Labor Shortages are Raising Home Prices

Posted on October 22, 2018 by Jorie Helms

Last month, NAHBNow recounted the record share of single-family builders reporting shortages of labor and subcontractors based on a recent survey conducted by the association.

According to the survey respondents, the most widespread effects of the labor shortages were:

  1. Causing builders to pay higher wages and/or subcontractor bids (reported by 84% of builders);
  2. Forcing them to raise home prices (83%); and
  3. Making it difficult to complete projects on time (73%).

As NAHB Senior Economist Paul Emrath reported in this Eye on Housing blog post, these have consistently ranked as the most commonly reported effects of the labor and subcontractor shortages since NAHB began asking builders about them in 2015.

However, all three concerns have become even more acute recently.

The steepest upward trend has been in the share of builders saying the labor/subcontractor shortages are causing higher home prices. This figure jumped by 22% between 2015 and 2018, and is nearly tied with higher wages/subcontractor bids as the most widespread effect of the labor shortages.

labor shortage graph

The survey also revealed that labor and subcontractor costs have risen much higher than the rate of inflation over the past year. From July 2017 to July 2018, for example, overall inflation was up 2.9%, but labor costs increased by 5.2% and subcontractor costs jumped by 7.2% over the same period.

This is particularly significant, given that three-fourths of construction costs typically represent the work performed by subcontractors. It is also consistent with the NAHB survey results showing that the incidence of shortages was higher for subcontractors than for labor directly employed builders in 14 of 15 occupations.

View the complete survey on labor availability.

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President Blackburn talks with SWOKHBA members after General Meeting

Posted on October 22, 2018 by Jorie Helms

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New Trade Deal Could Open Door for Future Lumber Talks

Posted on October 4, 2018 by Jorie Helms

The new trade deal between the U.S., Canada and Mexico that will replace the North American Free Trade Agreement (NAFTA) with the United States-Mexico-Canada Agreement, or USMCA, has the potential to yield positive developments regarding the ongoing U.S.-Canada lumber trade dispute.

All three nations must still ratify the new agreement.

While the accord does not specifically address the lumber trade conflict, it does leave in place the dispute resolution mechanism from NAFTA’s Chapter 19. Now moved to Chapter 31, it allows a panel with representatives from each country that is party to a dispute to challenge tariffs that may be imposed.

Under NAFTA, the Chapter 19 mechanism has been successfully used by Canada in the past to challenge the U.S. on its softwood lumber trade restrictions.

With the negotiations on the USMCA accord now completed by the three nations, this leaves open the possibility that the U.S. and Canada can now focus on resolving bilateral trade issues regarding softwood lumber.

NAHB Chairman Randy Noel has sent a letter to President Trump urging him to negotiate now.

For more information, contact David Logan at 800-368-5242 x8448 or Alex Strong at x8279.

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Oklahoma State Home Builders Association lauded for voluntary builder upgrades

Posted on October 1, 2018 by Jorie Helms

Jim Campbell, of Jim Campbell Homes, left, and Mike Means, executive vice president of the Oklahoma State Home Builders Association, stand outside a Campbell home at 6501 NW 113 and talk about the association's Certified Professional Builder program, which recently received national industry attention. [PHOTO BY DOUG HOKE, THE OKLAHOMAN]

-The new house still had a way to go: Opening the front door released roiling clouds of wood stain fumes that spilled out to a lawn mired in a mix of mud and mayhem — weeds everywhere.

But a sign staked in front offered assurance to neighbors and passers-by: "Certified Professional Builder-OSHBA," a seal of the Oklahoma State Home Builders Association.

“This house burned down right after Christmas last year, and this guy had to find a builder,” builder Jim Campbell said. "The first thing he started looking for is, ‘How do I know this is someone I can trust?' ”

The seal certifies that Jim Campbell Homes participates in the state builders group's Certified Professional Builder program, which recently attracted national industry attention.

In place since 2003, the voluntary program requires participating builders to go through continuing education, build to code at minimum, work with written contracts, offer a one-year warranty on their work, meet credit standards as set by their local associations, and carry a minimum premium insurance policy of workers' compensation and a minimum $1 million in general liability coverage.

“This is something they (consumers) can go back to, if they have a problem," Campbell said. "What I point out is we don't license (builders) in Oklahoma, so this is as close as you're going to get.”

