Unsold homes at 5 year low

Timber Industry Report
By Rick Sohn,
Umpqua Coquille LLC

Spring prices are holding in studs, and unsold home inventory is the lowest in 5 years. Four-year trends of lumber, logs, housing, and mortgage statistics are shown below.

Information and interpretation.

The best news this month is the unsold home inventory, dropping below 6 months in Portland, for the first time since 2007, and it dropped to 5 months!

The March Mortgage interest rates are staying impressively low, bouncing near the bottom. Rates have been reported below 4% for the last 5 months in a row. The lowest is 3.89%. And home sales are responding. Realtors say they are busier, and stats indicate more closed sales.

While studs are holding their spring rally, its been since Spring 2010, and then Spring 2006, since we had studs over $300. How about $600 Average Douglas Fir 2 Mill Log prices? Not once since 2007, and we are still waiting. Good news: some mills tell me they are adding production.

While national housing starts dropped, building permits are up nicely, the highest in 4 years. Lets hope the housing starts number is an aberration, when we look back in a couple of months. It’s the only weak spot this month, in the markets we follow.

Data reports used with permission of:
1) Random Lengths. 2”x4”x8’ precision end trimmed hem-fir studs from southern Oregon mills. Price reported is Dollars per Thousand Board Feet for the most recent week. One “board foot” of product measures 12 inches by 12 inches by one inch thick.

2) RISI, Log Lines. Douglas-fir #2 Sawmill Log Average Region 5 price. Current report is for the prior month. Dollars per Thousand Board Feet of logs are reported using standardized log measurements from the “Scribner log table.”

3) Dept. of Commerce, US Census Bureau. New Residential Housing Starts and New Residential Construction Permits, seasonally adjusted, annual rate. Current report is for the prior month. Recent reports are often revised in bold. Also, major revision made each May, reaching 21/2 yrs back.

4) Regional Multiple Listing Service RMLSTM data, courtesy of Janet Johnston, Prudential Real Estate Professionals Broker, Roseburg, OR. Inventory of Unsold Homes (Ratio of Active Listings to Closed Sales) in Portland Oregon, for most recent month available.

5) Freddie Mac. Primary Mortgage Market Survey. 30-year Fixed Rate Mortgages Since 1971, national averages. Updated weekly, current report is for the prior full month.
Issue #5-4. © Copyright Rick Sohn, Umpqua Coquille LLC. For permission to reprint for nominal fee, Email [email protected]

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