Got Wood? A Housing Recovery Built On Faith

Tyler Durden's picture

With lumber prices limit-down again (and now over 28% from their March highs), we are left assuming that they are building houses with hopium, as opposed to wood, these days...



Of course this is not the first time we have mentioned the precipitous limit-down day-after-day collapse in Lumber prices (here) and why it is relevant (here) but the fact that we havs roundtripped to when QE3 was announced is perhaps notable in its own right (while homebuilders are up 50%)


The question now is - who will be the big bad wolf to blow these housing dreams down?


Charts: Bloomberg

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Dollar Bill Hiccup's picture

Maybe builders are using FIAT lumber instead ...

Canadian Dirtlump's picture

absolutely, they shred dollar bills into a composite material that withstands all laws of reality.


Except in canada, where we apparently have plastic bills infused with maple syrup.

TruthHunter's picture

"I woke up with wood"

-- ZZ Top


Then cold shower reality takes hold and its another "limit down" day


Seriously, what are the export figures? Asia has been a huge buyer of timber in recent years.

If exports are collapsing, a housing blip won't support prices.



jerry_theking_lawler's picture

saw those guys this weekend....great show, considering they are lucky that any day they don't wake up in wood.....wood box, that is.

Stoploss's picture

Thanks guy's i been needing to replace a fence section, so i will wait a few more day's an maybe they will pay me to haul off the new fence wood;)

Canadian Dirtlump's picture

I'm spinning a new business out based off of junk removal. 1-800-got-wood.



Herd Redirection Committee's picture

Meanwhile, while we discuss economic collapse, feminists discuss 'misogyny'!  I think I am going to lose my damn mind!  (OK, not really)

101 years and counting's picture

latest trend in housing is to not use wood or copper.  well, not use copper for anything anymore.  this is still my fave chart that ZH needs to highlight:


jerry_theking_lawler's picture

3D printer?? would explain alot about collapsing demand of raw material imports.


3D print your gun

3D print your house

3D print your gold

what's next, 3D print your cheeseburger??

chdwlch1's picture

Actually, my brother is in construction and mentioned that a majority of multi-housing new-builds in the Phoenix area are using "Smart Trim" instead of lumber.  Could have something to do with the falling lumber demand/prices as well...



Moe Hamhead's picture

Here in south Florida houses are made of concrete block with wood trusses and metal studs.  Plastic plumbing and regular drywall.  Very little lumber.

Impact glass, blocks filled with concrete, and it's hurricane ready.  And they are not cheap!


DCFusor's picture

I hear steel studs are cheaper in both cost and labor...

HenryBuck's picture

Has anyone tracked the price of cards?

Kreditanstalt's picture

Government-subsidy to forest industry disappearing?  This will result in some of those overpaid resource-industry types - with the requisite huge mortgages, massive late-model Ford pickups, SUVs, boats and beautiful blond wives - getting a well-deserved layoff here.

doomandbloom's picture

efficient building practices?

HelluvaEngineer's picture

Right.  Built by Mexican robots.

kchrisc's picture

Another "leg-spreader" chart.

tradingdaze's picture

Sometimes in the morning.

BLOTTO's picture

Fema camps and super prisons are made out of concrete blocks and cast iron rods...

ssp2s's picture

Inexpensive lumber simply means moar profit for builders.  And, with more trees staying in the forest, rabbits and squirrels are happier, living longer.  Win-Win

Headbanger's picture

No, it's global warming making the trees grow really fast no doubt!

infiniti's picture

Lumber has only had 7 or 8 up days in the last 3 months of trading - THAT is a beatdown!

dariomilano's picture

canapa and bambu rule !

Jumbotron's picture

"The question now is - who will be the big bad wolf to blow these housing dreams down?"

This video is NSFW.....Not Safe For Wives


Wile-E-Coyote's picture

Rehypothecation; build one house get two free.

Kayman's picture

Rehypothecation; build one house, and the government imagines you built 2. No for that imaginary meal.


