MANY U.S. COMMUNITIES SEEING REAL ESTATE INVENTORY AND LEAD SHORTAGE LEON MCKENZIE
Issues with construction in population booming areas
may end up staying in their current home to avoid the
face a twopronged challenge – not enough qualified
problem.
workers for residential projects and not enough
funding. Hyde writes, “Home developers and cities
Changes in Season Effect Inventory
are competing with projects in the Greater Houston
area, such as the construction of the new Exxon
Another contributing factor to the shortage in real estate
Mobil campus in Spring and the continued
inventory is the upcoming change in season. While spring
construction of the Grand Parkway. These major
markets generally show expansion as more and more
projects have contributed to the lag in home
property owners put their homes on the market, the
construction as there are fewer skilled laborers
opposite it true during the fall and winter months,
available. ‘That is exactly why we cannot keep up
especially in the cold weather climates. Said Lawrence
with building homes fast enough,’ Reichert said.
Yun, “As winter approaches, inventory will slide further.
‘There are just not enough workers out there to build
Few homes are newly listed after Thanksgiving.
homes [and] builders struggle on a daily basis to find
Historically, inventory tends to be 15 percent lower in
workers.’” 6
winter than summer. Last year’s seasonal decline was
even more dramatic, at 25 percent. We hope we won’t see
While all of the construction that is being completed
an inventory decline of that magnitude this winter. Home
in booming areas may seem like a good thing, there
values rising much faster than income growth will markedly
are also ancillary issues. Hyde writes, “The shortage
cut into housing affordability.”8
in laborers and influx of construction projects has
also led to an increase in the price of construction
The contraction in the market will pull many properties off
materials, which has directly caused housing prices
of the market with buyers still looking to purchase homes.
to increase, Reichert said. Since 2011 material costs
Being able to find a property during any time of the year is
have increased by 11.7 percent and are expected to
becoming a significant challenge for buyers who want to
climb through June 2016, according to the national
have several homes they can investigate.
construction
management
company
Construction Company’s price index.”7
Not only are homeowners faced with fewer
properties to choose from and fewer new
construction
projects,
but
the
new
construction they do find may cost the
average homeowner more money than they
can afford to spend. With rising construction
material costs, the associated increase in
new construction prices may prove to be too
much for homeowners. These homeowners
Turner