Labor Shortage is the Top Concern for Home Builders
The shortage of labor seems to be one of the top concerns in new construction markets all over the country and specifically in Miami and Miami Beach. According to a recent survey from the National Association of Home Builders, four out of five builders or about 85% expect to face serious challenges regarding the cost and availability of labor throughout 2020. While this isn't new, it is slightly down from 2019 where the availability was that 87%.
Building material prices and the cost and availability of lots and parcels were the second problems that many homebuilders expect to face in 2020. But this is new either. This is been a growing concern becoming more and more worrisome over the last 3 to 4 years. In 2011 just 13% of builders complained about labor shortage whereas a few years prior it was up in the 80s as well. Of course, with the housing recession in 2007 and 2008, many contractors went out of business and buildings just stopped construction altogether, not necessarily due to shortage but due to buyers.
Today, we are scrambling to keep up with the demand. Building material prices was not as important as it was in 2015 to 2018. Just 33% of builders cited building material prices of an issue but that jumped to 42% in 2015 and 87% in 2018. Additional fees, inspection costs, and the impact on the housing came in at the bottom of the top five lists. It really is the cost and availability of labor that's causing the most concern. Other concerns that are higher in 2020 than they were in 2019 include gridlock or uncertainty in the legislative departments, difficulty obtaining zoning permits, state and local regulations, negative media reports making buyers cautious, and the development or availability of lots. The only thing that is down in 2020 is inaccurate appraisals. This concern is just 40% in 2020 and it was 41% in 2019.
However, there are still buildings being constructed, new properties going up, and custom homes being developed and because of this housing shortage, home values have continued to rise and because interest rates remain low it's still a good time for buyers to jump on the real estate bandwagon.
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