What’s Holding Back New Home Construction? There’s No One to Build Them

 | Realtor.com

In this blazing-hot housing market of severe home shortages and rapidly rising prices, many buyers around the country have found themselves left shivering in the cold. But while builders would love to swoop in, construct a bunch of homes, and save the day (while making bucketloads of cash), they can’t. They simply don’t have the manpower.

Construction workers have become an increasingly rare and precious commodity in today’s housing market. The national labor shortage is dramatically slowing down builders—many of whom already have their hands full with remodeling homes for baby boomers planning to age in place, and rebuilding thousands of homes ravaged by last year’s hurricanes and wildfires. Combined with overall rising construction costs, it means an influx of new homes to ease the housing shortage and tame runaway prices isn’t coming anytime soon.

Skilled workers such as home framers, electricians, plumbers, masons, carpenters, and HVAC installers are especially in demand, builders say.

But builders are partly to blame for the crisis, which is helping to drive up home prices across the nation. They were some of the first to lay off workers during the financial crisis as development stalled, and many of those workers have since moved on. The crackdown on immigration and the opioid epidemic have siphoned off laborers. Meanwhile, many potential workers simply don’t want to toil outside in the heat and the cold when they could work in a climate-controlled office.

In other words, it’s a perfect storm for both builders and aspiring home buyers.

“We’ve got rising housing demand at the same time that the residential construction industry lacks workers,” says Robert Dietz, chief economist of the National Association of Home Builders. He predicts about 900,000 single-family houses will be built this year—whereas 1.2 million are needed to keep up with demand from those hoping to purchase a home of their own.

How bad is the labor shortage?

An increasingly common site
An increasingly common site 

To put the problem into perspective, there were 250,000 unfilled construction jobs at the beginning of the year, according to an NAHB analysis. The unemployment rate for the industry, reflecting unfilled positions, was 7.4% in March, according to a government data analysis by the Associated General Contractors of America, a trade group for commercial builders. That’s significantly higher than the national unemployment rate of just 4.1%.

The dearth of construction workers is slowing down all stages of the business, says Jason Scott, owner of North Star Premier Custom Homes in Westlake, OH, and president of the local Home Builders Association.

“It takes me twice as long now to do an estimate as it used to,” he says.

Instead of being able to find workers that day, he now waits eight to 10 weeks. Delays due to overbooked contractors slow the pace of homebuilding, amplifying existing shortages.

The shortage is also inflating costs for buyers and homeowners. Scott has had several subcontractors (siding, roofing, concrete) raise their prices by at least 10% since the new year. He’s paying double what he was 10 years ago for framing.

“I know builders who haven’t factored these [worker pay] increases in, and they’re watching $10,000 to $15,000 come off their bottom line,” Scott says.

With no relief in sight, builders may just have to rely on ingenuity, perhaps by using more prefabricated components.

“We’re going to have to build more with less with the current workforce,” NAHB’s Dietz says. “Builders have to find a way to be more efficient.”

The hangover some never recovered from

The burst of the housing bubble a decade ago was an A-bomb, flattening just about all of the construction work in sight. Residential home construction employment peaked at more than 5 million in 2006, but in postrecovery 2016 it was just 3.8 million, based on the NAHB’s data.

That’s because many workers didn’t have the luxury of waiting out the bad times. With bills still coming in, they were forced to move on to other gigs.

“The recession 10 years ago took a lot of people out of the construction industry,” says Brian Turmail, vice president of public affairs and strategic initiatives for AGCA. “We were the first to lay off and the last to start adding [back].”

The opioid epidemic and immigration policy take a toll on labor force

Some issues that have been in the national spotlight have also had major repercussions for housing business. This includes the opioid crisis.

Construction work is physically tough, and the rate of injury leaves some open to developing an addiction to prescription opioids, an epidemic sweeping the nation. The crisis has also likely kept many potential workers out of the labor pool.

