Lumbar Costs on the Rise

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Lumber Costs on the Rise

“A do-it-yourself home-improvement and construction boom has sent the price of lumber skyrocketing, as sawmills and strand-board manufacturers, including in Minnesota, scramble to keep up with surging demand.” – Star Tribune

The economy is slowly recovering and with that bounce back we are seeing lumber supply demand out of balance and prices spike. Mark Scholl of Lampart Lumbar provides us some insight on what they have been seeing and how it currently affects construction.

Sharp price increase remained the rule in lumber and panel markets.  Escalating prices had yet to chase off many buyers, who continued to scramble for coverage amid persistently tight supplies. Reports circulated of some buyers pulling back, but plenty others were still in the market. A strong July U.S. housing starts report helped sustain momentum.

LumbarCharts_Page_1_SPF

 

SPF – Strong demand and restricted supplies kept intense upward pressure on random dimension and stud prices at Western SPF mills.  Prices of 2×4 studs increased $40 over last week’s reported levels.

 

LumbarCharts_Page_4_OSBOSB – Buoyed by a robust July housing starts report, OSB prices continued to march higher, posting $15 increase early in the week.  Demand easily outpaced supplies and kept buyers in the market, despite record levels.  A number of producers remained off the market, with order files extended into late September and early October.

 

LumbarCharts_PlywoodPLY – Long lead times, strong recent upward price appreciation, and limited availability kept a lid on early trading.  Demand throughout the distribution pipeline remained steady to strong.  Buyers chased loads and often were unable to secure immediate coverage.

 

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With the lumber market hitting new highs every day and the shingle market taking increases as well, it may not be uncommon for a homeowner to decide to put a project on hold.  Yes, the cost of material is up, but the mortgage rates are very favorable right now and now is a great time to build. So why is now a great time to build? Looking at the statistics below, you can see that a home that costs $300,000 just a couple of months ago could now cost $315,000. We know that the cost of our material has not increased by $15,000 on a project that size. When you look at four different quotes as shown below, you can see that our total cost of the quote does not increase by the 5% represented.

 

  Date Sell Price Margin GM$ Cost Cost increase
  6/17/2020        62,940        21.40        13,469        49,471
7/16/2020        62,940        19.52        12,286        50,654 2.39%
  Date Sell Price Margin GM$  Cost Cost increase
  6/10/2020        72,056        21.96        15,823        56,233
7/16/2020        72,056        20.50        14,771        57,285 1.87%
  Date Sell Price Margin GM$  Cost Cost increase
  6/4/2020        45,794        22.30        10,212        35,582
7/16/2020        45,794        18.69           8,559        37,235 4.65%
  Date Sell Price Margin GM$  Cost Cost increase
  6/10/2020      141,220        37.22        52,562        88,658
7/16/2020      141,220        36.19        51,108        90,112 1.64%

 

We can assume that over the next year, mortgage rates will increase which will have a greater impact on the monthly payment than the rising cost of materials that we are currently experiencing.

The National Association of Home Builders, NAHB, has found that “Lumber demand tends to be a reliable leading indicator of residential construction activity, thus the recent price hikes due to increased demand coupled with reduced mill capacity should be viewed as a sign that mills must ramp up production as the home building industry continues into the [spring] home buying season.”

 

 


Interior Design Ideas:

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A master suite implies a space that goes beyond a simple bedroom and bathroom. The “suite” can include anything from an extra seating area, a fireplace, or a foyer at the entrance. Some master suites even include a home office. The goal of the master suite is to serve as an oasis from the rest of the home, and it can be an important aspect in a potential home buyer’s decision. Below, we’ll cover a few of the most popular interior design ideas for the master suite. 

Create a Seating Area

Creating a seating area will elevate the space from a bedroom to a suite. A seating area will add both functionality and luxury, and will likely lead you to spend more time inside the room. Whether you opt for a couch or a luxurious chair, a seating area in the suite adds a stately feel.  

Built-in Storage Units

Built-in storage units throughout the suite prevent clutter and allow you to showcase favorite pieces or books, as open shelving gives the space a modern feel. A built-in unit is a particularly good idea for the closet system, as it will free up space to add an island or sitting area within that space as well for additional luxury. 

Wall Art 

Wall art can help segregate the space within the bedroom, and it will add a feel of luxury and style. Playing with texture and design will keep the space interesting and showcase your individual style. If you prefer naked walls, decorative ceiling tiles are another way to add a great dimension to the room. 

Choose an Accent Piece

A grand master suite is anything but a solely neutral space. While you, of course, want to create a calming environment incorporating white solid surfaces in your space, an accent piece can complement neutral walls and bedding to add dimension to the space and add personality. 

