Actually I used to own a home in a very exclusive area that I paid through the nose for, and 300k is expensive in most of the US. Try doing some of the research you are accusing me of skipping. SoCal is a rotten case in point, as they have dinky one bedroom houses for 200k there, you cannot use silicon valley and innercity New York as housing cost standards.
The experts say it is 1k per house not 8k as below
Lumber Tariffs Could Boost New Home Prices
by Al Heavens
The price of softwood lumber - pine, fir, hemlock - has long been an issue with the residential construction and remodeling industries.
And for good reason. Residential construction accounts for 40 percent of softwood lumber consumed in the United States annually, according to the American Forest and Paper Association, and an additional 30 percent goes to remodeling and repair projects.
Softwood lumber accounts for about 20 percent of the cost of materials in a new house. A typical 2,000-square-foot new wood-framed house uses roughly 16,000 board feet of lumber and 6,000 feet of structural panels, such as plywood.
At $400 per 1,000 board feet, for example, the lumber package for a 2,000 square-foot house would cost nearly $10,000.
Including costs that rise in proportion to lumber costs, such as sales taxes, financing, real estate commissions, and permit fees, each increase of $50 per 1,000 board feet in wholesale lumber prices increases the cost of a new house by $1,000.
When this happens, the National Association of Home Builders has estimated, more than 378,000 individuals or families can no longer afford to purchase a new house.
There is an ongoing debate about softwood lumber prices that has focused, since 1996, on a five-year agreement between the United States and Canada that subjected lumber imported from four Canadian provinces to a tariff.
The agreement, which expired in 2001, required the Canadian government to impose export fees on softwood shipments in excess of 14.7 billion board feet a year. Though there are nuances in the agreement that exempt more lumber, in a year beginning April, the first 650,000 board feet exported after the quota was reached was subject to a tariff of $52.93 (in U.S. dollars) per 1,000 board feet.
On shipments above that level, the tariff rose to $106 per 1,000 board feet for lumber from Quebec, Ontario and Manitoba, and a maximum of $146 for lumber from British Columbia.
In a typical year, the United States imports 17 billion board feet of softwood from Canadian producers.
The NAHB maintained that from the moment the agreement went into effect in 1996, the average wholesale price of framing lumber had been about $400 per 1,000 board feet. By comparison, in 1995, the average price was only $329.
By the middle of 1999, propelled by heavy demand, the price was more than $450.
Another factor affecting prices, according to the home builders' association, is a restriction of supplies of timber from public lands in the West. Sales of timber from federal lands fell from 10.4 billion board feet in 1990 to 3.9 billion board feet in 1997, while supplies from the West declined by 23 percent from 1988 to 1998.
In those 10 years, imports from Canada grew by 32 percent. In 1998, 34 percent of lumber consumed in the United States came from Canada, compared with 31 percent over the previous 10 years.
Consumption of lumber increased steadily between 1995 and 2000, fueled by the residential building boom, though it eased a bit as the economy began slowing down the second half of 2000.
The home builders' association maintains that lumber prices in 1999, for example, were 59 percent higher than before supplies of federal timber were curtailed and Canadian lumber was subjected to tariffs.
The NAHB has been pushing for an end to tariffs. U.S. lumber producers, however, favor such protection.
On May 2, the International Trade Commission voted 4-0 to impose tariffs on Canadian softwood lumber imports beginning May 23. The ITC ruled that the provincial governments unfairly subsidize Canada's lumber industry by charging low fees to cut timber on public land. In a preliminary decision in 2001, the U.S. Commerce Department imposed an average duty of 32 percent on Canadian softwood. But the ITC, an independent body financed by Congress, said the 32 percent was too harsh a fine and ordered the U.S. government to refund the money to Canada.
The new amount is based on an 18.8 percent duty to cover subsidies, as well as a variable anti-dumping tariff of roughly 8.4 percent — depending on the company.
“The 27.2 percent tariffs on Canadian lumber imports are set to go into effect ... right at the heart of the spring home-building season,” said NAHB vice-president Bobby Rayburn. “If this entire tariff is reflected in U.S. wholesale prices, that will add more than $1,000 to the cost of building a new home. That's a very significant burden to place on home buyers.” The Canadian government is appealing the decision to the World Trade Organization and a dispute panel for the North American Free Trade Agreement (NAFTA).
