After being decimated by the housing crash, Arizona’s builders are now scrounging for workers as demand for new homes climbs. Building permits are at an almost three-year high, creating a scarcity of framers, roofers and masons, many of whom moved elsewhere when work dried up. Laws aimed at curbing illegal immigration only added to the shortage by pushing experienced laborers out of the state.
Construction jobs, which also include commercial and government projects, increased 9.3 percent in May from a year earlier to 120,300, the biggest gain of any industry in the state, according to Arizona’s Office of Employment and Population Statistics. Nationally, industry employment rose 0.4 percent.
The average hourly wage for construction workers in Arizona increased to $20.72 from $19.53 a year earlier, according to the state agency.
Arizona was among the areas hit hardest by the U.S. housing crash. Home prices in April were down about 47 percent from the peak in 2006, more than the 31 percent decline nationally, data from CoreLogic Inc. (CLGX) show. The state ranked second in the rate of foreclosure filings last month, according to RealtyTrac Inc. Building jobs have declined by more than half since 2006.
“The industry is so wound down that it’s hard to flip the switch on and build as many homes as there is demand right now,” said Ben Sage, director of the Arizona region for Metrostudy, a Houston-based firm that tracks new construction. “The subcontractors are scrambling for workers.”
New-home demand in Phoenix is climbing as cash-wielding investors elbow out traditional buyers for a dwindling supply of existing properties. The inventory of previously owned houses for sale in Phoenix dropped 54 percent in April from a year earlier, according to a report by Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business. That helped push the median price for single-family homes up 25 percent to $140,000.
Purchases of new houses surged 43 percent in April from a year earlier, according to the report. The median price for new homes rose 4.6 percent to $207,000.
Reed Porter, chief executive officer of Trend Homes in Gilbert, Arizona, said he expects his company to build 200 houses this year, twice as many as in 2011.
“So far, we’re keeping up with demand,” he said. “If demand continues to increase, clearly we’d need more skilled workers.”
While widespread worker shortages are unlikely as the U.S. unemployment rate sits above 8 percent, some local markets may find themselves in situations similar to Arizona’s biggest city, according to David Crowe, chief economist for the National Association of Home Builders. Building permits nationally climbed to the highest level since September 2008 in May, the Commerce Department said yesterday.
Wednesday, June 20, 2012
Arizona Getting a Boost From Housing