Incorporate an Office Space

If you don’t have a separate space in your home that can be turned into a home office, the master suite could be your solution. Even a simple desk and chair will add another element of functionality to the suite, and you can create a pony wall (a dividing wall) to separate work from play. 

Considering an Addition of a Master Suite

If you’re considering an addition to your home, a grand master suite can give you a large return and attract potential home buyers when it comes time to sell. Designing the suite yourself will allow for all of the amenities that you find most attractive, whether that be an office space, high ceilings, or aging in place features such as lowes interior handrails. It’s also a great time to consider a first-floor master suite that’s conducive to aging. 

If the goal of the master suite is to serve as an oasis from the rest of the home, investing in a great master suite will pay off in the long run. The suite provides comfort, privacy, and a sense of luxury that’ll benefit you both in the short and long term. 

 

Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

2019: A Year in Review

2019: A Year in Review

In an effort to let you know more about Castle Building & Remodeling, we have taken the time to create an infographic. With the data presented in a visual and easy to understand format we hope it is both easy and enjoyable to learn more about our business.

At a glance you can see that in total we completed a total of 174 projects. These projects scaled across both range of project size and project type.

We continue the trend of focusing on smaller projects, kitchens, bathrooms, and exterior work. Since these are common rooms to remodel, it’s not surprise they continue to top the charts in popularity. However, let’s take a moment to admire that last year we were able to complete 8 projects for our very own employees. Our staff is comprised of extremely talented individuals and when we have the opportunity to turn a part of their home into their dream castle, it holds a special place in our hearts.

Getting back to the details of last year, you can see that when it comes to numbers, our small projects continue to take up a large portion of our data. Last year we completed 76 projects that valued no more than $5,000. Remodeling your home may seem expensive, but when you consider the type of work you need done it can in fact not be as lofty as you thought. It’s important to note though, the second highest value range was a total of 34 projects costing between $25,000-$50,000. These will include many bathrooms and other small projects we completed for homeowners last year.

Lastly, let’s take a look just where in the Twin Cities you will find homes being turned into castles.

If you’re familiar with our showrooms, you can see that the epicenters of the most popular zones are within the same areas of our brick and mortars. With three locations in Minneapolis, one in St. Paul, and our warehouse in the Longfellow neighborhood, it doesn’t take much effort to notice that most of our projects stay close to the heart of the cities.

To see the complete infographic, as well as previous year’s reports, click here.

Full Home Remodels vs. Partial Renovations

Full Home Remodels vs. Partial Renovations

“Remodel” and “renovation” are often used interchangeably. While the terms are similar in meaning, they aren’t exactly synonyms. What’s the difference?

The short answer is that renovations generally consist of cosmetic changes, whereas remodels are structural changes. A full-home remodel consists of completely changing up the structure and layout of your entire home. On the other hand, a partial renovation is simply sprucing up the appearance of portions of the house.

Now, things get confusing when you compare a full-home remodel to a partial remodel. In both cases, structural changes occur, it’s merely the amount of the home being remodeled that’s affected. It’s the same with full-home renovations and partial renovations.

Are you still confused? Keep reading. Let’s break down the differences in definition, cost, contractors, and more.

Restoration Versus Creation

Another way to think about these two terms is to think of them as restoration and creation. In renovations, you’re simply restoring portions of the home. In remodels, you’re creating something new entirely.

Let’s look at a kitchen renovation versus a kitchen remodel.

  • In a kitchen renovation, you might repaint the walls, change the quartz counter colors, pull up and replace the floor, and add in new cabinets.
  • In a kitchen remodel, you might knock down the wall between the kitchen and dining room to add more space. You might change up the layout to move the cabinets onto a different wall and change where the refrigerator goes.

Things can get a little dicey because the line between creating something new and giving something a facelift can be quite thin. For instance, changing your home office into a guest bedroom would be a remodel. While many of the changes are cosmetic, you’re still creating an entirely new space.

Sometimes the most straightforward way to compare the two is with the cost.

Cost Analysis: Which is Cheaper?

Generally speaking, renovations are much cheaper. This is particularly true if you compare a partial renovation to a full-house remodel. Remodels change the structure of the house, so there can be electrical rewiring, ductwork, and plumbing involved. All those additional expenses can add up quickly.

In terms of ROI, renovations tend to win out. Because renovations are cheaper, the return is usually better. For instance, if you replace your garage door, you can expect to recoup 97.5% of your investment, adding roughly $3,520 to the resale value of your home.

However, dollar-per-dollar remodels increase value by much more. For instance, a full kitchen remodel provides an average ROI of 62.1% and adds around $41,133 to the resale value of your home.

