Demand for outdoor living spaces, already booming before the COVID-19 pandemic, surged to a fever pitch during 2020’s blockbuster new housing and remodeling markets. Stay-at-home orders made personal outdoor spaces a refuge for residents; in a survey of 1,300 homeowners conducted by realtor.com and Toluna Insights in April 2020, respondents cited outdoor spaces among their “must-haves” in a home purchase.
Now, as COVID-19 restrictions ease in many parts of the country, outdoor living areas take on a new role as safe gathering spaces for reuniting family and friends. However, as the housing boom continues, the industry has not been without its difficulties—and nowhere is this more pronounced than decking, affected as it is by the rocketing price of lumber.
The latest Producer Price Index reports a 1.7% increase in the price paid for goods used ex-energy in residential construction in April, and 12.4% over the previous 12 months. Prices paid for softwood lumber rose 6.5% from March to April, according to the PPI, following an 88.5% increase between April 2020 and September 2020, a 22.9% drop between September 2020 and November 2020, and a 52% rise from November 2020 to April 2021.
The story of lumber prices’ effect on decking, wood and composite alike, is similar to its effect on housing—creating a perfect storm of uncertainty around high prices and high demand, with concerns looming around affordability. Here’s how industry professionals are navigating this maze of cost and supply, and how they believe it will evolve into the future.
Popularity and Trends
Preferred styles of outdoor living vary widely across regional lines. According to the U.S. Census Bureau’s 2019 Survey of Construction, only 20.3% of single-family homes started in 2019, including both attached and detached homes, were built with decks. Decks are most commonly found on new homes in the New England region, where 63% of new-home starts included a deck in 2019, followed by the West North Central region (43%), East South Central region (42%), and Middle Atlantic (39%). Decks are much less common in the Pacific (21%) and Mountain regions (23%), and only 4% of new-home starts in the West South Central region, which includes Texas, had a deck in 2019.
According to data from Home Innovation Research Labs, the share of new single-family detached homes with decks has hovered between 35% and just over 40% since 2013 and currently stands at about 35%, up slightly from last year. The share of homes with front porches has risen from 2019 to 2020, up from approximately 65% to 70%, while the share of new homes with patios or pool decks has fallen slightly, down just under 40%. Side and rear porches, which have tripled in popularity since 2013, rose slightly year over year to almost 30% in 2020.
The average size of patios and pool decks in new single-family homes rose from 250 square feet in 2019 to roughly 280 square feet in 2020. The size of new decks has risen slightly to about 260 square feet in 2020, while the size of screened-in porches is down to about 220 square feet, and side or rear porches have seen no change in size.
The vast majority of deck surfacing is either composite or treated wood, which have shifted positions as the most popular decking material many times from 2013 to 2020. Right now, treated wood is the most popular at 45%, followed by composite at approximately 37%. Untreated wood has risen sharply in popularity in the past year, up from 3% of new homes in 2019 to almost 10% in 2020, while cedar, redwood, PVC and other plastic, and other surfacing types make up less than 5% of the market each.
For context on the value of a deck we can look to Zonda’s 2021 Cost vs. Value report, which compares the average cost of 22 remodeling projects with the value of those projects at resale. The cost of a standardized wood deck addition, which has risen steadily over the past eight years, jumped from $14,360 in 2020 to $16,776 in 2021. The value of that same deck also rose slightly, up from $10,355 in 2020 to $11,038 in 2021, but not enough to keep pace with cost. The Cost vs. Value for a wood deck addition fell to 66% this year, down from 72.1% in 2020. This marks the lowest report result for deck projects since 2010, as well as the first time since 2010 that the Cost vs. Value for wood decks has fallen below 70%.
Impact on Projects
At the ground level, Cedarbrook Outdoor Design/Build founder and president Mike Arneson has only one word to describe the day to day of his decking business: Crazy. “I’ve been in this industry since 1996, and I’ve never experienced anything quite like this,” he says.
The Mount Airy, Maryland–based firm, highlighted in the 2019 Remodeling Big 50, specializes in new and existing deck projects, including custom designs, for clients across mid-Maryland. Right now, that client volume is at a record high. While Cedarbrook usually has a three- to four-month backlog of contracts in a given year, it is currently operating at a wait time of six to eight months from contract to construction—a time frame that has not in any way put off customers.
“Things shifted because of COVID, just because everyone [was] forced to be home … so they were investing in their home and making it more enjoyable, more comfortable. I think that’s really what sparked most of it,” Arneson says.
While he had expected this demand to tail off as summer started, Cedarbrook remains busy with no drop-off in calls. “As a business owner, the demand is high, so you’re excited,” says Arneson. “But right now it’s very challenging for us, because to get any kind of job from contract to construction, there’s a time gap in between. And the prices are rising so fast that you’re losing margin on every job.”
