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Skyrocketing Lumber Prices: Transforming The Apartment Construction Industry
Lumber prices increased by 280 percent between May of 2020 and May of 2021. The result? It cost an additional $7,300 to build an apartment compared to the year before. And that's just for lumber. To borrow from John Oliver there are two possibilities here. Either lumber inflation is out of control or that is one incredible two by four. I mean really world-class. The higher costs for lumber and other materials increase the cost of construction for all multifamily properties across the country. And since larger apartments use more wood building smaller apartments is a way to control any project's overall cost. As a result, developers choose to reduce the size of apartments to maintain profitability. In 2022 the average apartment size was eight hundred and eighty-seven square feet which is a drop of fifty-four square feet from ten years ago and a drop of thirty square feet from the year before.
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