Why a Homebuilding Boom May Still Be Far Off - Real Estate, Updates, News & Tips

Why a Homebuilding Boom May Still Be Far Off

Many markets are calling for greater new-home construction to meet buyer demand and counter housing shortages plaguing many areas. But the homebuilding industry is facing a big challenge in meeting that call: They can’t find enough skilled workers. The Bureau of Labor Statistics Job Openings and Labor Turnover Survey shows that nearly 200,000 construction industry jobs are unfilled across the country, an increase of 81 percent in just two years. The unemployment in the construction industry is at 4.5 percent, the lowest in a decade. That is putting increased pressure on foremans, project managers, and developers. Further, builders are, in some cases, being forced to stretch delivery times for the homes they are building by weeks or even months. “The shortage is worse than you’ve heard,” says George C. Hess III, CEO of Vantage Homes Corp., which operates in the Colorado Springs area. Vantage Homes builds, on average, 120 to 150 homes a year. Hess says they could have done 20 more units last year if they had more workers. Many workers fled the industry following the housing downturn. As the market rebounded years later, the industry is finding the workers didn’t return. The financial challenges from the labor shortage are causing more builders to devote most of their attention to luxury projects to help recoup the added costs from delays, Curbed.com reports. The lack of trained labor in the residential construction industry is “far and away” the number one issue facing the homebuilding industry today, says John Courson, president and CEO of the Home Builders Institute. “There’s been a pretty solid drumbeat for the last few years,” he says. “But I’ve never seen it rise to the crescendo it did last month. It’s a huge shift from the halcyon days of homebuilding between 2000 and 2006.” The industry is starting to invest in vocational education in response to the labor shortage. For example, HBI is focusing on educational programs that target at-risk youth, ex-offenders, and veterans to help these populations find immediate job opportunities that don’t require a college degree. HBI is also pushing for more vocational programs at high schools to help students partner with professionals for internship opportunities. Source: “Construction Boom Exposes Labor Shortage Threatening Homebuilding,” Curbed.com (Feb. 1, 2017)

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