New home buyers will pay for Arizona’s construction worker shortage
Cash offers for skilled workers
Valley home builders have been talking about the shortage of skilled labor needed to keep up with the rising demand from buyers for a couple of years.
Contractors will often offer painters, framers and drywallers working in new Mesa, Gilbert, San Tan Valley, Surprise and Buckeye subdivisions cash bonuses to leave their competition and come work for them the next day.
About 50 percent of Valley contractors reported in the survey that they are losing workers to other builders.
And about 68 percent of Arizona builders think the shortage of construction workers will get worse this year.
Metro Phoenix’s apartment building boom is drawing more of the construction industry’s skilled workers. And that new development spree isn’t expected to slow during the next year.
About 23,500 new Valley houses are expected to go up this year, according to Belfiore Real Estate Consulting. That’s the most since 2008.
In 2019, Jim Belfiore is forecasting 25,400 new metro Phoenix houses will be built, and then 26,000 in both 2020 and 2021.
That’s still half the pace of metro Phoenix home building during 2005 and 2006. But many of the 250,000-plus construction workers who lost their jobs during the crash have left Arizona or the industry.
Higher wages, prices
With the Valley’s low unemployment rate of 4.1 percent, it’s not hard to see why a former or potentially new construction worker might opt for an inside job instead of spending the day outside in the summer heat.
Arizona housing analyst RL Brown said labor costs are up and will continue to rise because of the shortage of workers.
Higher labor costs mean higher new home prices.
Belfiore is forecasting new home prices in the Phoenix area will climb five to seven percent this year and four to six percent next year.
Catherine Reagor, Arizona Republic