homesmillbrae.com » Construction Employment

More Jobs in Housing, but Workers Aren’t Returning

Sat, 09 Mar 2013 02:50:39 +0000

“One of the reasons is because they are not paying well yet,” said Lisa Marquis Jackson, an analyst with John Burns Real Estate Consulting. “The wages were cut so much in the downturn, so until those prices get back to where they are attractive, the labor is not going to be attracted back to the industry.

Housing starts are up 24 percent from a year ago, but residential construction employment is up only 3.1 percent, according to the U.S. Commerce and Labor Departments. Former construction workers headed to higher paying jobs, such as the trucking industry. Some in the Southwest headed north to the newly thriving energy sector, said Marquis Jackson. Others headed to highway construction jobs in Texas.

(Read More: Job Creation Surges as Rate Falls to 7.7%)

In Las Vegas, where Pardee Homes is building 150 percent more homes this year than they did last year, finding workers is increasingly difficult.

“We lost quite a bit of labor to the oil fields and to places like Wyoming and North Dakota, where you would not expect it to go,” noted Klif Andrews, Pardee’s Las Vegas president.

Andrews said he is paying workers five to ten percent more now, and that has pushed his home prices higher. “We’ve raised median home prices up over 15 percent, so we’ve been able to stay a little bit ahead of it, but cost increases, it’s not just labor, it’s also materials,” he added.

Nationwide, the median price for newly built homes rose 2 percent in January and new home prices now far exceed the median price for existing homes.

(Read More: Housing: Picking Up the Pieces)

Another factor is weighing on workers. Contractors, who hire the specialty workers for builders, are small businessmen themselves. In order to fund their operations, they need to hire people to have ready, and that takes capital. Unfortunately, despite the housing recovery, banks are still not lending freely to builders. Builders are trying to find ways around that, by paying subcontractors more frequently, essentially bankrolling them so they can hire more workers.

“The wheels are starting to work, but all the gears are not working in alignment,” said Marquis Jackson.

Article source: http://www.cnbc.com/id/100537494

What Today’s Jobs Report Says About the Housing Market

Sat, 03 Nov 2012 08:00:57 +0000

Any jump in jobs is good for housing, and October’s gain of 171,000 is no different.

One of the biggest barriers to entry for potential home buyers, new and move-up, has been uncertainty in employment. So this positive report can only add to rising consumer confidence and wealth.

When you dig down into the numbers, however, you can see where the numbers are not quite as rosy as some would hope for both home buyers and builders.

While overall construction added 17,000 jobs in October, residential-building construction employment fell by 2,000. Residential specialty contractor jobs increased by 6,700, which speaks to the real root of today’s housing recovery.

All-cash investors are leading the gains; they buy distressed properties and then repair and remodel them to turn them into rentals. It’s no wonder remodelers are seeing greater gains than the home builders.

An industry index of remodeling finally climbed into the positive in October, making a significant jump to its highest level since the end of 2005. Both current conditions and future expectations saw gains on the National Association of Home Builders’ remodeling index (RMI). The builders claim it is not just investors, but a result of rising home equity.

(Read More: Homeowners Hit by Sandy May Save Thousands of Dollars)

“The strength of the RMI, especially in owner-occupied properties, shows that home owners are investing in remodels as home prices stabilize,” said NAHB Remodelers Chairman George Moore Jr., a remodeler from Elm Grove, La. “As owners become more confident that investments in housing will hold their value, they are beginning to undertake projects to improve their comfort that they had been putting off.”

While any construction is better than no construction, housing analysts focus more on home building than remodeling, as the nation’s home builders contribute more to the overall economy, with more jobs and materials. Home builders have ramped up production dramatically, as they rise from the ashes of the housing bust.

Housing starts and permits are up significantly from the bottom, and the public builders are all reporting at least double-digit gains in new orders.

They still, however, need to see more demand from their historically strong cohort, the first-time home buyer. Those younger Americans are seeing employment gains, but are still proportionally harder-hit than the rest of the work force.

(Read More: Home Prices Rise, but Analysts See Pressure Ahead)

“Among 25-34 year-olds, the prime age group for housing demand, 75.1 percent were employed in October, up from 74.9 percent in September and from 73.6 percent in October 2011,”" notes Jed Kolko of Trulia.com, a real estate sales and information website. “For this age group, the unemployment rate was 8.3 percent in October, down from 9.7 percent one year ago – an even bigger drop than for the economy overall. Labor force participation increased for this key group.”

The downside in October’s jobs report, however is that job growth in what Kolko calls “clobbered metros” was just 0.5 percent (annualized rate) through September – behind the national average of 1.6 percent for the same period. (These figures are annualized 3-month growth rates to September, the latest data released for metros.) Kolko defines clobbered metros as the areas with the biggest price declines during the bust and the highest vacancy rates now: “Job growth there is especially important for housing demand,” he notes.

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Follow me on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Article source: http://www.cnbc.com/id/49659431?__source=RSS*blog*&par=RSS

Are Construction Job Losses All About Pay?

Fri, 07 Sep 2012 22:15:38 +0000

Despite rising demand for newly built homes, construction employment in August remained flat, stuck at the same paltry pace for the past four months.

The numbers don’t make a lot of sense at face value, given that housing starts are up in both single and multi-family, and builders are reporting big jumps in new orders for homes.

“Since the ‘official’ end of the recession in June 2009, construction employment has fallen 8.2 percent, even though overall employment is up 2.1 percent,” notes Trulia.com’s Jed Kolko. “The share of national jobs in construction (4.14 percent) is at the lowest level since 1946.”

Yesterday we reported on how certain builders in Dallas, TX claimed there were not enough skilled workers to fill the construction jobs they have open. The story garnered a huge response, with most claiming that was impossible, but others noting that it is all about the pay scale. (Read the story:Home Builders Don’t Have Enough Workers to Meet New Demand)

“Only about 20 million out of work construction workers in the country. I think what they really mean is they can’t find enough workers who will do hard construction work for 8 dollars an hour,” wrote one respondent on the blog.

I’m a sub-contractor in South Florida,” wrote another. “The problem here is, the big builders are paying sub-contractors less than what they paid in 1998. On top of that there are more city and OSHA rules to abide by. There is no way for me to employ a crew and pay them what they need to support their families. The only crews that are working are illegals, and the only reason they can survive on these wages is because there living with 2 families in 1 bedroom apartments. That’s not my idea of job creation.”

Builders will argue that the rising cost of construction materials is making it harder for them to raise wages, not to mention that they are still competing with large supplies of cheaper, distressed properties, many of which are relatively new construction.

“Here locally, we’ve measured that the average price of a house has gone up 1.7 percent from last year, which is not nearly enough to cover the 9 percent increase in costs that has occurred since 1st of the year, so it’s coming right out of the margin,” says Stephen Brooks, CEO of Dallas-based Grand Homes.

The argument quickly turns to immigration policies, given that so many construction workers are not U.S. citizens, but it is also a matter of investment in the work force, which we see in so many sectors, like the auto industry, as reported by CNBC’s Phil LeBeau today. Apparently their aren’t enough skilled engineers to do the necessary work on cars. (Help Wanted: Engineers)

Says another blogger: “I’m thinking these folks need to rescrew on their heads on what it will take to grow their businesses, like maybe invest some resources to bring new folks on board and work with them to make sure they have those skills they want long term.”

Questions? Comments? And follow me on Twitter @Diana_Olick

Article source: http://www.cnbc.com/id/48940258?__source=RSS*blog*&par=RSS