumber well we get pretty aggressive with their attitude about what we're going to do during this thing and the government paid everybody to stay home so there was nobody cutting trees there's nobody working but jeremy guess what happened fifty percent of the population that still had a full-time employment that weren't directly affected by the the the stoppage okay the slowdown in the economy all of those folks what i call the government employees all of those folks are still getting full salary and now they had all this extra money they didn't know what to do with i can't go on holidays i can't travel right and i'm well honey interest rates are low the housing market is booming let's renovate and max out our dollar because we can take our vacation money put it into renovations interest rates are almost zero right everybody everybody wants to buy my house and the housing market took off at the same time as all this is going on and the average joe like you and me are stuck here going wait need a minute what do you mean the price of osb today is now 60 bucks the average person can't afford that does that make any sense i'm going to share something else this is going to be very interesting let's do this you need to understand that when there's only 10 pieces of something available but the market wants 15 they just keep raising the price like in an auction all right until they can sell those 10 pieces for maximum dollar they're in business after all and you can't get upset about a company wanting to make good dollars during a situation like this now listen here's an income graph okay this is the median wage median salary materials used to be available for building construction and renovation in and around this range and the supply and demand curve hovered like this no problem almost everybody could afford to do renovations that owned a house people underneath this were renters okay but here everybody could afford materials right now the line is way the heck up here the top i would say thirty percent if you're not in the top thirty percent of income earners you shouldn't be buying things that are being affected by what's going on in the marketplace in the way of lumber okay but lumber's not the only thing that's a problem right now so let's talk about the elephant in the room because as soon as you get lumber prices going crazy and we've all been around long enough to realize that there are seasons prices go nuts you know we've had oil crisis in the 70s we've had aluminum problems we've had steel problems there are a lot of factors going on that are affecting everything okay one of them is the cost here i'm going to write this out and i'll lift it up the cost of shipping at the same time that we have a shortage going on shipping prices are going through the roof okay all of the ports in china are doubling and tripling the cost you order something you load a container as an importer halfway across the ocean you get a phone call by the way your shipping fees doubled while it was on the boat this craziness is going on all right at the same time you got the suez canal some decided to drive his boat through it sideways and plugged up all the boats and the bloody right side of the planet from getting through to market all right he should be shot that's just crazy like the first time in history somebody got that drunk they tried to take an ocean liner sideways through the canal really anyway i mean but seriously matt come on that's that's pretty stupid right all right so we got shipping prices going through the roof so all that cheap crap you like to buy on amazon is starting to get expensive right flooring is getting expensive because most of it comes from china the suez canal has hurt everything else now there's no shipping containers left laying around because they're all in a boat stuck in the ocean it's been one hell of a month so let's go back we've got a shipping problem we've got the suez canal and to top it all off we had a force measure i don't even know how to spell it we're gonna just make it a mesh so you can't tell all right force measure it has an e on the end i knew that part all right what's about fast and furious suez drift love it listen the forest major was texas and if anybody doesn't understand texas you've got to understand petrol chemicals okay now that may sound pretty fancy to you but what that means is plastic all of a sudden that means something right texas got their butts frozen it was horrific storm had a hell of a winter and in a part of the country where they're not used to winter that's a big issue so we're talking about all these manufacturing capacity 40 50 of resins things that make osb are not being made plastics oil manufacturing all that industry came to a screech and halt during the ice storm a lot of their systems were compromised and frozen and blew up and had to be rebuilt all right and so on top of everything else we've got a massive part of the commercial industry that had to be rebuilt and put back into production just last week another major resin plant got back online they're three months behind so when everybody's out there looking at these videos of all the lumber stacked up going why is it sitting there why is there a train of lumber now going if you've ever built the house lately you realize that you use a lot of stick lumber and a lot of sheet goods called osb floors walls roof you can have all of the sticks of lumber you want but if you don't have any osb you can't build a house so what they do is they hold on to the sticks of lumber they're not going to give you a deal in the meantime because there's only so much forestry going on there's only so many trees getting cut down and canada's only shipping you x number of lumber but in the midst of all of this there's a housing boom like could you do anything else maybe a good old-fashioned flood to wipe out the west coast i don't know we are at the edge of extinction with our supply chain and it's all because these people got so greedy and so full of themselves with their ability to do just-in-time delivery then now they can't even supply the marketplace they are already confessing you know what maybe we should take a look back at warehousing now warehousing is going to increase the cost 10 bucks goes to 15 when you start warehousing but 15 in my book it's better than 60. huh think about it now the fact is texas manufactures 40 of the residents so we have a major problem we're not getting abs pipes which means if you're building a new house you don't have the sheet goods to build your house you also don't have the plumbing to build the house you don't have the plastics there's new car manufacturing going on going hey we can't make our cars because we're kind of short on product so you're not alone just realize if you're frustrated with your supply chain this year it's not that the government's against you okay it's not a conspiracy theory there's not mean bad men running around ruling the world it's just a fact of this you want something that they can't give you okay and so they're gonna sell it to the number of people that they can supply at the highest price they're willing to pay now if that means that you're out of the game this year then don't feel sad a lot of us are it's expensive expecting prices to start coming down in the second half of the year it's not going to be something dramatic like osb is not going to go from 60 to 20 next week it won't happen that way i would be surprised if next year we aren't still looking at thirty dollars a sheep for osb so be prepared thinking about doing a deck job take a look at options all of a sudden building a composite deck starts to make a little bit of sense it may be twice as expensive but it's going to last 50 years and you're