One of the reasons homes here in Southern California are selling for record-breaking prices this year is that the price of lumber has increased by 377% in the past 12 months. Crazy, right? When lumber is so expensive, it's obviously more costly to build new homes. That's one of the reasons we're in such a strong seller's market right now in Socal!
Normally, new homes being built adds new supply to the market to help "balance" things out between buyers and sellers. With building materials so high this year, you can only build a single home for the same amount of lumber budget that used to build multiple homes.
The good news is that all of this is temporary. The market will eventually balance itself again to normal prices. Until that happens, wood is the new gold!
-Berroni
