In 2008 when the housing market crashed, many Denver area home builders had to find a new career. It was a tough time for many people as homeowners were defaulting on loans and losing their homes. Eight years later the same market is booming, but there aren’t enough experienced builders to go around to keep up with the demand.
This article by Reuters posted on Fortune.com describes the what’s holding up construction in Denver and its outlook for the future:
A Construction Worker Shortage Weighs on a Hot U.S. Housing Market
Eight years after the housing bust drove an estimated 30% of construction workers into new fields, homebuilders across the country are
struggling to find workers at all levels of experience, according to the National Association of Homebuilders. The association estimates that there are approximately 200,000 unfilled construction jobs in the U.S. – a jump of 81% in the last two years.
The ratio of construction job openings to hiring, as measured by the Department of Labor, is at its highest level since 2007.
“The labor shortage is getting worse as demand is getting stronger,” said John Courson, chief executive of the Home Builders Institute, a national nonprofit that trains workers in the construction field.
The impact is two-fold. Without enough workers, residential construction is trailing demand for homes, dampening the overall economy.
And with labor costs rising, homebuilders are building more expensive homes to maintain their margins, which means they are abandoning the starter home market. That has left entry-level homes in tight supply, shutting out may would-be buyers at a time when mortgage rates are near historic lows.
Nationwide, there are 17% fewer people working in construction than at the market peak, with some states – including Arizona, California, Georgia and Missouri – seeing declines of 20% or more, according to data from the Associated General Contractors of America.
The labor shortage is raising builders’ costs – and workers’ wages – and slowing down construction.
Read the complete article here: A Construction Worker Shortage Weighs on a Hot U.S. Housing Market
The first couple minutes of this video is from the point of view of Dan Moyle, a real estate agent with Amerifirst Home Mortgage, about the same article as above. He mentions that people might have the construction loan to build the home they’ve always dreamed of, but there aren’t enough skilled contractors to fill the demand. It’s interesting to hear how the shortage of home builders affects the people selling the homes as well as those buying them:
This tweet is advertising the need for construction workers in the Front Range area. The hashtags say it all. It’s great for contractors such as roofing companies in Denver because of the constant flow of work, but bad for the individuals wishing to build their dream home:
— RemX_Jobs (@remxjobs) September 9, 2016
As 2016 is closing in on the end of the busiest period with home building, it will be compelling to see what 2017 brings. Will the hot housing market cool down? And will Denver be able to support the growth of skilled laborers?