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Published: Sunday, 9/4/2005

Area builders feel hurricane s impact in price rise for materials

BY MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER
The cost of panels used for wall and roof sheathing has gone up 10 to 20 percent. The cost of panels used for wall and roof sheathing has gone up 10 to 20 percent.
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Perrysburg builder Laurie Melchior Huskisson was glued to her television set last week, humbled by the total devastation wrought by Hurricane Katrina.

She admitted to briefly wondering what impact the disaster and its aftermath will have on the prices of materials Melchior Building Co. uses to construct upscale homes in northwest Ohio. It s certainly crossed our minds, but I m being stupidly optimistic, thinking we ve gotten price spikes after other hurricanes, but we ve been OK, she said.

While New Orleans and other communities continue to dig out from one of the worst natural disasters in the nation s history, Toledo area builders and lumber yards are feeling the storm s impact.

Local lumber yards report a 10 to 20 percent increase in the cost of the sheets of wood most often used for wall and roof sheathing, and builders are fearing spikes in the costs of materials that use petroleum, such as roofing shingles, vinyl siding, and PVC piping.

All worry about the rising gas prices starting to affect deliveries from suppliers.

Evacuations and damage have wreaked havoc on the oil platforms and oil rigs in the Gulf Cost, an area that produces one-third of U.S. oil and refines nearly half the nation s gasoline.

Tim Schlachter, president of the Home Builders

Association of Greater Toledo Inc., said area builders have weathered price spikes on materials after natural disasters put the commodities in short supply, but the current situation is going to be worsened by rising fuel prices.

I think with most of our suppliers, we re going to see some type of transportation surcharge which is going to be directly related to the cost of gas and diesel, said the president of Buckeye Specialty Homes.

Jim Harms, president of Wayne Lumber in Toledo, said mills that make the wood panels have taken them off the market because they are tough to price.

In the past year, the price on a sheet that is seven sixteenths of an inch wide has fluctuated between $7 and $16. Before Katrina, a sheet was priced at $9. It climbed to $10.50 before the mills stopped pricing it, Mr. Harms said. Other yards report quotes climbing to $12.99 a sheet.

Michael Carliner, an economist with the National Association of Home Builders in Washington, said the prices on some materials, most notably roofing and plywood, are going to be significantly affected as residents in Louisiana, Mississippi, and Alabama first try to repair what they can and then start the long rebuilding process.

After Hurricane Andrew, prices on wood went up 50 percent, Mr. Carliner said. I don t think it will go up quite that much but a lot of stuff is going to be diverted down there so you may feel an impact in Toledo.

But the bigger concern right now for area retailers and builders is the rising gas prices.

Said Ron Gladieux, Sr., of Gladieux Do It Best Home Center in Oregon, It is a huge problem with almost anyone who is putting trucks on the road and has outside sales people.

Assessing a fuel surcharge is inevitable, he said.

In anticipation of Katrina, Mr. Gladieux ordered in enough wood to fill all his existing orders and to have 3,000 sheets on hand. Some experts said that although mills making wood sheathing panels weren t affected by the hurricane, the storm dealt a psychological blow.

Also, makers of gypsum, used for wallboard, have had to reduce production because of the lack of natural gas from the Gulf, experts said. That could lead to higher home product prices.

Most mills that handle treated wood seemed to be doing well, experts said.

Melchior Building s Ms. Huskisson said customers currently under contract don t have to worry about the price spikes. You can pass increases on if you know about it in advance, she said.

Fellow builder Mr. Schlachter said that, if someone would bid a house with him today, he probably could hold for three months to the price he quotes.

If you see a house you like right now but are going to wait until spring to sign a contract, the cost of that house is going to go up, he said.

Contact Mary-Beth McLaughlin at: mmclaughlin@theblade.com or 419-724-6199.



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