Satan's picture

We shall all live in seasonally adjusted new homes...soon.

fonzannoon's picture

The question now is - who will be the big bad wolf to blow these housing dreams down?

The answer is the long bond.


constantine's picture

Of those people who are buying homes, it's always new construction from what I see... Made to order. So now we just discard perfectly good old homes because we want to choose the color of granite countertops and have stainless steal appliances. Economic activity is now in ludicrous-tard mode. I own a house but I don't believe i could sell it for much more than when I bought it in late 2009. It yields a nice income though at about 6-8% after expenses. Price to rent ratios were very favorable and the amount for which i can rent it has definitely gone up over the last few years despite bubble-builders continuing to operate in hyperdrive around Evans, GA.I bought it cash assuming that it would be defensive in that homes may be the one thing that the government doesn't try to take when the shit hits the fan.

laomei's picture

As long as you have to pay property tax, you are just renting

Jumbotron's picture

"As long as you have to pay property tax, you are just renting"

Amen to that brother.....Private Property is just another in a long list of American Bullshit stories we tell ourselves to sleep better at night.

JuliaS's picture

In addition, not being able to own land, how can you own anything on top of it? You can't. Pretty much everything is in temporary possession when true land ownership is not permitted. Don't like it? Move elsewhere! ... except you can't. There are boarders preventing transportation or assets. Want to leave while leaving millions behind? Go right ahead! Or, on the contrary, if you are a wealthy man, willing and able to take millions with you, few countries in Europe and now even Australia will offer you permanent residency. Canada takes about $5 mil spent over 5 years according to recent rules. Used to be $800k or some other ridiculously low amount. Russia will invite you with open arms if you've got money. You get a 2 way ticket. Your cash gets a "Hotel California" visa.

Try moving gold and silver around. Good luck with that!

You've got better chances building an autonomous submarine or a launching a space satellite to deliver the payload.

That's the beauty of true land ownership that banks and governments collusively share. They get to tell all of us - temporary residents, where to sit and what to do, what to keep and for how long. The can do anyhthing they want with us, because it's their goddamn land and their imaginary lines. They live in a borderless world, while herding the rest of us, feeding us little illusions of freedom.

Seer's picture

I guess my view is a bit more positive.  I figure that I'm PHYSICAL and the banks et al are VIRTUAL.  Their "insurance" is virtual.  Mine is physical.

I see property taxes as payment for being able to use roads w/o having to endure tolls and highway robbers.  Yeah, one could state that govt is a "highway robber," but what we really want is some sense of predictability, and at least with govt (for now) the "fees/tolls" are fairly stable.

My property taxes have decreased since I've been the "owner."  And they'd decreased dramatically since the housing bust.  I'm out in a rural area so maybe it's not an unusual thing for other rural areas- I'd be interested in hearing from others whether this is the case.  I could even imagine property taxes dropping in some urban locations, such as Detroit.  I mention this because it's another case of people promoting absolutes when I know of, and see (because, well... I AM "Seer") conditions that would go against such absolutes: "Housing prices never go down"- these sorts of absolutes; they kill creative thinking (and is what TPTB want you to believe).

constantine's picture

Agreed, but how is that any less true for somebody who rents? you think you'll escape these charges by renting? This argument has always seemed incredibly short-sighted. Costs are passed through the supply chain, no? Half the people conceal-carry in GA and property taxes are very low so i have a little hope that they'll protect property rights at the state level. I pay about 1,000/yr prop taxes on a 1,250 sq.ft. Home worth appr$100,000. Nothing is perfect but I decided cutting out rent costs was prudent. GA is a relatively well managed state with low debt. It's done a hell of a lot better for me than my precious metals. There's not a single asset that the government couldn't lay ownerdhip to or tax if they so desired. Perhaps you guys have found a deserted island with WiFi.