The Executive Officers Council of the National Association of Home Builders recently recognized the Certified Builder program with an Award of Excellence in Service. The council consists of the staff executives of 700-plus state and local builders groups making up the national association.

“Winning an Association Excellence Award is a great honor," said Eric Person, president of the Executive Officers Council and CEO of the Home Builders and Remodelers Association of Central Connecticut. "Each award recognizes the outstanding effort, commitment and achievement our homebuilding associations and their membership make to further the value and importance of their organization.”

The Certified Professional Builder program does that by highlighting what the state group already offers, said Mike Means, executive vice president of the Oklahoma State Home Builders Association.

"It's a program that recognizes our best of the best builders,” Means said. “What we do, by promoting the Certified Professional Builder program, is helping the builders.”

Campbell said the designation sends a clear message to the market.

“I think with this program, it brings builders out who are already doing the quality work,” he said. “So a lot of it's more about how I'm working with the public.

"What can I offer you to get the quality house built? One that has a warranty that comes with it? A builder that's going to be around in the long run? So if you need to you can call me and I'll take care of it. “

The state association also has an obligation to the builders who pursue certified designation, since it's voluntary, Campbell said.

“Our responsibility is to help promote the certified builders,” he said. “So if you go to the (OSHBA) website, the only builders you're going to see listed there are our Certified Professional Builders."

The association also arranges opportunities for builders to get the required annual continuing education.

One way is by staging events such as the annual Oklahoma Building Summit & Expo held earlier this month at Cox Convention Center, where expects expounded on topics such as cloud technology and advances in home automation.

Thanks to the exposure the Certified Builder program got with the national recognition, Means said Washington state builders are considering a similar program.

"That's what you do. When you put in for a program, you're putting yourself out there, and you know somebody's going to pick up on it.”

For Campbell, the motivation for seeking the certified designation stretches back to May 3, 1999, when a massive, slow-moving tornado churned its way through central Oklahoma, leaving death and destruction in Bridge Creek, Del City, Midwest City, Moore and parts of Oklahoma City.

“What struck me — that was the first time I was involved in a disaster — was the people who came out of the woodwork who were promoting themselves as builders,” Campbell said. “And, especially over in Del City where I was building, there were a lot of people who got halfway through builds, and then those guys would disappear."

Being a Certified Builder, he said, "gives us the background to say 'Hey, I'll be here.' I've been building since 1989. So I kind of push that fact.”

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OSHBA awarded Association Excellence Award

Posted on September 25, 2018 by Jorie Helms

The Oklahoma State Home Builders Association (OSHBA) recently received an Award of Excellence in the following category from the Executive Officers Council (EOC) of the National Association of Home Builders: Best Service Provided by State Association or Local Association. Awards were presented during the annual National Association of Home Builders’ 2018 Association Management Conference held in Long Beach, Calif.

The council's membership consists of the staff executives who manage the more than 700 state and local home builders associations that comprise the National Association of Home Builders.

"Winning an Association Excellence Award is a great honor," said Eric Person, president of the Executive Officers Council and CEO of the Home Builders & Remodelers Association of Central Connecticut. "Each award recognizes the outstanding effort, commitment, and achievement our home building associations and their membership make to further the value and importance of their organization.”

The winning entries will be available in the AEA Awards Directory to help other executives and associations across the country provide better service to members and their community.

The Oklahoma State Home Builders Association represents home builders and associates in the housing industry throughout the state area.

“I am proud to be recognized by the NAHB Executive Officers Council with the Association Excellence Award for Best Service Provided by a State or Local Association.” Said Mike Means, Executive Officer of OSHBA. “They recognized our efforts on behalf of our locals and to be recognized by our peers is an honor.”

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OSHBA leaders meet with Governor Mary Fallin

Posted on August 29, 2018 by Jorie Helms

                               left to right - Dan Reeves, Governor Mary Fallin, David Blackburn (President of OSHBA) and Mike Means, EVP.

Members of the OSHBA joined other industry members of the Western Governors Association to have lunch with Mary Fallin, Governor of Oklahoma.  Members of OSHBA shared with Governor Fallin the effects of the lumber tariff and urged her to communicate to her colleagues and President Trump to work to resolve the issue.

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