Home price increase! The July FHFA Home Price Index

Home prices are increasing nationwide, and the housing market is improving. The July FHFA house price index increase of .3 percent from June provides further evidence that the housing bottom is in place. This makes the third consecutive month over month increase.
Along with the positive news we have seen from other reports, such as New Home Starts and Permits, the NAHB Builder Confidence Index, the S&P/Case-Shiller Home Price Index, the NAR Existing Home Sales Report and New Home Sales, this adds to the argument that housing has begun to improve. We have an "inflection point" in new residential construction, but we haven't reached the "tipping point" yet. August reports from the NAR on existing home sales will be released today and the new home sales report from the Census Bureau will be released on tomorrow. We will see how things shape up here in Georgia when the ground dries out from all of the flooding. Lumber and building materials have yet to show major influence from the underlying fundamental increases in housing. Excess mill capacity will need to be reduced for upward price pressure to resume.

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The Unintended Consequence of China's Lumber Demand, OSB Prices Soften

Many people have heard me talk about the unintended consequences that result from situations in the lumber market. While China's demand for lumber has helped the lumber industry in North America, one unintended consequence could be that there will be less lumber supply available for U.S. homebuilding, and prices will rise as domestic demand increases.

As China's demand for lumber increases, it could reduce lumber available for U.S. homebuilding. China in now the second largest user of North American lumber. Only the United States uses more. Low-grade lumber that would be used for building houses in Atlanta is used largely in concrete forming when shipped to China, and also in furniture construction. Inventories are low for building material supply yards for this time of year. However, there is very little residential construction in Georgia, and the record-breaking rains of the last week have made jobsite delivery nearly imposible.
Lumber sales to China continue to see growth
B.C. continues to ramp up lumber shipments to China and has already exceeded its lumber shipments to the Asian economic giant over last year despite the difficult global economic conditions.
Typically, OSB prices start to fall at this time of year, unless there is tropical activity to stimulate buying. Mill files are growing shorter, and secondaries are trying to move off contract loads. Two Atlantic Ocean weather systems being watched
The National Hurricane Center is monitoring two systems in the Atlantic Ocean this morning.

Jeld-Wen's Oshkosh Door Manufacturing Plant Shuttered

Our industry loses another valued producer of building materials.
End of an era: Jeld-Wen shuts down Oshkosh door plant
Jeld-Wen's Oshkosh door manufacturing facility closes after 154 years of manufacturing doors. This plant was one of the largest manufacturers of ornate wooden doors in the nation. Competition from fiberglass and metal doors, along with the economic decline, left no choice but to discontinue operations here. There are about 1,400 companies in the US wood window and door manufacturing industry with combined annual revenue of about $14 billion. The industry is concentrated: the 50 largest companies control about 70 percent of the market. Demand for wood windows and doors is closely tied to residential construction activity, both new construction and remodeling. As these manufacturers cutail and shutdown, there will be smaller product lines and less supply for the Atlanta-Athens, Georgia area.
There are literally hundreds of lumber, plywood and OSB mills that have closed in the last 3 years. Some may re-open, but many have been dismantled and even transformed into different types of businesses, never to manufacture building products again.

You Can Build A Green Home with Energy Star Rated Windows and Doors From Cofer Adams

New Energy Star labels for doors, windows and skylights.
Starting October 1, 2009, you might see a label that identifies high-efficiency residential windows, doors, and skylights that currently qualify for the ENERGY STAR but will not meet the more stringent requirements that go into full effect April 1, 2010. Another new label helps you find products that are eligible for the federal tax credit of up to $1,500.

Let us help you build your American Dream Green Home with windows from YKK AP from Cofer/Adams!
We have all types of green products, such as doors, engineered wood, composite lumber and fiber cement siding.
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Lumber Prices Increase While Rain in Atlanta and Athens, Georgia Push Other Building Materials Prices Lower

An increased rate of housing starts in August, combined with low field inventories drove lumber prices up. to Jobsite delivery was hampered in Georgia, especially in the Athens - Atlanta area.
CME lumber ends higher on firmer cash
'A midweek upswing in sales of Western S-P-F sparked the market. Wholesalers took cautious long positions and distributors more confidently replenished,' Random Lengths said.
Lumber and panel mills continue to shut down or curtail production, but that seem to give little support to other building materials. OSB and plywood mills still have some order files, but are under pressure from increased selling at the secondary levels. Upward pressure on panel prices could result from any development of tropical activity in the Atlantic.
Tropical Storm "Grace" forming?
After a week-long quiet spell, the tropics are showing signs of life as a large area of low pressure takes shape in the central Atlantic.