Protestors at a Home Depot store in Cicero, IL, demonstrate against laborers living in the U.S. illegally.
Protestors at a Home Depot store in Cicero, IL, demonstrate against laborers living in the U.S. illegally.

The White House’s harsh stance on illegal immigration is also likely impacting the construction labor supply, housing experts say. About a fourth (24%) of all construction workers are immigrants—and 13% of those are living in the U.S. illegally, according to a Pew Research Center analysis of 2014 U.S. Census Bureau data.

As construction economist Ed Zarenski points out, immigrant laborers not only add to the workforce, but also help increase productivity because they are typically paid less. This may help to keep prices for the final homes down.

Immigration from Mexico, the largest source of U.S. immigrants, has been declining steadily since 2004, according to Pew, thanks to improving conditions south of the border and, more recently, anti-immigrant rhetoric in the U.S. that has made many feel unsafe or unwelcome.

“Some of the slowdown in immigration has affected the labor pool,” NAHB’s Dietz says.

The need to develop the next generation of laborers

So where is the next generation of potential laborers? The short answer: doing other stuff.

“A lot of people who would have gone into construction years ago are now going into computers or the IT field,” says Corey Dean, general manager of Bel Arbor Builders, which puts up about 18 to 20 custom homes annually in the Richmond, VA, area. “[They’re] not outside sweating or freezing.”

Plus, the decline of vocational educations has led to fewer young people today prepared for those skilled trades—and fewer that would be inclined to take the years needed to learn them. Those with bachelor’s degrees typically earn about $17,500 more annually than those who lack them, according to a 2014 report from the Pew Research Center.

So blue-collar workers are retiring, and fewer people are waiting in line to take their place.

“We made these cultural changes the last 30 years for all the right reasons: We wanted kids to go to college, we appreciated the economy was transitioning,” says AGCA’s Turmail. “But like [with] so many things in this country, we over-corrected for one problem and created another problem in its wake.”

Builders step up their outreach

Soldiers leaving the Army are trained to be construction workers through a program at Fort Stewart, GA, funded by the Home Depot Foundation.
Soldiers leaving the Army are trained to be construction workers through a program at Fort Stewart, GA, funded by the Home Depot Foundation.

The construction industry has begun to take action to feed its need for workers. That should give the home buyers of tomorrow a sliver of hope.

For example, the Home Builders Association in Colorado Springs, CO, recently partnered with the local school district to start a vocational program in six schools. Called Careers in Construction, it instructs over 350 kids in carpentry, plumbing, HVAC, and electrical trades.

“We’re giving them a choice because not all of us are meant for college,” says George C. Hess III, CEO of Vantage Homes Corp., a Colorado Springs–based builder, and chairman of the Home Builders Institute, an educational trade group.

On a grander scale, Home Depot recently pledged $50 million for HBI to support a Pre-Apprenticeship Certificate Training program. It provides vocational education not just in schools but also on military bases.

“We know the younger generation is where we start to overcome perception and make the trades cool again, if you will, so we can have that pipeline continue over the next several decades,” says Shannon Gerber, executive director of the Home Depot Foundation.

Women, who make up about 9% of the field, are another potential source of untapped workers. Compared with other fields, there’s relatively less inequality in construction (women make 95% what male construction workers make), but the industry is still 200,000 female workers short of the precrisis peak of 1.13 million, according to U.S. Bureau of Labor Statistics and National Association of Women in Construction data.

“The worker shortage is severe,” says NAHB’s Dietz. “The industry is going to have to recruit the next generation of construction workers—or we’ll continue to underbuild houses, there won’t be enough houses, and home prices will continue to rise faster than incomes.”

Chris Parker is a Cleveland-based writer whose work has appeared in Billboard, The Guardian, and the Hollywood Reporter.
Posted on April 23, 2018 at 8:57 pm
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Love that Home’s View? See How Much You’ll Pay

April 4, 2018
 Love that home’s view? See how much more you’ll payA house with a fabulous view can be hard for a home buyer to resist. But seeing the mountains, water or city lights from the comfort of home comes at a price. The hazy part is figuring out what that added cost is — and whether it’s worth it.