When it comes to weighing ROI versus resale value, you’ll recoup more of your investment in renovations. However, you’ll add more value to the ticket price with remodels.

Another cost to consider is the contractors. Many renovations are DIY-friendly, and if they aren’t, you can usually hire a home repair expert or handyman. However, with remodels, you’ll need to hire experts. Remodel jobs are generally more complex, so they require a certain level of expertise.

Think about roofing, for example. If you wanted to renovate your roof and you simply wanted to replace the old asphalt shingles with new synthetic shingles, that would be a renovation. You aren’t changing anything structurally, and you could likely hire any number of skilled contractors to do the job.

Alternatively, if you chose to have solar panels added to your roof and your roof faced north instead of south, you’d likely need a remodel. Solar panels are heavy, and often homeowners need their roof reinforced before getting them attached, so there are structural changes that have to happen, and specialized experts are required.

Other Distinctions

There are a few other distinctions between the two terms and practices:

  • Remodeling almost always requires a permit.
  • Some historic homes only allow renovations.
  • Remodels are the best solutions to a poor home layout.
  • Renovations can be DIY-friendly.

It’s easy to see how the two terms can be confused. They’re incredibly similar until you dig a little deeper. A renovation would be adding a home handrail to your walls. A remodel would be adding the handrails, a ramp, and widening the door frames to accommodate a wheelchair.

Determining which is right for you often comes down to budget and goals. Decide what changes you want, and then see whether a full-home remodel or a partial renovation is the route for you. Below you’ll see an excerpt from our Info Brochure, showing the various levels of pricing when it comes to renovation vs remodeling your kitchen.

Thankfully, we have an amazing team of designers who can help you navigate those difficult selections and come to the best decision for both your home and wallet.

Matt Lee is the owner of the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.

NARI Welcomes New Certified Remodeling Project Manager

NARI Welcomes New Certified Remodeling Project Manager

Castle Building & Remodeling is pleased to announce that Steve Carr has recently achieved the prestigious Certified Remodeling Project Manager status.

Before becoming a carpenter, Steve had a boring desk job that was sucking life out of him and turning his hair grey. After a year in the field of showing off his smarts and carpentry skills Steve was promoted to Project Manager. He has been with Castle BRI now for six years.

NARI’s CRPM program measures skill and expertise valued not only by other professional remodelers, but by consumers as well. Highly respected by those who have achieved the designation, the CRPM program identifies professional remodelers who have undergone comprehensive review and testing in areas of business management, ethical conduct, and technical skills.  In addition, they must also adhere to NARI’s strict Standards of Practice and Code of Ethics.

We sat down with Steve to learn a little more about what went into his new certification and what that means for his future.

Hannah Husemann, Marketing Manager: Tell us Steve, what lead you to take the exam to become a Certified Remodeling Project Manager (CRPM)?

Steve Carr, CRPM: I love learning and hoped to gain some new knowledge. We were having a slow period and this helped fill some of the void.

HH: And what exactly is a CRPM?

SC: The title of a CRPM professionalizes the role of managing a remodeling project. A CRPM has oversight of every aspect of the remodeling project—project planning, communications, project cost management, quality assurance, risk management and recordkeeping. Those with this designation will be taught to work toward mastering these project components in order to drive end-customer satisfaction and profitability of remodeling projects.

HH: Is there a significant difference between Project Manager and CRPM?

SC: There really is no difference.  I continue to do the same work in pretty much the same way.  The review class put an official name to some of the things I do everyday and on every project.

HH: How do you go about obtaining a CRPM certification?

SC: The first step to attaining the Certified Remodeling Project Manager certification is to complete a qualification form, which outlines an individual’s background of experience and education in remodeling. Eligibility requirements include working full time in the remodeling field for at least two years and passing a comprehensive assessment exam.

HH: How long did you prepare for the exam?

SC: I had a 2 hour class once a week for 6 weeks with assigned reading.  It was very helpful and informative.

HH: How will this newly earned certification benefit you in your career? How does it benefit your place of employment?

SC: I am uncertain how this will benefit me or Castle. During the review class I realized Castle does just about everything right. There are a couple areas to do with scheduling, risk assessment and project audits that I hope to add.

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About NARI: The National Association of the Remodeling Industry (NARI) is the only trade association dedicated solely to the remodeling industry.  The Association, which represents member companies nationwide—comprised of 63,000 remodeling contractors— is “The Voice of the Remodeling Industry.”™ To learn more about membership, visit www.RemodelToday.com or contact national headquarters, based in Des Plaines, Ill., at (847) 298-9200.