How to Fight Escalating Lumber Prices

The essential skill of value engineering

Lumber continues to be THE big issue in homebuilding. 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. It’s insane.

They might go even higher. An April 14 Business Insider article predicted a further 12% rise this year. Timber companies got way behind during the COVID shutdowns and, thanks to record low interest rates and demand for homes, 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.

dave packer custom builder

If you’re planning a custom 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 custom 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 cost-cutting per se. Rather, it’s a creative approach to meeting homeowner priorities.

Items that can be value engineered include floor plans, elevations and product choices. The builder will study the plans and specifications (or the concept, if plans haven’t been drawn) and then suggest ways to reduce cost while maintaining quality.

It’s 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, upgraded counters and finishes will cost more to build than a simple box with a straight gable roof and basic finishes. But most custom homebuyers reject those sacrifices.

Real value engineering is more subtle. You may be able to shave 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 aren’t likely to use the front porch very often, making it smaller may be an option. If they care more about the master bath than the kitchen, they might be OK with chrome kitchen plumbing fixtures fixtures and ceramic tile backsplashes versus real stone.

The builder might also suggest changing the facade in places. Using a single window versus multiple windows will reduce the window packagecost. Adjusting the home’s footprint could reduce roofing and siding waste without sacrificing indoor space. Working with  trade contractors to redesign their work can also save money.

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.

Warm Regards,