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/ Shortage of tradesmen in 2013 creating backlog for Houston Homebuilders

Shortage of tradesmen in 2013 creating backlog for Houston Homebuilders

November 30, 2013 billedge

Foundation being poured Houston builders have increased their production by 13% this year.  While this may seem like a substantial increase it is actually less than the demand for new homes.  David Jarvis, regional director of Metro study said “Everybody is quoting six months (of waiting) for a production home.

In 2006, the peak year for housing in the Greater Houston area, builders such as Lennar could build a home in 3 to 3 ½ months.  Today builders are taking up to 6 months to build a home.  The reason according to innerloop realtor Bill Edge is that housing starts in Houston  dropped over 50% after 2006.  Electricians, roofers, plumbers, and other tradesmen were forced to look elsewhere for jobs.

The loss of jobs for tradesmen was further hurt by the fact there were no natural disasters in Houston.  The city known for flooding had no tropical storms or hurricanes until Ike hit.  When Ike hit the insurance companies had absorbed significant losses in New Orleans, and the East coast.  Adjusters were unfriendly to homeowners and the flood of roofers who moved back to Houston left after six months of finding no jobs.

Houston with its significant population increase was ripe for a housing shortage.  Today with the increase in housing starts we are still building less than 60% of the 2006 total for new homes.  The traffic increase has caused Houstonians who work in downtown Houston or nearby to forgo the big house in the suburbs.  Builders have been racing to buy up lots and teardowns inside the loop to take advantage of this housing shortage.

Banks, private lenders, and mortgage companies have made capital available to builders once again.  Home builders who two years ago could not start construction without a buyer can now build at will.   Houston Homebuilders are now having bidding wars on homes to be built.  The builders know the market is increasing and today’s price may be low 4 months from now.  Incentives, contributions to closing costs, and free upgrades are a thing of the past.

Factors driving the market today:

  • According to the Houston Association of Realtors we are at the lowest level of homes are on the market since the MLS was formed.
  • There will be a slowdown of buyers during the months of November and December because of the holidays.
  • Houston has also had quite a few rain storms lately which will further slow housing starts.
  • The work force is becoming old as young people no longer follow their fathers into the trades.
  • Builders have increased production by 35% over the year 2012.
  • Cost of materials, labor, and land are rising.

What all this means is that the housing market is going to continue to be a seller’s market through 2014.  Builders have upped production and this has helped to ease the market some.  Buyers no longer  have to beg and put in offers the minute a home comes on the market.  The old saying “the early bird gets the worm” continues to be the norm in real estate.  Those buyers who continue to think they can drive a hard bargain are left with virtually no chance of success.

Have a question about a property? Want to learn more about the Houston Real Estate  Market? Ready to tour your favorite homes today? Contact Inner Loop Realtor Bill Edge now.

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