Cedar

1973 - I built a completely cedar home from a kit. It had cedar walls
inside and out - cedar shakes on the roof - cedar windows. Cedar wood is
full of air bubbles that make it excellent insulation. It also is
resistant to rot and bugs. Cedar wood breathes well. For 30 years - I
did not put a drop of paint or stain on that cedar wood - and it held up
perfectly. A simple pressure washing would bring it back to its new
appearance. The wood always dried out immediately.

You may have several problems with your builder - but wet cedar wood is
not one of them :-)

Here is my cedar home when I sold it last month -
http://homepage.mac.com/nancyeverhart/PhotoAlbum49.html

Harry