Baker, Ahles & Kaskovich

Home builders deal with labor shortage as housing market stays hot

A shortage of construction workers has lengthened the time it takes to build a new home from four months to six or seven months, area builders say.
A shortage of construction workers has lengthened the time it takes to build a new home from four months to six or seven months, area builders say. Fort Worth Star-Telegram

A shortage of carpenters, masons and other construction trade workers continues to slow North Texas home builders as they ramp up for the spring selling season in what has become a very tight regional housing market.

The labor shortage, which started after the last housing crisis when many construction workers left the business for other industries, has lengthened the time it takes to build a new home from about four months to six or seven months, builders say. Combined with strong demand from buyers, it has left the area housing market with just a two-month supply of homes — a thin level that continues to push housing prices higher.

According to Residential Strategies in Dallas, builders last year broke ground on nearly 30,000 new homes in the region, up 5 percent from 2015. This year, area home starts are expected to reach 32,000.

“Were we not constrained by this lack of labor, we’d probably be starting about 35,000 houses,” said Ted Wilson said, principal with Residential Strategies.

Wilson said few workers migrated back from oil fields to construction jobs even as drilling activity declined the last couple of years. Meanwhile, many immigrant workers returned to Mexico and are now staying south of the border because of a stronger Mexican economy and enhanced efforts to secure the border.

“I’ve been doing this for 23 years and it’s without question the worst labor shortage I’ve ever experienced,” said Nelson Mitchell, president and CEO at HistoryMaker Homes in Grapevine.

A new immigration crackdown initiated by the Trump administration “could make it even more difficult and costly for the industry,” he said.

Kevin Egan, president of American Legend Homes which builds in more than 20 communities including north Fort Worth, said his company has actually limited sales each month to keep a steady flow of work for trade workers. “The worst thing we can do is sell more than we can build,” he said.

With area home prices shooting up about 10 percent a year, affordability has become a primary focus for builders.

Wilson said the strong demand for homes under $250,000 has pushed more development into Tarrant County, including developments along the Highway 287 corridor in north Fort Worth, west of Fort Worth in the Walsh development, along the Chisholm Trail Parkway in southwest Fort Worth and south towards Mansfield.

Builder has new Grapevine home

HistoryMaker Homes, a long-time Tarrant County home builder that has been in growth mode in recent years, now calls Grapevine its home.

The fourth-generation family-owned business, founded in Fort Worth in 1949, recently relocated to a new 28,000-square-foot office and showroom at 1038 Texan Trail, just north of downtown Grapevine, with 130 employees. The company, which says it doubled its revenue in the last two years, was previously based in 11,500 square feet at 9001 Airport Freeway in North Richland Hills.

In a telephone interview, Nelson Mitchell, HistoryMaker’s president and CEO, said the company has been expanding from its Tarrant County roots to communities across the Metroplex for about 15 years. And last year it entered the Houston market. The expansion made a central location in the Metroplex, near DFW Airport, more advantageous for its home office.

The company has three brands: HistoryMaker, its entry-level homes priced from under $200,000 to the high $300,000s; Rendition, for the move-up market prices from the mid-$200,000s to above $500,000; and Rendition Luxury, which are $1 million and above.

HistoryMaker completed more than 800 home starts in 2016, with revenue climbing to $200 million, up from $90 million in 2014. This year, it hopes to grow to 900-950 starts. Mitchell said the Alliance Corridor and Mansfield have been strong markets for its lower-end and mid-range homes, while Southlake and Westlake remain two of the best markets in the region for luxury homes.

“Clearly the market in DFW is very, very strong,” he said.

Like other homebuilders, HistoryMaker is focused on affordability with interest rates on the rise and costs for land and materials pushing higher. He said the company has retooled some floor plans to create smaller homes at lower price points.

But the new Grapevine headquarters has custom features. In addition to a 5,000-square-foot showroom, the facility has a full kitchen, a fire pit and bikes which can he checked out so employees can ride down to Main Street.

American still adding workers

The hiring spree at airlines continues, especially at Fort Worth-based American Airlines.

According to a U.S. Department of Transportation report released Tuesday, U.S. carriers employed 3.7 percent more workers, for 416,337 full-time employees by the end of 2016, compared with the year before. The agency said that was the highest for the industry since March 2008.

American added more than 2,200 full-time jobs last year, increasing its workforce to 99,508 employees. Since 2012, the carrier has grown its workforce by 10.7 percent, almost 10,000 new workers, if you include employment numbers from US Airways which merged with American in 2013.

“There has never been a better time to work in our industry and there has never been a better time to fly,” said American spokesman Matt Miller. “American is proud to have added more than 10,000 people to our team the past few years, while increasing the average annual pay per team member by more than 35 percent.”

Dallas-based Southwest Airlines added almost 4,000 employees in 2016, increasing its workforce by 8 percent to 53,536 full-time workers. In the past five years, Southwest grew its workforce by 16.7 percent, the DOT says.

Delta Air Lines added about 7,000 full-time employees, a 9.5 percent increase since 2012. Alaska Airlines, which recently closed its acquisition of Virgin America, grew its workforce by 24.4 percent to 11,527 employees in 2016.

Huff receiving real estate honor

In May, Jack Huff, a longtime Fort Worth commercial real estate broker and investor, will be inducted into the North Texas Commercial Association of Realtors and Real Estate Professional Hall of Fame.

Huff, currently principal at Transwestern in Fort Worth, will be joined by John Scovell, founder and chairman of Woodbine Development Corp. in Dallas. The ceremony is May 4 at the Dallas Country Club.

“Jack Huff is a legendary real estate leader whose hustle and business savvy have left a remarkable footprint on North Texas,” said Chris Teesdale, chairman of the 2017 Hall of Fame event.

Huff, who specializes in finding tenants for office space and the sale of office buildings, has brokered more than 1,150 transactions with a total consideration in excess of $1 billion in his career so far, the organization said.

Some of his more notable deals include the 1995 sale of Continental Plaza in downtown Fort Worth to Crescent Real Estate Equities and the 2014 sale of 66 acres at the Lockheed Martin Recreational Facilities to Fort Worth-based Trademark Property for the Waterside development.

Huff began his career in 1979 with Swearingen Management and two years later moved to The Swearingen Co. as part of the leasing team of the then-named City Center office towers in downtown Fort Worth.

In 1986, he was part of a group that founded the brokerage Huff Brous McDowell & Montesi and became affiliated with the NAI Global Services network. In 1999, the firm merged with Dallas-based The Stoneleigh Group and became NAI Stoneleigh Huff Brous McDowell in Fort Worth.

NAI Huff Partners was formed in 2005 when the Fort Worth and Dallas split. Huff Partners merged with Transwestern in 2011.

The NTCAR Hall of Fame was launched in 1988. Last year, John Goff of Crescent Real Estate in Fort Worth was inducted.

Sandra Baker

Andrea Ahles: 817-390-7631, @Sky_Talk

Max B. Baker: 817-390-7714, @MaxbakerBB

Steve Kaskovich: 817-390-7773, @stevekasko