not going to have to touch it i'm just saying at the end of the day we've really got to be level headed about this and understand that if the supply chain is out five or ten percent the prices go up a lot but we've got like a 40 50 100 discrepancy and what's available and they're just going to charge whatever they need to charge to keep the products on the shelf and yes we get all kinds of comments well the stores are full and the prices are crazy what's going on fred well here's the deal if a store sells 10 skids of product every week they're going to continue to sell 10 skids of product every week because the supply chain is back to normal okay but the demand is going to be 15 or 20. so the price is going to stay up because they can't get any more when the store starts running out of drywall you know we're in trouble all right and i got one more little demonstration here i know i'm captain whiteboard tonight but hey this is really probably information that no one's talking about you know it's amazing that we've got a a an industry in the building world that is a quarter trillion dollars a year of home renovations and you think the newscast would do anything about it so before i give you any more information i want you to hit the like button if you're watching make sure you add your comments complain scream your conspiracy theorists i will welcome your comments i'm not against it if you if you feel betrayed by your government feel free to say something right but just remember this here we're going to just talk about how the companies work this line is going to be their maximum capacity the big black line all right ready that's the maximum capacity that's how much they can pump out if they work three shifts every day of the week and they never turn the lights off okay right now the demand for their product is like this so they're at maximum capacity they've hired everybody they can hire all right they've they've tired a pump cart to the dog to drag around this in the warehouse they're done they can't get any bigger what are they going to do their next option okay is to go to the bank and say give me money and bring me up to this level of production to satisfy the demand problem is folks in a few months the demand is going to drop right back down to here again and you're going to leave that guy running his business going wow that was a stupid idea to go into debt to build an expansion of my factory because by the time they're done the construction the demand is going to drop off so what they're doing is absolutely nothing they're very content selling everything that they're making at top dollar well the only thing that we have control over as the as as the society is this the demand bring it down for the love of god there are people out there who actually need a sheet of osb to finish a bathroom renovation so they can sell their house what i'm going to suggest is you watch the video we're going to do on thursday okay thursday night i'm releasing a video we filmed it yesterday i made a list of 10 renovations you can actually do this year things that aren't affected by the lumber price or the resin or the plastic problem okay they give you great return on investment redivert your focus from what you think you want to something that can flatten that curve and make things more reasonable again all right end of the day if you really want a deck this year that means you didn't have one last year and if you didn't have one last year one more year ain't gonna kill you all right i suggest that you go one more year without that deck and you take your time and energy and you do something different with it that way next year when we can get better prices on materials you can build a deck and you're twice as far ahead don't just sit there and gripe about it make sure you're productive okay watch the video on thursday night and take the time to make lots of money remember right now housing markets are going boom all over north america which means if you're smart as an investor when every homeowner should be an investor invest in yourselves make sure you're doing things that are increasing the value of your house okay now i know not everybody's going to watch this so i'm going to give you some of the list paint for the love of god paint is mostly water okay all right we're surrounded by it trust me we aren't having a shortage of water if you paint the inside or the outside of your house your average price of your value house goes up by five percent if you're a researcher check out the cost value report in the united states and if you're in canada check out the united states cost value report we don't have one up here but you can find a city of similar size and similar demographics it's not difficult to get an idea of how the housing market is affected and you'll know what to do with your home all right do things windows siding anything outside the house add mulch aggregates you know in the midst of all of this you can still get like uh almost free aggregates right it's 100 bucks for a dump truck of stuff it's in the way they want to get rid of it all you gotta do is pay the guy to drive out and dump it you can level out your property you can fix your grass you can you can build berms put in the cedar hedge all these things are still available okay add a patio right diy a patio great idea these products are available you can do lots of tile work you might not get the exact tile you want don't go to a store that says oh we're back ordered it's coming from italy it'll be here next week they're full of it all right don't expect anything from italy to ever show up next week italy is notorious for deciding at the drop of a hat that everybody on the dock is going to take a month off and just have a union break so if it's not in the store it's not available right shopping rules number one if it's not there now it's not going to be there next week make plans based on what's in front of you that you can take home with you when you see it all right and go renovate something make your house beautiful and make some money because this is a great year to renovate all right now i know we've all been in the comments it's going crazy over here i think it's awesome yeah there's always something you can do anybody who thinks that just because they can't build a deck this year the years are right off oh it's just a waste of time oh god everybody's against me no no no no no listen you can build a patio do something small with paper stones okay you might not find the same style and the color that you're in love with but it doesn't matter okay just get something build something increase the value of your home all right well that's enough for me today and if you like this kind of information don't forget give us a great big thumbs up okay and for all of the members out there we're going to do another members video just for you guys real soon so we can do some q a i'm not forgetting about you but we're just in the middle of some major stuff right now so we're going to schedule that and put in the community section real soon i hope you guys are all doing all right stay safe enjoy your renovation here it's gonna be a little different kind of think more remodeling this year okay don't go so major on your project all right and make everything beautiful in your home and enjoy it make your kids and your family proud of you and make your neighbors jealous cheers until next time that's jeff we're gone bye you

Channel: Home RenoVision DIY

Views: 405,771

Rating: 4.9478946 out of 5

Keywords: homerenovision, renovision, jeff thorman, homerenovisiondiy, conspiracy, cost of building materials, cost of renovating 2021, material costs 2021

Id: Ei14ks5ggGo

Length: 21min 19sec (1279 seconds)

Published: Tue Apr 20 2021