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JOE MAYFIETD president of the Lumber Merchonls Associotion of Northern Colifornia 1516 El Conino Rol, Sullr 0 los Altor, Co. 91022 (4r51 94r-t6t7

T HE industry boom has passed I' and we are now at a point ofhoping for continued good sales to the walk-in customer.

With the prime interest rate at l2%o it is obvious that the averase citizen is thinking twice about buildiig or buying a home. The average three bedroom home of approximately 1,800 square feet is priced at $40,000 in the metropolitanl areas. This means the average family must have a $20,000 annual income iust to buy an average home. Most families do not have this amount of income unless both the husband and wife are working at good paying jobs. Is there any wonder then that the industry is in a recession?

Unions are demanding higher wages which will drive the construction costs even higher. Steel, aluminum, glass, and plastics-remain in short supply and their high prices again increase the cost ol constructron.

Lumber prices eased and inventories are high. In recent years the c6st of lumber and wood products alcounted for only 25Vo of the total price of a home. At the current rate this figure will drop by the end ofthe year to20Vo.

Government economists are attempting to arrest the spiraling inflation and are willing, it seems, to accept a recession (not a depression) to achieve stabilization of the economy. Production of lumber has far exceeded the demand. The same is holding true in the meat and poultry industry. There is 42Vo more pork and beef in freezer inventory now than last year. Cattlemen are concerned over the average loss of $60 per head in the leed lots but you can't turn the cattle back to grazing. Poultry producers are in a quandry because they have 887o more poultry in freezer inventory now than last year. They have also destroyed untold number ofchicks.

In our industry we have a dual problem. Some items required are soaring out of reason while lumber products will obviously decline. Federal housing programs appear to be out for the rbmainder of this vear anii 3inci the administration is determined to make drastic cuts in the budeet. exceot for defense spending and foreign aid, it is question-able wheiher a housing program of any significance will mature next year.

The Federal Housing Prosram reouired 26 million new housing starts between lg08 aia 1978 jirst to meet rhe nation's current needs. This does not consider obsolete homes, nor does it include homes considered as sub-standard. Since the original study was made, the Renfort Corporation has made a further study and indicates that even 28 million starts during the ten yeai period may be a low estimate. Just to meet thE goaf would require 2.8 million starts per year. 1972-73 was the biggest housing boom in history and we were at full production yet we only achieved 2.4 million new starts. We are ap- proximately 4 million housing starts behind schedule with the program almost half over.

-The.current Mayors' Conference placed two items at the top of their agenda and priorities lists. One was revenue sharin! and the other was housing. Why then, if so many people in high official offices agree on the problem is it so difficirlt to move our legislators into positive action?

Since no one has a ready answer we must fall back onto the walk-in traffic and hope that the homeowner continues his current interest in repairing and remodeling his home. In the meantime we shall cbntinie to press our iigislators into actions that will improve our preserit plight.