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

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment 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.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
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.
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.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid