Price gouging ?

[whbonney26]

Reasonable priced houses are selling in days at list price.
Lumber prices are up 40%.

40%? Since when?

Since December lumber prices are over 200% increase. Up over 400% since earlier in 2020. I have seen this first hand doing appraisals on on new construction homes in the area (St. Tammany - Tangipahoa). Real world increases in our area. Its absolutely nuts right now.



Edit; I went ahead and googled an article to show what I mean.

https://www.lsuagcenter.com/profiles/jmorgan/articles/page1621518623081

 

[flyboy]

I regularly get contacted by realators to see if I am willing to sell my residence, of course I am not. Then they also inquire about my vacant undeveloped property that own if I will be willing to sell that, of course I am not willing to sell any of that either. I also have had logging companys contact me about me to sell the timber off of my property and then they offer me little to nothing for it so I turn them down also. I dont want a fortune for my timber if it sells but I want to paid a reasonable/equal value for what it is worth.

 

[dantheman]

This question really has nothing to do with selling my house . I think some of you get the analogy .

 

[flyboy]

This question really has nothing to do with selling my house . I think some of you get the analogy .

Yes, "How much is too much". In my opinion, it is not too much if some one is willing to spend the money for the asking price. An item is only worth what some one is willing to pay for it. A seller can ask any price they want for their item. A buyer does not have to purchase it if they find the item is not worth it to them for the asking price.

 

[JBP55]

40%? Since when?

Since December lumber prices are over 200% increase. Up over 400% since earlier in 2020. I have seen this first hand doing appraisals on on new construction homes in the area (St. Tammany - Tangipahoa). Real world increases in our area. Its absolutely nuts right now.



Edit; I went ahead and googled an article to show what I mean.

https://www.lsuagcenter.com/profiles/jmorgan/articles/page1621518623081

Quote from a builder this year.
Below is a price increase in the last year.

Record-High Lumber Prices Add $24K to the Price of a New Home
Filed in Advocacy, Material Costs on February 22, 2021 • 94 Comments

Lumber prices have skyrocketed more than 180% since last spring, and this price spike has caused the price of an average new single-family home to increase by $24,386 since April 17, 2020, according to NAHB standard estimates of lumber used to build the average home. Similarly, the market value of the average new multifamily home has increased by $8,998 over the same period due to the surge in lumber prices.

The latest Random Lengths prices as of mid-February show the price of framing lumber topped $975 per thousand board feet — a 180% increase since last April when the price was roughly $350 per thousand board feet.

NAHB calculated these average home price increases based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs. Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses), sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.

The softwood products considered include lumber of various dimensions (including any that may be appearance grade or pressure treated for outdoor use), plywood, OSB, particleboard, fiberboard, shakes and shingles — in short, any of the products sold by U.S. sawmills and tracked on a weekly basis by Random Lengths.

 

[Vigilante Sniper]

This question really has nothing to do with selling my house . I think some of you get the analogy .

I get your analogy, current prices for Ammo, Primers, and Powder are being sold for way more than they should during this temporary shortage, yet people who failed to stock up for their own use are paying $100-$300 per 1000 primers when they cost $35. What if I bought 50 generators for $600 each and a hurricane came through and people would be out of power for weeks and I decide to sell my extra generators for $1200 each, would that be considered price gouging?

 

[southerncanuck]

What if I bought 50 generators for $600 each and a hurricane came through and people would be out of power for weeks and I decide to sell my extra generators for $1200 each, would that be considered price gouging?

Only if you were the only person selling generators. Otherwise that'd just be considered capitalism.

 

[davidd]

Only if you were the only person selling generators. Otherwise that'd just be considered capitalism.

Or investing.

 

[dantheman]

Only if you were the only person selling generators. Otherwise that'd just be considered capitalism.

Interesting point .

 

[Forgotten]

Too bad they stopped making trees. if only wood was a renewable resource we wouldn't have this problem.

 

[Magdump]

Apparently the public school system no longer teaches Free Enterprise.

 

[Trailboss]

I'm not an economist or politician, but IMHO:

Price gouging only applies when the buyer HAS NO CHOICE but to buy the item. If the buyer can live without the item (ie: can choose whether to pay the price or pass), price gouging does not apply.

If the buyer HAS to buy gas to go to work, and you have the only gas available at $50/gal, that may be considered price gouging. Or if the water supply is contaminated and you immediately raise the price of water from $1 to $10/pint, you might be a price gouger.

If the buyer has 2 boxes of 9mm at home, but wants more so he can practice or enter a competition, he really doesn't HAVE TO buy your 1000 round case of ammo you're selling for $3200, so that's not price gouging. If someone had the opportunity to purchase a pistol and ammo prior to a local increase in home invasions but didn't plan ahead, and now has to pay 5 times the price of a year ago before the demand skyrocketed, that's poor planning on the buyer's part, not price gouging.

