(FORTUNE Magazine) – Here's a case where money does grow on trees. The sleepy lumber market -- as in sawing logs -- is looking like gold, circa 1980. Lumber futures prices recently rose to their preset limits -- up $5, then $10, then $15 -- for 14 days running. The composite price for 1,000 board-feet of framing lumber increased to an all-time high of $464. Rancorous litigation involving the northern spotted owl, an endangered species, has tied up 90% of the roughly three billion board-feet of timber sales from federal land that Congress approved in 1992. Says Daniel Goldy, consulting economist for the Western Forest Industries Association in Portland, Oregon: ''The Pacific Northwest is the Persian Gulf of timber, but virtually none is being sold.'' This contracting supply is causing a sort of lumber hysteria. Lumber accounts for about 10% of the cost of a new house, but buyers fret that home prices will rise when pricey boards hit the residential market. Says Robert MacKenzie, a New England builder: ''There is a feeling among consumers that there's a conspiracy out there.'' Yet companies with large private timberland holdings, like Weyerhaeuser, Willamette Industries, and Boise Cascade, claim profits in lumber are being offset by low prices in pulp, which goes into the recession-mired newsprint and kraft-paper industries. Says Doug Bartels, spokesman for Boise Cascade: ''We're suffering as much pain as gain.'' Tree huggers aren't convinced. Says Andy Stahl, an analyst for the Sierra Club Legal Defense Fund: ''The lumber industry, which claims to have a timber shortage, is still exporting logs hand over fist.'' With lumber fetching record prices, he argues that the restrictions have benefited the companies. Not to mention the owls.

CHART: NOT AVAILABLE CREDIT: FRANK O'CONNELL FOR FORTUNE/SOURCE: RANDOM LENGTHS CAPTION: FRAMING LUMBER COMPOSITE PRICES