Build Green in Georgia using Engineered Wood

How would you like to build green homes and save money at the same time? A recently conducted study shows that putting radiant barriers in attics can result in a 20% reduction in the AC unit's run time during the seven hours of peak attic temperatures, can cut peak temperatures by 23 degrees, and have a 57% efficiency improvement in the cooled air delivered through the air ducts. The study was conducted last summer by Appalachian State University, and led by Jeff Tiller, chair of the Technology Department, and Bruce Davis, building research scientist at the ASU Energy Center. In new construction, you can cut your heating costs by using engineered wood panels that are radiant barrier OSB products, such as LP's TechShield. Here in the Atlanta - Athens area, where temperatures often reach well into the 90's, your energy savings can be even greater. For more immediate savings, Huber offers a rebate to first-time builder users for their engineered wood panels. Advantech, Zip-Wall and Zip Roof products improve efficiency and functionality while building green with sustainable wood products.

Building Green using Engineered Wood in the Atlanta - Athens Georgia area

Here in Georgia, especially in Atlanta and Athens, building material supply dealers are searching for ways to increase sales, while simultaneously contributing to sustainablity. It's no secret that suppliers are promoting green building products more heavily. This appeals to the Generation Y "shadow buyers" that have not yet formed new households. Here in Georgia, We have "pent-up demand" from these potential buyers that could cause a surge in new home purchases. Engineered wood and engineered lumber products will appeal to these new prospects that have a “build green” mind-set. Many people prefer to live in a green home, even considering the higher costs. Composite wood products for decks, such as those manufactured by TimberTech, are not only green building products, but are also low-maintenance.
Builders Don’t Tell Buyers About Homes’ Green Features, Study Shows
Pros are “missing out on a very important opportunity” because consumers are clamoring for these features, says official of J.D. Power and Associates, which conducted the study.
TimberTech products help create a more sustainable world – one piece at a time.
TimberTech has the perfect balance of quality and sustainability. TimberTech is a proud member of the U.S. Green Building Council.

Georgia Lumber & Building Material Suppliers Get Good News

The U.S. Census Bureau announced on September 15 that housing permits and starts for August were up from July. Things are looking up for building material supply businesses in Georgia and the Atlanta – Athens area:
Housing Starts in U.S. Climb to Nine-Month High
Sept. 17 (Bloomberg) -- Builders in the U.S. broke ground in August on the most houses in nine months, led by a jump in multifamily dwellings that overshadowed a decrease in construction of single-family homes.
In a related story, the Bureau of Labor Statistics released its producer price index for residential construction:
A Bright Spot in Housing: Construction Costs
On September 15th, the Bureau of Labor Statistics released its producer price index for residential construction. The increase from July to August is a good sign for suppliers to the housing market.
Lumber futures indicated that a major component of construction costs continues to deflate:
CME lumber ends lower on easier cash market

Georgia Construction, Lumber & Building Material Supply update

This has been a cool, rainy week in Atlanta, Georgia. The unusually wet weather dampened sales of Yellow Pine Lumber in Atlanta and Athens this week. The heavier rains being experienced in producing areas will make it hard to get logs out, which should result in a short- to medium term reduction in log decks. Lumber Futures closed higher September 15th, due to short-covering.
CME lumber ends higher on short covering
CHICAGO, Sept 15 (Reuters) - Chicago Mercantile Exchange lumber futures closed higher on Tuesday amid short covering prompted partly by a firm expiration in the September contract.
Construction Starts Up 13% in August vs July
Reed Construction Data (RCD) announced today that the year-to-date value of construction starts through August 2009, excluding residential contracts, totaled $162.3 billion, 13.0% less than in the same period in 2008. Individual month of August starts were 12.7% higher than in July.

Prices for Georgia Lumber & Building Material continue to decline

Lumber and building material prices are slowly grinding lower again. As a result ofhousing market fundamentals, lumber & building material supply businesses in Georgia continue to suffer:
James Hardie: US Housing Market Hasn't Bottomed, But Close
NEW YORK (Dow Jones)--James Hardie Industries NV (JHX) Chief Executive Louis Gries said Monday he expects positive year-on-year housing starts data in the U.S. between March and May 2010.
DJ CME Lumber Review: September Slips But Most Others Gain
Trading Markets (press release)
A broker said better-than-expected housing starts in Canada during August reported early in the day might have been mildly supportive for lumber futures.
-There seems to be little support for OSB prices, other than 2-3 week order files at the mills. With the mill curtailments and shutdowns in effect, development of any tropical activity could cause a further surge in prices.