That said, I am morally not inclined to take advantage of other's misfortunes. I would probably GIVE gas or water to someone in dire need, but not discretionary items. I have traded for guns and ammo using current values so actual monetary value didn't enter into play. But if I have to sell something to buy a new gun or more ammo, my sales price would have to be at market value since I'm buying at current market value. You don't HAVE to buy it if you think it's too high.

 

[whbonney26]

Quote from a builder this year.
Below is a price increase in the last year.

Record-High Lumber Prices Add $24K to the Price of a New Home
Filed in Advocacy, Material Costs on February 22, 2021 • 94 Comments

Lumber prices have skyrocketed more than 180% since last spring, and this price spike has caused the price of an average new single-family home to increase by $24,386 since April 17, 2020, according to NAHB standard estimates of lumber used to build the average home. Similarly, the market value of the average new multifamily home has increased by $8,998 over the same period due to the surge in lumber prices.

The latest Random Lengths prices as of mid-February show the price of framing lumber topped $975 per thousand board feet — a 180% increase since last April when the price was roughly $350 per thousand board feet.

NAHB calculated these average home price increases based on the softwood lumber that goes into the average new home, as captured in the Builder Practices Survey conducted by Home Innovation Research Labs. Included is any softwood used in structural framing (including beams, joists, headers, rafters and trusses), sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences and landscape walls.

The softwood products considered include lumber of various dimensions (including any that may be appearance grade or pressure treated for outdoor use), plywood, OSB, particleboard, fiberboard, shakes and shingles — in short, any of the products sold by U.S. sawmills and tracked on a weekly basis by Random Lengths.

Yeah, its went up even since then. That 180% was about two-three months ago. We had to start putting the info in that article in our appraisals around Feb. and have had to amend it a couple times since due to the prices continuing to rise.

 

[JBP55]

Definition of Price Gouging
Noun

The practice of raising prices on certain types of goods and services to an unfair level, especially during a state of emergency.
What is Price Gouging
Throughout history, enterprising people have recognized the advantage of having certain supplies or products, or being able to provide certain services, in times of upheaval. For instance, when a hurricane makes all of the water in a given area undrinkable, a shopkeeper who has a large supply of bottled water might make a very good profit. It is this taking advantage of a bad situation, raising prices for much-needed supplies or services to an unfair, or even unethical level, that is considered price gouging.

The most common items used in price gouging include food, water, gasoline, and medications. Services such as plumbing repair, heating repair, roofing repair, and other services desperately needed by many in a state of emergency, are also subject to price gouging. Price gouging is against the law, though the laws vary by state.

Example of Price Gouging in Natural Disaster
A hurricane is about to strike the coast of Alabama, and the power is expected to be out in many cities and towns up and down the coast. Packages of *C* batteries, which are commonly needed to power flashlights, emergency radios, and other devices, usually run about $5.00.

With so many people heading into local stores to stock up on emergency supplies, some merchants hoist their prices, charging $10.00 per package of *C* batteries. In this example of price gouging, the 100% increase in price during a declared emergency would be considered illegal in many states.

Price Gouging Laws
While many states have price gouging laws to protect consumers, there are no federal laws regulating this practice. Price gouging laws have, however, been held as constitutional, as law enforcement authorities and local governments have the authority to preserve order, and protect the common good during an emergency.

In most states with price gouging laws, the act is defined by the presence of three criteria:

Emergency or Crisis Situation – applies to abrupt price increases during a time of disaster or other emergency
Essential Items or Services – applies exclusively to items or services that are essential to survival
Price Limit – sets a limit on the price that can be charged for essential goods or services
As of 2016, 34 states have enacted price gouging laws. A handful of states impose criminal charges on top of civil liability when a business is found guilty of price gouging, though most give prosecutors broad discretion whether to pursue such criminal charges. Penalties for price gouging also vary widely, depending on the jurisdiction.

People who support price gouging laws make the point that taking advantage of people during a disaster or crises is morally wrong, and that those guilty of the practice should face criminal charges. Those opposing such laws argue that, if consumers are willing to pay the price asked for goods or services, the business cannot be blamed.

 

[DaggerBlade]

Another post that is spot on!!!

I'm not an economist or politician, but IMHO:

Price gouging only applies when the buyer HAS NO CHOICE but to buy the item. If the buyer can live without the item (ie: can choose whether to pay the price or pass), price gouging does not apply.

