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Real Estate - Residential

Tackling A Lag In Housing Starts

By Cece Nunn, posted Apr 19, 2019
Leading up to one of the Wilmington area’s annual showcases of dwellings, local homebuilders had a potential problem to consider.
 
With construction of single-family homes taking longer than in the past, and Hurricane Florence halting business in September, the possibility existed that the Wilmington-Cape Fear Home Builders Association’s annual Parade of Homes the last weekend in April and first weekend in May would be smaller, rather than increasing in size as usual.
 
“We were foreseeing that we would have some challenges so we budgeted for a smaller number of houses for entries,” said Cameron Moore, WCFHBA’s executive officer. “Luckily, we’re over that mark. We were pleasantly surprised that we did see more than we thought we were going to see.”
 
Nationally, housing starts dropped 9 percent in February, according to statistics reported by the Commerce Department in late March.
 
Last year’s local numbers saw a drop, due in part to the hurricane. In New Hanover County, the number of permits issued for single-family construction fell by more than 300 permits, from around 1,700 to 1,350.
 
But Moore said he had been encouraged by more recent numbers that show Wilmington and New Hanover rebounding and actually up a few starts coming out of the first quarter, with 336 permits for January through March of this year compared to 302 during the same period last year.
 
Still, challenges remain, including what homebuilders call the three Ls: lots, land and labor.
 

Recruiting Workers

 
A labor shortage that communities across the U.S. are facing has also been affecting the Wilmington area, including in the area of construction timelines for homes.
 
Moore said houses used to take about four to six months to build in the Cape Fear region.
 
“Now we’re looking at almost anywhere from six to eight months or longer,” he said.
 
He said one of the reasons for that is a lack of skilled workers, from carpenters to plumbers.
 
“There are 26 [construction] trades that have to touch a job site, new construction, to get it to a finished product,” Moore said. “Without a skilled workforce, it is starting to put delays in on getting that finished product on the ground.”
 
As a result, Moore said, the local HBA has made it a top priority to tackle a labor shortage that continues to build. The association and Cape Fear Community College are teaming up this year for the second year in a row to offer a Construction Institute with training programs aimed at satisfying local construction workforce needs, Moore said. To further boost prospects, the association is offering numerous scholarships to the institute.
 
“Last year, with input from the construction community, builders and subcontractors, CFCC collaborated with WCFHBA to develop four courses designed to teach basic skills in the fields of masonry; plumbing; carpentry and heating; ventilation and air conditioning (HVAC),” Moore said. “Following the success of the Construction Institute’s first year, CFCC has expanded its course offerings from four programs to over 30.”
 
Locally, workers left their professions or the area during the Great Recession’s slowdown in housing starts about a decade ago. And these days, baby boomer construction workers are aging out of their businesses.
 
“There’s some data that starts to show how our workforce shrunk after the recession and then is shrinking even more because of the fact that the younger generation is not entering the trades,” Moore said.
 
The local association wants to restore a connection with not only the age groups that might want to attend CFCC’s institute, but also in high school and middle school. The association and CFCC recently attended the Middle Schools Career Pathways Fair, hosted earlier this month by the New Hanover County Schools Career and Technical Education.
 
WCFHBA officials also plan to be part of CFCC Career Awareness Day.
 
Veterans are another potential group to tap for construction trade workers. Moore said that Whole Vet, a regional nonprofit group dedicated strictly to veteran services, will be holding a Career Transition Day on April 30 at CFCC.
 
“This event is designed for service members that are in the process of transitioning back to a civilian life and looking to reestablish themselves in the area’s workforce,” Moore recently told HBA members in an email. “The HBA as well as CFCC will be partnering together at this event with a coordinated booth to showcase the construction related education/training opportunities that exist.”
 

Sales Versus Building

 
At Wilmington-based residential real estate firm Coldwell Banker Sea Coast Advantage, new home sales were up 16 percent as of April, said Brad Hunter, vice president and director of new home sales.
 
“Sales are certainly very strong,” Hunter said, but the local inventory level is down to about three months, a measure of the amount of time it would take to sell out of the homes currently listed.
 
The affordability of homes, along with the labor issue, are two more challenges, he said.
 
New homes that cost $200,000 or less are basically nonexistent in the market, Hunter said, adding that entry- level home prices in Wilmington and Hampstead are in the $250,000 to $275,000 range.
 
It’s difficult to find a lot, particularly in New Hanover County, that costs less than about $60,000, and the formula for figuring out how much a home would cost based on lot price is to multiply it by four, officials say.
 
If you do find a lot for less than that, “it’s going to be pretty far outside the urban areas, so that’s providing a challenge as well,” Moore said. “It’s gotten more expensive to build, and on top of that, materials and everything else has gone up [in price.]”
 
But a bright spot, in addition to ramping up of recruitment efforts for skilled workers, are the recently improved permit numbers.
 
“This is a positive sign,” Moore said, “that new residential construction seems to be back on track.”
 

33rd Annual Wilmington Parade of Homes

presented by the Wilmington-Cape Fear Home Builders Association

April 27-28
& May 4-5

The self-guided tour is free to the public, and homes will be open from noon to 5 p.m. each day.

INFO: wilmingtonparadeofhomes.com

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