Sales of New Homes Are on a Tear, But Builders Cannot Find Enough Employees to Stay Alongside of the
Sales of new houses are on a tear, but builders can not find enough employees to stay alongside of the demand.
After the housing bust, many workers left the building trade in droves, announced Michael Fink, CEO of Leewood Real estate Group in Trenton, N.J.
"A lot of our employees are immigrants and they went back to their home countries," he revealed. "Our contractors can't get people; they can't start on time; they can not get things done on time."
The national Association of Home Builders ( NAHB ) reported in March that 46% of its members say they have fallen behind schedule on finishing projects, 15% turned down jobs and 9% lost or canceled sales because they cannot find enough employees.
That could have some enormous implications for the broader housing market. Housing starts fell sharply in April to 853,000 and pros project residential construction will grow by approximately 25 percent annually, according to the NAHB. At that pace, it may take more than four years to get back to early 2006 building levels, when housing starts topped at 2.3 million, according to Census Bureau info.
Related: Builders hold lotteries for enthusiastic consumers
The lack of new inventory will add pressure to home prices, which have already climbed by double-digit pc.s. During quarter one, home prices rose an average 10.2% -- the biggest gain since 2006, in the opinion of the Case-Shiller national home price index.
After the housing bust, construction fell off a cliff and many workers progressed on to other jobs or they retired. With the supply of skilled employees short, sub-contractors have had to raise salary.
The competition for employees has gotten so heated that some construction companies are even poaching workers off each others ' job sites, according to Jan Maly, president of JM Maly, a construction company in the Houston area that builds tall apartments, faculties, hospitals and other commercial buildings.
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Rival contractors may come right up to the job site to recruit, captivating workers with the promise of higher pay, he said. A concrete worker will quit working for one builder on a Monday, as an example, and then show up the following day pouring foundation for another builder 1 or 2 blocks away, he claimed.
"There's lots of worker pilferage going on," he revealed. "It got so bad at the Exxon headquarters construction site [in The Woodlands, Texas] they were forced to put in rules not to go after other construction workers."
Maly stated that he finds employees by word of mouth, often through recommendations from other staff.
"It costs so much cash to hire somebody, maybe $3,500 simply to get them on board -- without counting the cost of coaching them," he announced. "Once they are on the job site, you've got to guard them."
Builders are endeavoring to find how to fix the problem. A large amount of the talented workers, like framers, aged out of the industry during the recession. And since there was so very little work for so many years, few youngsters entered the trade to replace them, recounted Tom Woods, a custom home builder in the Kansas City area.
"We've had to share a framing crew with another contractor," claimed Woods.
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Some builders are turning to organizations like the Home Builders Institute, which is funded by the Office of Labor's Jobs Corps programme to coach dislodged employees, at-risk youth, ex-offenders and military vets in construction abilities.
HBI trains about Thirteen thousand workers a year and places 80% of them in roles, but that's still not sufficient. About 2 million employees left the industry during the past five years, according to John Courson, the organization's president.
There are virtually 6,000,000 employees in the construction trades and the Bureau of Labor Stats projects that industry job growth will be faster than average between 2010 and 2020, at about 25% or even more over the period.
After the housing bust, many workers left the building trade in droves, announced Michael Fink, CEO of Leewood Real estate Group in Trenton, N.J.
"A lot of our employees are immigrants and they went back to their home countries," he revealed. "Our contractors can't get people; they can't start on time; they can not get things done on time."
The national Association of Home Builders ( NAHB ) reported in March that 46% of its members say they have fallen behind schedule on finishing projects, 15% turned down jobs and 9% lost or canceled sales because they cannot find enough employees.
That could have some enormous implications for the broader housing market. Housing starts fell sharply in April to 853,000 and pros project residential construction will grow by approximately 25 percent annually, according to the NAHB. At that pace, it may take more than four years to get back to early 2006 building levels, when housing starts topped at 2.3 million, according to Census Bureau info.
Related: Builders hold lotteries for enthusiastic consumers
The lack of new inventory will add pressure to home prices, which have already climbed by double-digit pc.s. During quarter one, home prices rose an average 10.2% -- the biggest gain since 2006, in the opinion of the Case-Shiller national home price index.
After the housing bust, construction fell off a cliff and many workers progressed on to other jobs or they retired. With the supply of skilled employees short, sub-contractors have had to raise salary.
The competition for employees has gotten so heated that some construction companies are even poaching workers off each others ' job sites, according to Jan Maly, president of JM Maly, a construction company in the Houston area that builds tall apartments, faculties, hospitals and other commercial buildings.
Related: Best deals in real estate
Rival contractors may come right up to the job site to recruit, captivating workers with the promise of higher pay, he said. A concrete worker will quit working for one builder on a Monday, as an example, and then show up the following day pouring foundation for another builder 1 or 2 blocks away, he claimed.
"There's lots of worker pilferage going on," he revealed. "It got so bad at the Exxon headquarters construction site [in The Woodlands, Texas] they were forced to put in rules not to go after other construction workers."
Maly stated that he finds employees by word of mouth, often through recommendations from other staff.
"It costs so much cash to hire somebody, maybe $3,500 simply to get them on board -- without counting the cost of coaching them," he announced. "Once they are on the job site, you've got to guard them."
Builders are endeavoring to find how to fix the problem. A large amount of the talented workers, like framers, aged out of the industry during the recession. And since there was so very little work for so many years, few youngsters entered the trade to replace them, recounted Tom Woods, a custom home builder in the Kansas City area.
"We've had to share a framing crew with another contractor," claimed Woods.
Related: Best Jobs in america
Some builders are turning to organizations like the Home Builders Institute, which is funded by the Office of Labor's Jobs Corps programme to coach dislodged employees, at-risk youth, ex-offenders and military vets in construction abilities.
HBI trains about Thirteen thousand workers a year and places 80% of them in roles, but that's still not sufficient. About 2 million employees left the industry during the past five years, according to John Courson, the organization's president.
There are virtually 6,000,000 employees in the construction trades and the Bureau of Labor Stats projects that industry job growth will be faster than average between 2010 and 2020, at about 25% or even more over the period.
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