Chris Warner, principal owner of Plainfield, Illinois–based remodeling contractor Warner’s Decking, is also feeling a crush of demand, with projects contracted six to eight months in advance, or sometimes as long as a year. “Lead times have extended quite a bit because of demand, and obviously labor is hard to come by these days,” Warner says. “We’ve [also] seen larger projects and more roof structures than we have in the past … [and] when people want them, they’re willing to wait for what they choose.”
Arneson cites rising material costs as the biggest challenge in his projects. His firm recently added a clause to its contracts, stating that the contract will cover up to a 5% increase in project material costs, but that a higher increase will result in an adjustment to the contract and price. “We didn’t have that earlier on,” he says. “So we’ve been holding honest to our pricing and honoring all the contracts we had. But we’ve done it at a loss, so it’s been challenging.”
Cedarbrook offers pressure-treated wood, tropical hardwood, composite, and PVC as deck flooring options to customers, but constructs most of its deck frames out of natural wood. “I don’t understand why lumber has gone up three times the cost, in some cases five times the cost of what we paid for it a year ago. We used to get one or two price increases a year, now we get one or two a month,” Arneson says.
Product availability is also a rising concern for the contractor. Arneson keeps a good relationship with vendors who keep him informed of anticipated shortages, allowing him to put in job lot orders and set materials aside well in advance of any issues. While he is open to substituting different product sizes or material types in projects if a preferred product is not available, he has not yet had to do so.
“We haven’t had anything where we couldn’t get it, we just had some scenarios where we had to wait longer,” he says.
Warner’s Decking has taken a different approach. In the face of rising wood prices, the contractor has stopped building decks with natural wood altogether.
“We stopped doing wood and cedar, due to the fact that it’s hard to get,” he says. “We’ve been composite only. It doesn’t make sense for us to look for [wood], due to the extremely high price.”
Alternative Materials
According to Chris Gerhard, vice president of sales for composite decking maker Trex Co., composite decking sales rose far beyond projections starting in April 2020. The company reports it has expanded its manufacturing capacity by 70% to keep up with demand. At the same time, many composite manufacturers have announced price increases on their product lines, according to Gerhard, owing to a rise in raw material and transportation costs.
“We are seeing wood prices that are double the five-year composite average,” Gerhard says. “You couple rising wood decking prices with availability, and it really accelerated the conversion opportunities for Trex and composites, because the [price] gap has narrowed significantly between wood and composite.”
The cost of a composite deck addition has consistently been much higher than a wood deck addition of the same size and specifications. The average cost of a composite deck project came in at $22,426 this year, up almost $3,000 from 2020, while the value inched up to $14,169. At 63%, the Cost vs. Value for a composite deck addition is only slightly lower than for a wood deck.
“We’ve been fortunate in that the COVID environment has heightened demand for our products,” says Gerhard. “Pre-COVID was robust, too, but I think the new environment of people spending more time at home, seeing a logical extension of their home being outdoor living, has hit a chord for us in Trex products and in outdoor living as a whole. I wouldn’t put it all on the shoulders of people being at home, but I think it’s a project that facilitates a better style of living in this environment. Decks are typically one of the cheapest additions to your home that can add immediate value.”
Beyond decks and decking, the supply chain squeeze has affected all types of outdoor living spaces. Baldwin & Sons, a new-home builder active in Orange County and San Diego, typically builds California rooms given geographic and consumer preferences in its markets. These indoor-outdoor spaces are built on pavers, and they serve as an extension of an interior room with ceiling cover and one or two sides open to the outdoors.
“Depending on the size of the room and finishes specified, California rooms can range from $15,000 and up,” says Melissa Hazlett, vice president of sales and marketing for Baldwin & Sons. “Like all home builders, we have been impacted by building material shortages so the ranges are rising. We are working extra closely these days with our trade partners to secure all materials, while simultaneously identifying additional suppliers and alternate materials of equivalent quality. We anticipate it will take time for the supply chain to normalize and costs will increase for the time being as a result.”
Where Does It Lead?
NAHB reports that framing lumber prices have risen by over 300% since April 2020, raising the price of a new single-family home by nearly $36,000. The Random Lengths Framing Lumber Composite measure hit a low of $600 per thousand board feet in November 2020 and peaked at roughly $1,500 per thousand board feet in mid-May.
Prices have fallen steadily since that date, down below $1,200 per thousand board feet as of June 18. While this may serve as a sign of relief for lumber, the future remains uncertain. Many other product types used in decking still face similar supply chain struggles, and even below its peak price, lumber, and thus decks, remain more expensive than ever before and may stay that way as long as supply and price disruptions continue.
