Wednesday, March 20, 2013

NY Times: "Surprise Demand for Housing Catches Industry Off-Guard"

by Bill McBride on 3/20/2013 04:44:00 PM

From Catherine Rampell at the NY Times: Surprise Demand for Housing Catches Industry Off-Guard. A few excerpts:

In 2005 [Beutler Corporation, an air-conditioning and plumbing company] employed 2,100 workers, but by 2009 Beutler had only 270 employees. [Rick Wylie, president of the Beutler Corporation], who currently employs about 550, is now having trouble luring back many workers he let go.

“I don’t mean to complain,” he said. “This is a good problem to have, a world-class problem, to not be able to find workers to do all the work you’re getting.”

The shortages aren’t limited to the workers toiling in the hot sun, either.

“You walk into the permit office, and it’s like a ghost town in there,” said Michael Haemmig, president of Haemmig Construction in Nevada City, Calif., about an hour north of Sacramento. He says local governments were caught off-guard by the suddenly renewed interest in building and do not have enough people in place to handle all the paperwork. ...

For builders still hesitant to dive into the market too deeply, such delays may actually be welcome, since they help buy more time for prices to rise further.

“If we could build 500 houses right now, could we sell them?” asked Harry Elliott III, president of Elliott Homes, a century-old company that built 250 homes last year and plans 350 this year, compared to a high of 1,400 in 2006. “Possibly, but I don’t want to sell all my lots that I’ve held onto forever and have to give them away at these prices.”
It is likely that homebuilding growth this year will be limited more by supply constraints than demand. Quite a change ...

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