PlausibleDenial's picture

Recapture is passed through to the government and you can't escape it.  You might want to research this issue.

laomei's picture

So you pay 1% per year plus all upkeep, repairs and maintenance, and of course all the city service fees which for whatever reason are not covered by local taxes.

Quite a few countries out there that don't charge property taxes... in other words, you can just live in your house and keep to yourself and pay nothing to no one.  Pretty nice :)


yogibear's picture

In some places in the US the property taxes are like a mortgage. 

Seer's picture

I don't live in the city, so no "city taxes" for me.

If your intent is to live someplace where there's no "property taxes" then move there.  If you think that there are no equivalent imposed community fees then you're pretty naive.

Things will change.  The question you have to ask yourself is which direction they will change- increase or decrease, and what the probability is of each.  Who is to say that the "property taxes will only go up" crowd won't be proven to be as wrong as the "housing prices will only go up" crowd?  I have first-hand experience in proving both of these statements false.

laomei's picture

I live in my apartment here in the city and pay precisely $0 in property taxes, fees, whatever.  The apartment is mine, as is another one in the city which is rented out and a villa in the countryside... which is also tax/fee free.  Worth an absolute shitload now, but I really don't care.  We have our stash and our stacks and keep adding to it.  The fact that everything can go to shit and we don't have to really worry is priceless.

Seer's picture

Those that are renting are, just renting...

Possession is 9/10 of the law (vs. "Renting is 9/10 of the law."

Those who think that one can actually "own" something are only fooling themselves.  "I'm going to rent because if you have property you have to pay taxes" is no more than a rationalization.

“We do not inherit the earth from our ancestors, we borrow it from our children.”
- Haida Indian Saying

Best we can hope for is to be a custodian of a property.  And for those who are landlords I can only say: good luck! (I was placed in the position of having to be one for only 2 months- that cured any notion that I'd ever wish to be one.)

BTW - Everyone says that property taxes never go down, but mine have (and they were low to begin with).  Just like "home prices will never go down," I've managed to prove both of these notions to NOT be absolutes.  Sometimes when you know what you're doing you can be an outlier...

Seer's picture

Down-arrowed by another fucking piker unable to present any meaningful counter argument.  How's that renting your parents' basement thing going for you?

Herd Redirection Committee's picture

The neighborhood and school district is what counts (for the ladies).  Can't say I disagree, although I do think the difference between a 'good' public education and a bad one is likely minimal (the bigger difference would be in how much effort a student puts in).

Seer's picture

Most of the educational system was set up to serve TPTB.  In the future when TPTB have less ability to control everyone (due to a collapsed infrastructure) "education" will be more in the form of "life skills."  One need only look at the fact that there are far too few jobs available to suck up the grads of today's curricula.

FullFaithAndCretin's picture

Stainless steal, ha ha good one. I see what you did there, a subtle oblique reference to the debt trap of mortgage-backed home ownership.

Seer's picture

My fuel imports are WAY down now that I'm heating with wood from my property (let's hear from all the "renters" out there that can boast this).  Yeah, it's a fair amount of work to cut, split, stack, haul etc., but it's better than not having this option.

sitenine's picture

It's not about the data, it's about the indicators. Home Builders are up because the home builder index is up, just like the S&P is up because the S&P index is up. If you start doing analysis, you're just going to fuck things up. BI Joe and the rest of the MSM have the right idea - just harp on the indexes, and make fun of those silly data miners. Life couldn't possibly be better. Furthermore, you can also point to real data to make the same case, like gold is down because everything is fine,  no need for safety, etc. We're more than through the looking glass here folks - they've managed to herd the sheople right into a virtual reality of never ending prosperity - or so they believe. Personally though, I've had enough of virtual. I am fine with idiots laughing at me for hedging AGAINST risk, because they're idiots. Seriously, what the fuck do I care?

Seer's picture

"I've had enough of virtual. I am fine with idiots laughing at me for hedging AGAINST risk, because they're idiots. Seriously, what the fuck do I care?"

This is all anyone really needs to know- well said!  Post it and close shop.