If the buyer HAS to buy gas to go to work, and you have the only gas available at $50/gal, that may be considered price gouging. Or if the water supply is contaminated and you immediately raise the price of water from $1 to $10/pint, you might be a price gouger.

If the buyer has 2 boxes of 9mm at home, but wants more so he can practice or enter a competition, he really doesn't HAVE TO buy your 1000 round case of ammo you're selling for $3200, so that's not price gouging. If someone had the opportunity to purchase a pistol and ammo prior to a local increase in home invasions but didn't plan ahead, and now has to pay 5 times the price of a year ago before the demand skyrocketed, that's poor planning on the buyer's part, not price gouging.

That said, I am morally not inclined to take advantage of other's misfortunes. I would probably GIVE gas or water to someone in dire need, but not discretionary items. I have traded for guns and ammo using current values so actual monetary value didn't enter into play. But if I have to sell something to buy a new gun or more ammo, my sales price would have to be at market value since I'm buying at current market value. You don't HAVE to buy it if you think it's too high.

 

[dantheman]

One of these days , possibly in the near future , the price of an AR15 is going to go through the roof ( again ) . When that happens I plan on selling that new in the box AR that's sitting in my safe for WAY more than I paid for it . Someone will get mad and call me names and probably create a new thread just to complain about people like me . I see that some of you here " get it " .

 

[southerncanuck]

One of these days , possibly in the near future , the price of an AR15 is going to go through the roof ( again ) . When that happens I plan on selling that new in the box AR that's sitting in my safe for WAY more than I paid for it . Someone will get mad and call me names and probably create a new thread just to complain about people like me . I see that some of you here " get it " .

Don't you know the BayouShooter sales protocol by now? You're supposed to sell things for below-cost so you don't hurt the feelings of the guys who weren't gonna buy it anyway.

 

[Mannelite]

So , if I bought my house for 175k years ago and I listed it today for 250k , would I be price gouging ?

no you're adjusting for inflation, if you price your house in gold, or another commodity, you maybe surprised to find that 250k isn't enough and you're actually selling it at a discount.....

For instance, lets say you bought your house in 2004, Gold in 2004 was about 400/oz. Today gold is 1900/oz.

So in 2004 you bought your house for 437.5 oz of gold. Today even though you have it listed for 250k, thats only actually 131 oz of gold.....

So compare your house price to a commodity price at the time you bought it, and compare it to the price of the same commodity today... try it with a few different commodities. The markets are so inflated right now thats the best way you are going to get an accurate valuation...

Also, try to see what is available in your area to buy that you will be able to afford if you sell your house, I was thinking about doing the same thing after seeing my home value appreciate, but then I saw that everything else available in my area is over my price range.

 

[JBP55]

no you're adjusting for inflation, if you price your house in gold, or another commodity, you maybe surprised to find that 250k isn't enough and you're actually selling it at a discount.....

For instance, lets say you bought your house in 2004, Gold in 2004 was about 400/oz. Today gold is 1900/oz.

So in 2004 you bought your house for 437.5 oz of gold. Today even though you have it listed for 250k, thats only actually 131 oz of gold.....

So compare your house price to a commodity price at the time you bought it, and compare it to the price of the same commodity today... try it with a few different commodities, the S&P 500 etc. The markets are so inflated right now thats the best way you are going to get an accurate valuation...

Also, try to see what is available in your area to buy that you will be able to afford if you sell your house, I was thinking about doing the same thing after seeing my home value appreciate, but then I saw that everything else available in my area is over my price range.

True, and the shortage of wood does not make firearms cost more or go up in value.

 

[Magdump]

One of these days , possibly in the near future , the price of an AR15 is going to go through the roof ( again ) . When that happens I plan on selling that new in the box AR that's sitting in my safe for WAY more than I paid for it . Someone will get mad and call me names and probably create a new thread just to complain about people like me . I see that some of you here " get it " .

Don’t even sweat it Dan. It’s already happened to me. I met the member halfway when he mentioned seeing a rifle that HE felt was priced too high and I knew he was talking about my ad. I rebutted his claim because I can ask whatever I think I can get for my property and he doesn’t dictate asking prices, nor does any other member here. What does dictate a selling price is partly the market and partly the seller’s desire to sell. If it’s indeed priced too high, it’s reasonable to assume it won’t sell. I sold the rifle the next day and the buyer said he thought the price was fair, considering what was included and the gun being new in the box.
So, if someone says something is priced too high, that usually only means that it’s more than they are willing to pay. That doesn’t mean every other member won’t gladly pay that price to have what they want.
I’ve gotten more than one PM from members griping about my asking price and I always say the same thing. It’ll sell at this price or I’ll keep it. It’s extremely rare that I don’t find a buyer.