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Multiple Factors Impacting Residential Construction Labor Shortage

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Residential Construction Labor Shortage

A lack of available housing is a consistent theme heard throughout the US these days, and that holds especially true in the Boston real estate market. Building new homes is an obvious solution to combating the housing problem. However, a slew of factors are negatively impacting the residential construction workforce.

Low Unemployment and Waning Interest in Construction Jobs

Just more than four percent of the U.S. population is unemployed and it’s not good for construction companies. When the pool of unemployed people is this low, construction jobs can be harder to fill. To compound the issue, many of the people who are available to work either lack the relevant skills or simply aren’t interested in construction.

The lack of qualified construction candidates can also be linked back to the classroom. Between budget cuts at the federal and state levels, trade and vocational schools aren’t producing graduates like they have in the past. This will continue to be a cause for concern as older construction workers continue to retire from the workforce.

Lack of Available Foreign Laborers

We can heavily attribute this to politics. Recent immigration reforms have resulted in more deportations of foreigners, who represent a large portion of construction workers. Even the undocumented workers who are available are having a harder time finding work due to greater compliance issues being placed on employers.

We’re Still Feeling the Aftermath of the Great Recession

After the housing market and financial collapse in 2007, the entire real estate sector absorbed a giant blow. Since then, fewer homes were built, construction layoffs were rampant and others who were spared found employment in different fields.

This drought lasted for approximately a decade and has led to the current situation – a glut of prospective homebuyers and a shortage of available houses. As a result of the high demand for new housing, developers are battling with the competition to find workers and offering higher than average wages, which eats away at profit margins.

Prospective Homebuyers Need to be More Flexible Now

Considering the factors mentioned above, it appears there will continue to be a labor shortage in the residential construction market for the foreseeable future. That means the number of newly built homes is unlikely to meet demand in the short-term.

Consequently, competition to buy existing homes will continue to be intense as it has been for the past several months. Those people who want to buy a home now may need to make concessions. This could include moving farther away than originally planned, searching for less expensive homes or foregoing home inspections (at the seller’s request).

Keeping this in mind, the home seekers who remain flexible in their quest will increase their chances of closing a deal.

Demetrios Salpoglou

Demetrios Salpoglou

Published July 6, 2017

Demetrios Salpoglou is the CEO of which is an information and technology based services company that provides cutting edge resources to real estate companies. Demetrios has developed over 90 real estate related websites and owns hundreds of domain names. Demetrios also owns and operates six leading real estate offices with over 120 agents.

Demetrios has pulled together the largest apartment leasing team in the Greater Boston Area and is responsible for procuring more apartment rentals than anyone in New England – with over 130k people finding their housing through his services. Demetrios is an avid real estate developer, peak performance trainer, educator, guest lecturer and motivational speaker.