New Mortgage Applications and Residential Construction Rise, New Plywood Plants, Lumber Production Falls

The combination of New Mortgage Applications rising and Lumber Production falling makes for an interesting combination of underlying fundamentals.

Mortgage applications rise 17% -Random Lengths WoodWire
The Index of Mortgage Applications from the Mortgage Bankers Association increased 17% to a reading of 648 for the week ending September 4.
Western lumber production fell for third straight year -Random Lengths WoodWire
Lumber production at mills in the 12 western states declined for the third consecutive year in 2008
Perfecta Foret plans to open new plywood plants in Quebec
Moscow. Sep 09, 2009. /Lesprom Network/. Start-up company Perfecta Foret plans to open new five-ply glue-laminated plywood plants in two former lumber mills in Quebec. The company received $C1.2 million in loans from Canada's Regional Growth program to offset costs of refurbishing the former mills, which include Scierie L.B. in Lac-Bouchette and Scierie P.H. Lemay in Saint-Francois-de-Sales. The total investment is expected to reach $C5.7 million.
Construction spending down 0.2% in July; 3-4% further drop expected through Winter -Reed Construction Data
Offsetting the residential gains, the decline is accelerating in nonresidential markets.
Single family market expanding slowly; multifamily market shrinking rapidly -Reed Construction Data
Residential construction spending is forecast to jump 18% from the end of 2009 to the end of 2010.

Lumber Rises, Weyerhaeuser Reopens Mill, OSB Strong, EWP Panel Rebate

CME lumber end mostly up on short covering
(Reuters) - Lumber futures at the Chicago Mercantile Exchange closed mostly higher last Thursday amid light short covering with only limitless September down ahead of its expiration next week.
Mill reopens after August shutdown
As a result of these challenging market conditions, the Philadelphia facility underwent this extended downtime to balance supply with customer demand...
OSB manufacturers now pushing through second price increase

First Time Use Builder Rebate – AdvanTech® & ZIP System™ Products Build Green with Huber Engineered Wood Products and get money back as well!

Tax Credit for New Home Buyers, 2010 Atlanta Recovery, Mortgage Applications Increase, Lumber Mixed

Buy now: The first-time buyers tax credit will expire soon, don't lose out on this once-in-a-lifetime event!
"The combination of near historically low interest rates, favorable pricing by builders, along with this tax credit, makes buying now the deal of the century,"
Economist: Atlanta's recovery will start next year
Atlanta is poised for an economic recovery starting in the second half of 2010
U.S. MBA Mortgage Applications Index Soared 17% Last Week
Mortgage applications in the U.S. jumped the most since March last week...
CME Lumber Review: Ends Mixed In Quiet Session
The September contract settled down $0.50 per 1,000 board feet at $175.00, while November was up $2.70, or 1.55%, at $177.10. January settled up $1.60 at $197.90

US West Coast Lumber and Log Exports Up, Atlanta Home Sales Report

West Coast's log, lumber exports increase in second quarter of 2009
By USDA Forest Service, Pacific Northwest Research Station
A total of 239.5 million board feet of softwood logs and 80.2 million board feet of softwood lumber was exported from Washington, Oregon, northern California, and Alaska in April, May, and June of this year, according to the U.S. Forest Service's Pacific Northwest Research Station.
Log exports for the second quarter of 2009 from Oregon and Washington totaled 189.5 million board feet, up 38.6 percent from the first quarter volume of 136.7 million board feet.
-As these exports increase, there will be less raw materials for domestic production of lumber, plywood, OSB, doors and windows. This could result in material shortages for lumber & building material producers, builidng material suppliers and builders.
Atlanta Home Sales Report
2007-2008 Home sales overview by county- Atlanta
Gwinnett 2008 10,467 units -31.30% from 2007.

Great Summertime Lumber Projects - Decks, Pergolas and Gazebos

You can add value and enjoyment to your home! Imagine dining in your back-yard gazebo or relaxing on your new deck.

This is the perfect time to improve your outdoor living space with gazebo and pergola kits, composite decking and treated lumber from Cofer/Adams Building Center in Lawrenceville!

www.coferadams.com/pergolas-gazebos-and-decks-great-summertime-lumber-projects/
www.coferadams.net/treated_structures/

Atlanta BlueLinx adds LiteSteel beams in Georgia, Lumber and OSB

BlueLinx is Now Distributing LiteSteel Beam
ATLANTA -- BlueLinx Corporation has entered into an agreement with LiteSteel Technologies America, LLC to distribute its LiteSteel™ beam in 29 U.S. markets.
-BlueLinx is a major distributor of building supplies in the Athens -Atlanta, Georgia area, including lumber, OSB, plywood, engineered wood, wood molding and trim.

