“Business is great. Colorado and Denver is growing significantly,” Heather Gray, Toll Brothers Sales Manager said.
CGTN’s Hendrik Sybrandy reports from Colorado.
The company, which calls itself America’s luxury home builder, plans to put up more than 100 homes in the Flatiron Meadows neighborhood in Erie, Colorado. Gray thinks the residential construction industry is on pretty firm ground these days.
“People are realizing the great investment that goes along with real estate,” Gray said.
Still, according to the U.S. government, single-family home starts in March 2017 were about half of what they were at the peak of the housing bubble. Although, construction spending in the U.S. was up nearly five percent in the first quarter of this year compared to the same period in 2016, the economic problems of a decade ago continue to affect this industry.
“It’s still in people’s heads, that downturn, as far as worried about making a decision: should they buy or not?” Ron Throup, of the University of Denver’s Daniels College of Business said.
Throup said not only is there lingering nervousness among some homebuyers, many builders who left the industry have yet to come back. That’s contributed to a shortage of new homes.
“I mean we have less than two months’ supply, in some places, less than a month’s supply of inventory on the market,” Throup said. “Normal markets historically have been four or five months.”
Many homeowners are choosing to stay in their homes rather than engage in a bidding war to buy a new one. The median length of home ownership is up significantly. Home remodelers are benefitting from that.
“It’s crazy,” Kai Hua Song, S & J Construction General Manager said. “You can choose what you want to do.”
When Song moved to the U.S. from China, his first project was finishing his own basement.
“Then some other friends said, ‘oh wow, you can do it,’ ” Song said. “Then they just spread out the news. I get some business that started. Never stop.”
Song does most of his own work which is a good thing, because construction labor can also be in short supply.
“We have a shortage in labor.” Throup said “That’s really pushed up prices and prices of material, too. So it costs more to build that new home.”
Despite all of the headwinds, construction activity is on the upswing in Erie and elsewhere. The rebuilding of this vital U.S. industry is a work in progress.