News / USA

Home Construction Industry Suffers in Dismal US Housing Market

A construction worker puts a roof on a house in a western suburb of Chicago, (File).
A construction worker puts a roof on a house in a western suburb of Chicago, (File).

Multimedia

In 2010, about 323,000 new homes were sold in the United States.  That’s the worst year on record since 1963.  The dismal housing market in the United States, flooded with abandoned properties and foreclosures, has forced many out of the home construction industry.  The building suppliers and construction workers who remain in the U.S. Midwest are trying to deal with the worst economic environment their industry has seen in decades.

Builder Hal Stembridge started his construction business in 1979, during a recession, when interest rates were high and fewer new homes were constructed.  Nothing he learned then could prepare him for what he’s dealing with now. “People say that it’s a recession when your neighbor gets laid off, it’s a depression when you get laid off, well this is just devastation," he said.  "This is just coming out and wiping everybody in the trades… it’s just wiping everybody out.”

Stembridge is one of the few home builders in suburban Chicago still actively seeking the few customers who want to build new homes.  He is fighting to say afloat, and directs some of his anger at the government.

“They’ve bailed out the banks.  They’ve bailed out Wall Street.  They’ve bailed out the car companies.  But the largest employer in the United States is still suffering and that’s homebuilding,” Stembridge noted.

About 54,000 new homes were built in the Chicago area in 2005.  So far this year, only about 3,000 building permits have been issued to start construction on new housing.

Brandon Weiss got into the new home construction business at the height of the boom.  Now in the bust, he is surviving by retooling. “But kind of as the market dissipated in new construction, we had to find other ways and alternative measures of making ourselves relevant today.  So we definitely went into remodeling as kind of a focus point for a while.  We’re still there,” he stated.

Weiss purchased his recent remodeling project in a foreclosure.  Now completely renovated, this house is one of the most energy-efficient homes on the market in Elgin, Illinois.  It’s still for sale. “It’s tough right now.  Showings are really slow.  But I think that’s just market wide, not specifically on this house.  It’s just the market in general right now.“

The dismal housing market has a ripple effect all the way up the supply chain to independent retailers like the Edward Hines Lumber Company. “Hines at their peak was at 27 locations," he explained. We’re down to four.”

Doug Jones is the President of Hines Lumber.  “At the high point of Hines, they had over 1,200 employees.  We’re a little over 100,” Jones said.

Jones says the low point for Hines in 2008 was 60 employees, but hiring has picked up, thanks to new investment in the company.

But Jones’s small, independent building supply company still competes with bigger retail stores and other small suppliers for the business that remains. “The new home construction, at least in Chicago, is down over 90 percent from where it was in 2007.  So there are still enough suppliers out there but not enough people building homes.  It just makes it tough.  There’s not enough to keep them going,” he said.

Builder Stembridge says there would be enough to keep them going if the government stepped in to help. “The bottom line is each new home provides three jobs for one year in the U.S. and creates about $90,000 in tax revenue.  I don’t understand why the government doesn’t get behind new home construction [and help them get] back up on its feet,” he stated.

Even interest rates at record lows (below five percent) have not encouraged people to buy or build new homes.  And with unemployment rate in the U.S. at over nine percent, potential buyers are concerned about their jobs, and whether or not they can afford the mortgage that comes with home ownership.

You May Like

Mali's Female Basketball Players Rebound After Islamist Occupation

Islamist extremists ruled northern Mali for most of 2012, imposing strict Sharia law, and now some 18 months later, the region is slowly getting back on its feet More

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

Many Chinese-made products go unsold, for now, with numerous Vietnamese consumers still angry over recent dispute More

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid