FL: Construction job losses may be steeper than estimated

[Nouveauxpoor]

Slump hammers homebuilders

Local officials say job losses may be much steeper than state estimates

BY SCOTT BLAKE

The pain in the local housing market isn't limited to Realtors and people trying to sell their homes. Construction workers also are getting their share.

Brevard County has lost a big chunk of its construction jobs during the past year, as a result of the slumping housing sector.

The number of local jobs in construction, mining and natural resources fell to 17,100 in June, down 1,500 jobs from 18,600 jobs in June 2006, according to the latest data from the U.S. Bureau of Labor Statistics.

However, local homebuilding officials estimate the local job losses in construction may be much steeper.

The extent of the loss of construction jobs has gone relatively unnoticed, local industry experts said. That's because many laid-off construction workers have gone back to mostly lower-paying jobs they held before the housing market boom, or they have moved to jobs in other states where the housing market is more active.

"A lot of the jobs have migrated to Tennessee, North Carolina, South Carolina and Georgia," said Franck Kaiser, chief executive officer of the Home Builders & Contractors Association of Brevard. Those states "didn't have the big price run-ups that we had" in home prices during the boom years.

Brevard's unemployment rate in June was 4.1 percent, up from 3.4 percent a year earlier, according to state labor statistics.

Another reason why the construction job losses have not had a bigger impact on local unemployment and economy is because many of the jobs were filled by undocumented immigrants, who tend to move where jobs are available.

Dave Armstrong, treasurer of the Florida Home Builders Association and owner of Armstrong Custom Homes in West Melbourne, didn't have an estimate of how many undocumented immigrants work in construction locally.

However, nationwide, they account for as much as 30 percent of the construction work force, Armstrong said.

Kaiser and Armstrong say there may be as many as 7,500 fewer jobs of various types in the construction industry now than there were a year ago -- despite the significantly lower count of job losses by the Bureau of Labor Statistics.

Big builders feel pinch

Even big builders haven't been immune to the slowdown. Mercedes Homes, the area's largest homebuilder, recently reduced its staff by closing its Palm Bay office and moving some of those workers to its headquarters in the Suntree area.

"We recently merged our Space Coast and Palm Bay divisions in response to reduced demand in the current housing market," said David Barin, president of Mercedes' Space Coast Division. "Like other builders, we have had to lay off and transfer some employees as the industry searches for equilibrium."

Among the ranks of the recently unemployed in local construction is Martin Carrizales, who was laid off with other workers last week from his job as a roof designer after 11 years.

"They just told us one day, and we were gone," said Carrizales, 50. "They said, 'It's just the market. No one's building, no one's buying.' "

The people who have lost their jobs "have homes, cars and other bills," Carrizales said. "It's creating a lot of foreclosures. Things like that have ripple effects" on the economy.

The number of mortgage foreclosures in Brevard has continued to rise, with 385 foreclosure filings in June -- the most for any month in at least 5 1/2 years, according to the Brevard County Clerk of Courts, which tracks such cases.

During the first half of 2007, there were 1,975 mortgage foreclosures filed with the clerk's office, compared with 1,144 for all of 2005 and 1,868 for all of 2006.

As tough as the local housing market may be, conditions are less stable in some Florida markets.

Forbes magazine recently named Miami and Orlando as the nation's two riskiest housing markets. Rounding out the five riskiest were three California markets -- Sacramento, San Francisco and San Diego.

Alan Hunter, a housing market analyst with Metrostudy in West Palm Beach, expects housing prices in South Florida to continue to fall for another year -- in some places as much as an additional 20 to 30 percent -- stemming from artificially inflated prices and an excess of housing construction.

"Prices just got way out of line with what people could afford," Hunter said.

Home prices fall

When the Brevard housing market was hot, the industry couldn't get enough tradesmen and laborers.

The Brevard Workforce Development Board received a state grant to help train local workers to go into the construction trades, and assigned a staff member to oversee the program.

However, not long after the grant arrived, the housing market began the downturn, and the program ended last month, Brevard Workforce Development Board spokeswoman Joan Van Scyoc said.

Meanwhile, the board's local employment assistance centers are seeing an increase in the number of job-seekers from the construction industry, she said.

"We are aware that construction companies have been laying off, but they do not typically work with us on layoff services, so this is anecdotal information," Van Scyoc said.

The primary reason construction jobs have been cut is because of the market's inability to sustain elevated prices.

The median single-family home resale price in Brevard fell from a peak of $248,700 in August 2005 to $198,000 in June -- a 20 percent drop.

With the decline in prices, homebuilders have sharply reduced construction of new homes.

In the first half of 2007, a total of 1,113 construction permits for single-family homes were issued in Brevard.

At that rate, there would be 2,226 single-family permits issued for the whole year. That would be down from 3,867 single-family permits last year, and a record 7,273 single-family permits in 2005, according to statistics from the Home Builders & Contractors Association of Brevard.

It also would be the lowest number of single-family permits in Brevard since 1982, when 1,718 were issued.

From a builder's perspective, it isn't getting any cheaper to build homes, as the costs for construction materials have continued to rise, Kaiser said.

As a result, "it's not likely prices will go much lower" for new homes, he said.

But a recovery isn't expected any time soon.

Armstrong said some homebuilders have stopped building in Brevard.

He doesn't expect construction to pick up to more normal levels until late 2008, although no one can be sure.

"It's a tough market," he said. "The housing market can't be timed. It's like playing the stock market."

Contact Blake at 242-3644 or sblake@floridatoday.com.

http://www.floridatoday.com/apps/pbcs.d ... /708010384

[hattiecat]

In North Carolina the homebuilding industry is full of Mexican people who speak no English. I really believe the majority of illegals in this state are in the homebuilding industry. Why can't the builders be accountable for who their subcontractors hire?!