That’s where real estate appraisers and analysts who study home values can help, even though they recognize there’s no simple answer.

“Views are actually really difficult to quantify,” says Andy Krause, principal data scientist at Greenfield Advisors, a real estate research company. “It’s somewhat subjective. What makes a better water view? Do you want it to be wider? Do you want more of the water from a taller angle? You know, some of that is in the eye of the beholder.”

Assigning a dollar value can also be difficult because not all views are equal or valuable, and a view that’s sought-after in one location may not be in another.

In Manhattan, a place that overlooks a green space or woods will cost you a lot extra. In the countryside? Not as much, says Mauricio Rodriguez, a real estate expert who chairs the finance department at Texas Christian University’s Neeley School of Business.

Putting a price on it

So how do you put a price on a variety of views? Krause, who builds automated valuation models that analyze home data, produced these estimates for what five different types of views might add to a home’s price in Seattle:

  • 5 to 10%: For a home on flat ground with an unobstructed view of an open space or a park, a seller could add 5 to 10%. In other words, if an identical home without a view is worth $500,000 elsewhere in Seattle, this view could boost the price to $525,000 to $550,000.
  • 10 to 30%: A home partway up a hill with a partially obstructed water view over neighbors’ rooftops could increase the overall price by 10 to 30%. It depends on how much of your field of vision the view fills, both vertically and horizontally, Krause says. In this example, a home otherwise worth $500,000 might fetch $550,000 to $650,000.
  • 30 to 50%: This time Krause considered the same home as above, in the same location, but with an unobstructed view. “You still have the neighbors above looking down into your house, but you have a nice water view,” he says. With this clearer view, the $500,000 home could sell for $650,000 to $750,000.
  • 50 to 75%: Next, envision a home atop a hill with an unobstructed cityscape or open-space vista. To buy the $500,000 home in this location, a buyer might have to pay $725,000 to $875,000.
  • 75-100% or more: Finally, imagine a house with a stunning, unobstructed view of a big lake or the ocean. This type of prized view can boost the value of a home worth $500,000 in an ordinary location to $1 million or more, Krause says.\

How to shop for a home with a view

If having a view is a must on your homebuying list, here are a couple of tips from the experts:

1. FIND OUT IF THE VIEW IS PROTECTED

Frank Lucco, a residential real estate appraiser and consultant in Houston, once had clients with an expensive home who sued after a high-rise office tower went up across the street. The building disrupted their view and gave office workers a view of their formerly private backyard and their teenage daughters using the pool. The lawsuit was dismissed, Lucco says, and a bit of detective work could have told them that commercial development was allowed.

To avoid a similar outcome, Lucco says before you place a bid on a home, ask planning authorities what the zoning allows and if high-impact developments are planned nearby.

2. LOOK FOR DIAMONDS IN THE ROUGH

Bargain-hunters can occasionally find views for cheap because poor design — walls where a big window or a deck might go, for instance — blocks what should be a nice view.

“It may cost you $15,000 to $30,000 to do a very limited remodel that gives you a better angle, or higher vantage point, or a rooftop deck,” Krause says. But that could be a deal compared with buying a home that already takes full advantage of its view. Lucco suggests inspecting the home’s deed for any restrictions limiting additions to the height. Pay careful attention to homeowner association rules, too.

A view can be one of the most attractive aspects of a home. Knowing that you paid the right price for it can make the scenery that much more enjoyable.

This article was written by NerdWallet and was originally published by The Associated Press. 

Posted on April 11, 2018 at 9:49 pm
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4047 SW 58th

Posted on April 9, 2018 at 10:18 pm
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720 NW Warrenton

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2929 NW Cumberland Road | Spectacular Views

Posted on March 30, 2018 at 8:19 am
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Best Spots for Spring Flowers

Admire beautiful blooms at these Portland parks and gardens.

