Mid-Year Construction Report for Reno Released - KTVN Channel 2 - Reno Tahoe Sparks News, Weather, Video

Mid-Year Construction Report for Reno Released

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New home sales have increased recently across the country. What's happening here in northern Nevada? We got an insight into one strong indicator of our economy today at the Mid-Year Construction Review and Economic Forecast, hosted by the Builders Association of Northern Nevada.

Over 100 locals involved the building and real estate business filled a room to hear one speaker tell them: “We're back in the game of making this community grow." Certainly, a feel-good get together for the industry that felt the recession more than all the others. Reno-Sparks were boomtowns of building 8 short years ago. Today, Mark Krueger, the principal of ArchCrest Commercial Partners told us, "I think the near future for residential development is very positive."

You can see the evidence. There's life again on the old jobsites, and look at these numbers: from a 23% construction job loss statewide between 2009 and 2010, to a 10% improvement from last year to this year:

Nevada Construction Jobs:

(source: Associated General Contractors of America)

May 2009: 82,200

May 2010: 63,300

Job loss: 18,900 (-23%)

June 2013: 57,100

June 2014: 62,700

Job gain: 5,600 (+10%)

Krueger told us, "The best sign is the fact that streets are getting built again. Guys are adding to existing communities and spending the money to put the infrastructure in, which is a real good sign."

It really comes down to new home sales. That plays the biggest role in our local construction business. After the long downturn, home buyers have finally eliminated the big surplus in supply. But there's a new problem in the industry's way: a severe shortage of construction workers. As Mike Dillon of the Builders Association of Northern Nevada told us, "We lost probably 100,000 jobs in the construction industry in the state of Nevada. Those people have actually left the state."

Privately, he told me it's "brutal." He says the recession pushed construction workers to learn a new skill. Today they have new careers. Mark Ashworth, president of the Reno Sparks Association of Realtors told me, "Even though we are no enjoying a steady increase in return to market stability, many of those people are unwilling to move back."

That, in turn, is providing an upward momentum in construction wages. Which along with higher material costs and higher demand, is sending home prices up to a 6-year high. Look at this climb, from the market bottom in January 2012, to almost doubling since then to $263,500:

Washoe County single family median home sold price:

April 2008- $275,000

January 2012- $135,000

May 2014- $263,500

As Ashworth told us, "Our home inventory is low right now relative to historic levels, and that's what's pushing pricing up."

Not good news for buyers. But for builders and sellers…business is good.

 

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