Lumber Dealers Finding Value in Value-Added OSB
Branded products now offer moisture resistance, taller sizes to increase wind resistance, radiant barrier backings, pre-markings, FSC and SFI certification, and more.
-Here at Cofer/Adams Building Center, Inc., we carry TechShield by LP, Zip Wall and Zip Roof by Huber for roof and wall sheathing. We also carry Weyerhaeuser's StructureWood Edge Gold and Huber's Advantech for engineered wood sub-floor use.

July New Home Permits & Starts Commentary

The graph above shows the Seasonally Adjusted New Residential Construction & Sales data through July 2009. The lines represent Total Permits and Starts, Single Family Permits and Starts, Single Family Units Sold, Total Under Construction and Single Family Under Construction. The straight trend line represents a 50 year regression analysis of Single Family Starts. It is worth noting that there have been several construction downturns since 1959, and that we have surpassed levels that have triggered recovery in all of the past housing downturns.




If you look at Single Family Starts and Permits, we see that the inflection point probably occurred somewhere between January and March of 2009. It was only later in the spring that we saw a significant increase in the Atlanta – Athens area. Lumber, plywood, and OSB mills continue to curtail or shut down completely, even though lumber and Panel prices have risen above the lows that were at or below sustainable levels.

The quantity of Single Family Homes for Sale is the lowest it has been since April, 1993.
“The median sales price of new houses sold in July 2009 was $210,100; the average sales price was $269,200. The seasonally adjusted estimate of new houses for sale at the end of July was 271,000. This represents a supply of 7.5 months at the current sales rate.” Source: U.S. Census Bureau, NEW RESIDENTIAL SALES IN JULY 2009.
As the supply of new homes continues to drop, new homes will need to be built to replenish the supply. This will require new jobs to be added in the construction industry, which should help lower unemployment, and contribute to a new cycle of prosperity in our U.S. economy.

Capacity for single family residential construction has fallen as builders, building material product suppliers, and lumber and panel mills downsized or shutdown completely. This is good news for any lumber mill, lumber yard, building material supply, and builder left standing in the market.

Reid Adams
http://www.coferadams.com/
Cofer Adams Building Center, Inc. is a full service building material supply of structural and related building products for residential new construction in the Atlanta – Athens Georgia area. We provide prefabricated components, including floor trusses, roof trusses, and engineered wood; wood and vinyl windows; and pre-hung interior and exterior doors, as well as assemble and distributes interior and exterior door units. We also offer lumber and wood sheet goods comprising dimensional lumber, plywood, and oriented strand board products used in on-site house and commercial framing; millwork products, which consist of interior trim, exterior trim, columns, and posts; and other building products that include gypsum, roofing, and insulation.

Lumber Higher, Builders FirstSource Up

CME lumber ends higher on short-covering
Sept 3 (Reuters) - Chicago Mercantile Exchange lumber futures closed higher on Thursday amid short-covering that developed ahead of the long holiday weekend.

BLDR.Builders FirstSource, Inc.Ends the trading day up by 3.98%
Builders FirstSource, Inc. engages in the manufacture and supply of structural and related building products for residential new construction in the United States. The company provides prefabricated components, including floor trusses, roof trusses, wall panels, stairs, and engineered wood; aluminum and vinyl windows; and pre-hung interior and exterior doors, as well as assembles and distributes interior and exterior door units. It also offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products used in on-site house framing; millwork products, which consist of interior trim, exterior trim, columns, and posts; and other building products that include cabinets, gypsum, roofing, and insulation.
-Builders FirstSource is a builders supply that has several branches in the Atlanta - Athens Georgia area.
Visit www.coferadams.com for the latest lumber news.

Signs of economic recovery growing locally

The good news is the bad news is getting better.

June retail sales in the Pensacola Bay Area turned in the fourth-best performance among Florida's 20 major metropolitan areas, slightly trailing only Fort Walton Beach, Panama City and Melbourne.
Although still down 2.3 percent over same month in 2008, June's $453 million in taxable retail sales was a $60 million improvement over April's figures, and $33 million better than in May.
University of West Florida economist Rick Harper said the strong showing by Pensacola and Panhandle cities is due in large part to its huge military payroll.
"The fact that Pensacola, Fort Walton and Panama City had among the least bad retail sales and unemployment numbers across the state, is consistent with the fact this region has one of the heaviest shares of government and military employees," Harper said.

*** When parts of Florida pick up, it is a good sign for neighboring states. It shouldn't be long before housing picks up and the demand for lumber, plywood, OSB and other building materials increase. This is good news for every building material supply and lumber yard left standing. Reid Adams www.coferadams.com
www.coferadams.net