K. Kendall cherries crop
Spring brings beautiful cherry blossoms to downtown Waterfront Park.

One of the region’s earliest blooming native flowers, trilliums are a common sight in Pacific Northwest forests. These small, white flowers are abundant in Portland’s only state park, Tryon Creek — so abundant, in fact, that the park hosts an annual Trillium Festival each April. If you miss the festivities, you can still find the flowers yourself and enjoy Tryon’s hiking, biking and horse trails all season long.

Trilliums also bloom along many trails in Northwest Portland’s Forest Park, which sprawls over more than 5,000 wooded acres (2,023 hectares) and boasts 70 miles (113 km) of paths filled with fascinating flora and fauna.

From Forest Park, follow the Beech Trail to Hoyt Arboretum in Washington Park. Home to nearly 1,000 species of shrubs and trees — more than any other arboretum in the nation — Hoyt has plenty to offer all year-round. Spring highlights include bell-shaped Oregon plum flowers, magnolias, blooming dogwood and cherry blossoms.

Speaking of cherry blossoms, stroll through downtown’s Waterfront Park in late March or early April to find a breathtaking sight: 100 Akebono cherry trees popping with pink and white petals. (Fun fact: The trees were given to Portland in 1990 by a group of businessmen from the Japanese Grain Importers Association.)

For cherry trees in a more traditional setting, visit the Portland Japanese Garden, heralded as one of the most authentic Japanese gardens outside of Japan itself. And while you’re exploring authentic Asian gardens, don’t miss downtown’s Lan Su Chinese Garden; in spring, fragrant scents of daphne and Edgeworthia enhance this Ming Dynasty-style garden.

Visit Southeast Portland’s Crystal Springs Rhododendron Garden in April or May to catch its collection of rare rhododendrons, azaleas and hybrids in full bloom. The garden boasts 7 idyllic acres (2.8 hectares), including three waterfalls, two picturesque bridges and tranquil Crystal Springs Lake, where nearly 100 species of birds feed and nest. For an extra treat, visit on either the first weekend of April or Mother’s Day weekend, when the garden hosts its annual flower shows and sales.

A 45-minute journey south of Portland delivers you to Woodburn’s Wooden Shoe Tulip Farm, home to 40 acres of colorful tulips. The annual Wooden Shoe Tulip Festival, held each April, also offers wine tasting, wagon rides, children’s activities, a food court and a marketplace offering freshly-picked tulips and bulbs for fall planting.

No flora-viewing adventure would be complete without the City of Roses’ namesake flowers. Both Peninsula Park in North Portland and the International Rose Test Garden boast thousands upon thousands of rare and beautiful rose bushes, which typically begin to bud in early April. To catch them at their peak, visit in early June and don’t miss the Grand Floral Parade at the annual Portland Rose Festival!

Posted on March 28, 2018 at 6:24 pm
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New Music Venue to Open in the Pearl

River Pig’s Ramzy Hattar is planning to open an 8,000 sq. ft. music lounge in the old Oba space. Hattar is planning to invite famous chefs to utilize the expansive kitchen. For more information click here.

Posted on March 23, 2018 at 8:32 am
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6 Tax Myths Even Smart Homeowners Believe are True

| Mar 19, 2018 | realtor.com

With all the mayhem and misconceptions flying around, we’re here to set the record straight, by highlighting the top tax myths that might dupe even the financial Einsteins among us—both for this filing year (which is still under the old IRS rules) and next, once the new tax code takes effect.

So whether you want to enter this filing season with clear-eyed confidence or just test what you know, check out this list and ask yourself honestly: How many of these fake tax facts did you believe were true?

