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Triangle House Construction Slowing

Posted September 21, 2007

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— For all the growth in the Triangle, the national housing crunch is starting to creep in and home sales are slowing.

New home building permits are down by 9 percent in Wake County compared with last year, but the economic impact goes well beyond buyers and sellers. Jobs are on the line.

From the siding crews to the mortgage lenders, an estimated 50,000 people in Wake County make their living off building homes. Housing-related jobs account for about 10 percent of the economy.

“Furniture companies, people who sell window coverings, landscaping companies – its not just trickle down. It’s kind of a spider web,” said Trish Hanchette, KB Homes’ division president.

Hanchette said the Triangle has been blessed with a steady housing market, but slowdowns have implications.

“You have to be concerned. There are people we employ. We care about those people,” she said.

“It does appear as if the overall national slowdown is beginning to be felt here,” said N.C. State University economist Mike Walden.

That bodes well for home buyers as builders compete for a shrinking market share, according to Walden. The problem is that plenty of jobs depend on that market.

“This is a big, big industry, and anything that's going to slow down that industry could have noticeable effects on things like our overall employment rate as well as our unemployment rate,” Walden said.

The home sales slump is clearly hitting the local real estate industry. Applications for real estate licenses are down about 60 percent.

38 Comments

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  • Steve Crisp Sep 23, 2007

    And real estate agents SHOULD get paid significantly more than the guy who put in the door. An agent has invested time, money, and effort into selling the house. The guy who puts in the door has not even invested in the door itself.

  • newtodurham Sep 23, 2007

    Good...Just what we need: controlled growth and less real estate agents. Its about time they got a real job and earn their money. They get paid more for opening a door than the guy who put the door in.

  • Iseeu Sep 23, 2007

    Oh No! what will our ilegals do? A lot of them are working in house building jobs.

  • Steve Crisp Sep 22, 2007

    To wcnc:

    Waht is the difference between buying a house for $500,000 but having it worth only $400,000 when you try and sell it and investing the same half million in the stock market and losing $100K?

    People take losses on investments all the time. Yet it seems that only when it is in the housing market is when it becomes sacred.

    And remember, one person's loss in California is another person's gain in North Carolina. Even if they take a bath out west. when they do sell that house, they will be able to take the sale value and buy something bigger here. And with all that cash floating around to purchase less expensive houses in NC, our prices go up, benefiting those locally who are selling.

    And this is not a zero sum gain. One loss in the west is not directly offset by one gain in the southeast. Though there will be losers there will be more winners in the long run.

  • Steve Crisp Sep 22, 2007

    So what are those 14 million supposed to do? I would strongly suggest that they see the handwriting on the wall and go back to school. Get a degree in any one of hundreds of lucrative fields. Learn a trade. Start a second career on the ground floor part time and work your way into management.

    And for those who simply are not capable of learning anything except semi-skilled manual labor, well, there will always be people who have made it financially and need laborors to move things around, cut lawns, and do other semi-skilled labor things. Given the gross shortage of teachers and nurses alone, the education and health care industry could probably absorb a significant number of those folks -- if they had the training and education -- over the next 10 to 20 years.

    We were once an agricultural society. Then came manufacturing. Now is service. Next will be information. After that, who knows? Leisure? But folks had better be prepared when dynamic shifts in the workforce start happening.

  • Steve Crisp Sep 22, 2007

    To made in USA:

    "What I'm saying is that many companies are sending their factories, their jobs, their investments, their entire workforce(s) overseas and where does that leave us? Jobless."

    So let's look at the numbers. As of August 2007:

    Total non-farm employment: 138,037,000

    Total manufacturing employment: 14,003,000

    10.1 percent of our entire labor force is engaged in all facets of manufacturing.

    That's it.

    Ask most people and they would guess that upwards of fifty percent of our labor force is manufacturing. But that would obviously be false. Indeed, government employs more people than manufacturing at 22,154,000. So what would happen if every one of those jobs were lost as of Monday morning? You would have 14 million people scrambling to find jobs in the service sector. And if you wil go to http://www.bls.gov/news.release/empsit.t14.htm, you will find that most service sector jobs are not hamburger flippers making minimum wage.

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  • Made In USA Sep 22, 2007

    wcnc: The business where I work has dropped tremendously since 2001. Orders are way down. My hours have been cut. Company benefits have tightened up, especially health insurance. This company is dependant on the housing indusrty. Any more setbacks could result in layoffs. I've worked there 19 years, and this is the worst I've seen it. As far as having "only" a $85,000 mortgage...a dollar to me might be like a penny to some people. On the other hand, it might seem like a hundred dollars to the other guy. I am by far not rich. I worked hard for everything I own and have earned it honestly. A foreclosure is getting pretty common these days everywhere you turn. That's what scares me.

  • wcnc Sep 22, 2007

    Flynn- how about those people in CA, VA, NY, etc who bought a house last year and now this year it's worth $50,000+ less!! I think they'd rather live here where that kind of think is NOT going to happen!

  • wcnc Sep 22, 2007

    Madein USA-
    Why is this scary and why would it effect your closing?? Do you think you are about to lose your job?? I'm not being "smart", just wondering why the housing slowdown (not stoppage) would stop you from getting that small of a mortgage...

  • tmedlin Sep 22, 2007

    Made In USA - I understand your sentiments - maybe we need to look at providing INCENTIVES for businesses to STAY here , instead of leave - you know - get in the global economy game...
    The main reason we haven't, is because so many people DEPLORE "business", without realizing that's where their own livlihood comes from, not the govt....

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