What is the impact of realestate recession on usa construction materials locally and globally?
Answer:
Usually a real estate recession has a lag to hit the construction industry. The majority of real estate ventures start planning many months to years before the start of construction. The money is secured, property bought, and many contracts signed. The long term goal of the project extends beyond the short term situation of the current real estate market. Thus when a recession hits, it slows the local building very little. Also you must keep in mind while the market may fluctuate on buyer vs seller on a local level, rarely do you see a recession in real estate that effects the ENTIRE country and definately not the world. The more driving force on price of construction materials is the actual supply of the materials, and gas prices. As the price of gas increases, the cost of the material delivery increases. This is especially significant in areas of multiple deliveries such as concrete and steel. The amount of supply is also crucial. Recently steel has been in short supply due to China purchasing much of the available scrap. This cause a large increase. In past years the low supplies were in drywall or insulation, and prices can double sometimes. These impacts can be very much international, and are rarely driven by a local real estate market.
Lumber price will drop if demand does.
The US realestate recession hasn't reached here in Canada yet. The homes are still selling and construction is still strong. That could change fast if the US economy really slows down.
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