Tax myth 1: The mortgage interest deduction is gone

On the contrary: If you bought your home before Dec. 15, 2017, you’re in luck: You are grandfathered in under the old tax laws and can still deduct all of the interest on loans of up to $1 million, says Tom Wheelwright, CPA and CEO of WealthAbility.com. Yes, even when the new tax codes go into effect next year.

And for those who bought a home after Dec. 15, 2017, or plan to in the future, it’s not as bleak as many think. Starting next year, mortgage interest is still deductible; it’s just that the deductible amount is capped at $750,000.

Tax myth 2: Property tax deductions are gone, too

In the past (and for the last time this year), most taxpayers could deduct state, city, and property taxes in their entirety. Under the new tax plan next year, these taxes are still deductible, but there’s a cap—of $10,000 per year, says Mario Costanz of Happy Tax.

In other words, property tax and mortgage interest deductions are far from gone … but one thing to consider is that next year, the standard deduction nearly doubles—to $12,000 for single filers and $24,000 when filing as married. As such, it may not make sense for as many people to itemize their deductions unless it amounts to more than this high new bar. Here’s more info on how to tell whether you should take the itemized vs. standard deduction.

Tax myth 3: If you work at home, you can deduct a home office

Some people mistakenly think that anyone who fires up a laptop at the kitchen island has a “home office.” But to take a home office deduction, that area must not only be used regularly and exclusively for business, it has to be the primary site of the business. So if you turned a spare room into a dedicated work space, you can claim it. But if you occasionally work in the living room, that’s not deductible, says Josh Zimmelman, owner of Westwood Tax & Consulting, a New York-based accounting firm with offices in Manhattan and Long Island.

Plus, things get even stricter under the new tax codes.

In the past, office employees who occasionally worked from home could claim eligible home office deductions that might include, say, business expenses that were not reimbursed by your employer (here’s more about how to take a home office tax deduction this year). But starting in 2018, only self-employed people can deduct their home office in any way. So if you own your own business, you’re fine; if you’re paid by W-2, you can kiss this deduction goodbye when you file next year.

Tax myth 4: You can deduct all of your home renovations

Sorry, DIYers: Home improvements are generally not tax deductible unless the residence also serves as a rental property. But there are a few exceptions where homeowners can cash in.

The first is if modifications were made for medical purposes that don’t increase your property value, which might include installing railings or support bars, building ramps, widening doorways, lowering cabinets or electrical fixtures, and adding stair lifts. Note: You’ll need a letter from your doctor to prove the modifications are medically necessary to claim these deductions. Plus, those expenses must exceed 10% of your adjusted gross income in 2017, which drops to 7.5% in 2018.

The other time you can deduct renovations is if they were made in order to sell your home.  You can deduct those expenses as selling costs, as long as the home improvements were made within 90 days of closing.

Tax myth 5: All home equity interest is deductible

Homeowners can turn to a home equity loan or line of credit (HELOC) for cash to either make home improvements or for more general expenses, like paying for a child’s college tuition or wedding. And in past years, the interest on these loans was tax-deductible.

Not so for next year: While the IRS has not yet issued any formal guidance, it appears that with the new tax law, HELOC interest is only deductible if the loan is used for a “substantial home improvement,” says Professor David Reiss of Brooklyn College. Also keep in mind that next year, your total deductible mortgage and eligible home equity debt must be less than the $750,000 cap.

Tax myth 6: You can always deduct your moving expenses

Up until this year, taxpayers could only deduct a portion of moving expenses when they relocated for a new job that’s at least 50 miles farther from their former home than their old job location. And per the new 2018 tax bill, no moving expenses of any kind are deductible. The only exceptions are for members of the armed forces on active duty.

Posted on March 20, 2018 at 11:29 pm
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Looking to Get Away?

Hawaiian Airlines is now offering direct flights from Portland to Maui. #Aloha

Posted on March 19, 2018 at 8:23 pm
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4047 SW 58th Avenue | Northwest Traditional

Posted on March 13, 2018 at 10:37 pm
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