Why the Price of Lumber is a Variable You can Manage Off-Site
The construction industry has been on a rollercoaster ride that would leave the most seasoned Six Flags fan weak in the knees.
Pandemic lockdowns resulted in mill closures, and halted home and commercial building projects in March, only to be followed by an exponential growth in April as people adjusted to their stay-at-home lifestyle.
Home improvement projects, upsizing to accommodate working from home, making more room for kids not going to school, and a rush of restaurant owners building outdoor patios kept construction trades struggling to keep up.
The price of lumber climbed a record-setting 207% – bottoming out $260 per 1000 board feet and reaching $850 – between April and August.
For many real estate developers and contractors, this spike in the price of lumber impacts their bottom line, not their buyers, because they’ve already made a commitment to the final price…
You don’t have to find ways to absorb unexpected cost overruns with off-site construction, including fluctuations in the price of lumber.
Three reasons why off-site construction helps stabilize your budget
Off-site construction was already poised to become the preferred option for residential and commercial building projects.
The consistency and predictability of an off-site manufacturing facility is attractive for developers looking to compensate for on-site skilled labor shortages and quality control issues.
And when it comes to insulation against unpredictable lumber prices, off-site construction definitely has the edge.
1. Less waste, more precision.
It’s been said that we build everything twice, the first time using our 3D BIM technology.
It allows us to create blueprints with a real-time eraser for every home, apartment or commercial building. And we’re able to plan the use of every piece of lumber in our facility to make the most of the resources we have.
Our highly skilled team on the shop floor uses advanced laser technology so each cut is done with precision. You get seamless joints with minimal waste, so you’re not paying for lumber in a dumpster or time-on-site making a bad fit better.
2. Long-term planning.
If you’re building your housing development in phases, we can plan and purchase lumber to match the homes you’re building and selling now, and down the road.
With our vertically integrated supply chain we can work with suppliers and set a schedule that works for developers – and their buyers – with confidence that the products will be delivered on time and on budget.
3. Bulk buying power.
The volume managed in our facility means we can commit to large quantities of materials, including lumber. That translates to savings for all our customers.
When we buy in bulk, we also know we’re getting a consistently high-quality product, reducing waste on the shop floor, and on-site. Whether we’re building three homes or thirty, we want every buyer to have the same, high-quality, home made from a quality product.
Off-site construction: changing the possibilities
The current climate makes on-site building more complicated.
Consumers are anxious for quality, custom-made homes and there’s a shortage of skilled labor and physical distancing rules for those who are on-site.
Real estate developers are looking for ways to deliver high-quality homes and still balance the rising price of materials and a reliable source of on-site workers.
With off-site construction you can provide an affordable product – efficiently and consistently – that doesn’t compromise a buyer’s expectations for quality and speed.
Off-site construction saves developers money by reducing cycle-time and protecting you from fluctuating lumber prices.
When you’re ready to start planning your next commercial or residential development project, contact ICG to see how you can save time and cut costs for your build. We can help you hit the ground running.