The Real Estate Story: From Bust to Boom
SACRAMENTO (CBS13) — From Bust To Boom: Construction Picking Up But Where Are The Workers?
Signs of life are finally showing in the housing market and some construction companies are hiring again.
But the challenge now is finding skilled workers... workers that left the industry in the hundreds of thousands when the market crashed.
When the housing market started to take a downturn in 2005, construction worker, Gary Lemmons, was laid off from Beutler Corporation.
"I was devastated. I had kids depending on me, that was the worst of it all, made me feel like I was a failure," said Gary.
The father of five went back to school for the janitorial industry and took odd jobs.
"I just survived. I never gave up, I knew it would get better," said Gary.
But better didn't come for many years.
"It wasn't pretty," said Rick Wylie, President, Beutler Corporation.
Wylie, Gary's boss, says his company suffered severe cuts from 2,100 employees in 2005 to only 270 by 2011.
"It's just been gut wrenching, not only seeing the layoffs. Going from 2,100 people down to less than 300, that's more that most companies are. Everyday, I realize I've just laid off another company," said Wylie.
And Wylie's company isn't alone. At the height of the housing boom in June 2006, there were 959,000 people statewide working in construction according to the Employment Development Dept.
That number was cut almost in half by January 2011 to 533,700.
By February of this year, it's crept up to 595,000.
As for new home construction permits, the number of single-family units jumped 57% this January to 2,613 from 1,660 in January of 2012, according to the California Building Industry Association.
"We just opened that about 45 days ago," said Chris Cady, Division President, KB Home.
Cady says they're starting to buy land again and while he can't release specific numbers, he says home sales are already better this year than last.
"What's happening is as the economy continues to improve, we're coming through recovery, we've bounced off the bottom, they're out now saying now's the time to buy, interest rates still at historical lows, they're feeling good in general where the economy is going," said Cady.
I asked Cady, "Are we on a upswing of a boom?
"I think we are. So obviously there's a lot of activity, we're feeling the pressure on our contractors partners, trying to get labor back in the work force," said Cady.
Developers and others hope to provide a solid foundation for figuring out how long this current boom will last. Even so, they'll be applying the lessons of the past for projecting future growth.
One lesson they're learning right now... finding skilled labor isn't easy for companies, like Beutler.
I asked Wylie, "Some of them turned to other employment?"
"We kind of wondered... where did they all go?" asked Wylie.
Wylie says a fifth of his employees retired and many, like Gary, went into other professions or moved away. Wylie is now having to train new workers, some fresh out of high school.
He's hired 226 people since January of this year. Gary was one of the lucky ones to get a call back from one of Beutler's HR reps.
"When she called me at first, I didn't believe it, but she told me, no this is real. I kind of broke down and I did shed a couple of tears because I love Beutler, Beutler has always been good to me," said Gary.
Rick Wylie expects Beutler to grow 50% this year alone but compared to the height of the market, he says production is only at a quarter of what it used to be.
