How Skills Gap Is Artificially Inflating Housing Prices
Q: Gerald, why has construction labor become so expensive lately and how is this going to affect real estate going forward? Eric, Quincy, MA
A: Despite the fact that according to latest data, there are as many available jobs in the US as there are job seekers, the reality is that the available labor force lacks the skills to fill many vacancies particularly as it relates to construction. The housing bubble fiasco of the last decade displaced many construction workers and disincentivized many younger people from pursuing construction labor work which has caused a skilled construction labor shortage. This labor shortage in turn disincentivizes builders from building which exacerbates housing inventory shortages which causes home prices to rise further, faster. Housing is an ecosystem, change to any part of that ecosystem will reverberate throughout the entire system. Skills training may help which could be offered in high schools, trade schools and community colleges. The bottom line is that more skilled construction workers would result in higher employment, more construction, higher housing inventory levels and more affordable houses for sale.
Thanks for your question, Eric. For more real estate information and tips visit my blog at geraldlucas.com.