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May 19, 2021

How to Fight Escalating Lumber Prices

The essential skill of value engineering

Lumber continues to be THE big issue in home building. As we write this in May 2021, costs for framing lumber and plywood are three times what they were a year ago. That's right—they've tripled.

They might go even higher. An April 14th Business Insider article predicted a further 12% rise this year. Timber companies got way behind during the COVID shutdowns and, thanks to record demand for suburban homes from people fleeing big cities, have yet to catch up.

In this environment, estimating the cost of a job can feel like predicting next week's grocery bill in Venezuelan dollars. Lumber companies that have always guaranteed pricing for 30 days or more have now cut guarantees to 7 days. 

If you're planning a new home, all this can feel discouraging. But while the news media seems on a mission to amplify that discouragement, the fact is that good planning will ease the pain. 

A professional home builder is a powerful ally in this effort. The builder knows that lumber is just one piece of the puzzle and can suggest creative ways to reduce overall costs while still creating the home you want.

It's called value engineering—a fancy term for carefully planning every part of the job to optimize the return on every dollar. But while the concept is simple, execution takes real know-how. 

This is one of those skills that separates the real pro from the merely competent builder. The pro knows that value engineering isn't just cost-cutting. Rather, it's a creative approach to meeting homeowner priorities. 

Items that can be value engineered include floor plans, elevations and selections choices. The builder will study the plans and specs (or the concept, if plans haven't been drawn), walk the homesite, and then suggest ways to reduce cost while maintaining quality. It's all about making creative, informed choices.

These choices aren't what you might think. We all know that a home with a complex roof, lots of corners, and granite counters will cost more to build than a simple box with a straight gable roof and laminate surfaces. But most homebuyers reject those sacrifices.

Real value engineering is more subtle. You may be able to shave tens of thousands from the budget with small adjustments that have only minimal impact on how the home looks and feels—if you know what you're doing. 

How does the builder know what adjustments to make? By asking the right questions in the right way.

For instance, if the homeowners care more about the owner’s bath than the kitchen, they might be OK with more basic kitchen fixtures and appliances. The trick is knowing which more-affordable materials and designs deliver the needed performance, aesthetic and warranty features. 

The bottom line is that while lumber has been getting a lot of press, it's just one cost. Good value engineering can help offset crazy price trends by considering the house as a whole. The ability to do this well is a hallmark of a professional builder.

Q: What does U-factor mean on a window?

A: Both U-factor and R-value are measures of insulating performance. The difference is that U-factor measures heat transfer while R-value measures thermal resistance. Mathematically, the two numbers are reciprocal: U = 1/R and R = 1/U. Window U-factors generally fall between 1.20 and 0.20, with anything below 0.40 considered energy efficient.

© 2021 Copyright Tim O'Brien Homes. All Rights Reserved.

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