California workers are getting ready to put on their hard hats as construction employment is expected to amp up in the next year. Recent reports are indicating that builder confidence is rising, as are the local economies of Southern California, which will help to fuel the building of homes as well as commercial spaces over the coming months and well into 2015.
On the national level, builder confidence is ever slowly notching its way up. The National Association of Home Builders/Wells Fargo Housing Market Index, which gauges builder perceptions of current home sales and expectations for the next six months, rose to a score of 49 in May. This is an increase of 4 points from April and one of the highest levels the index has seen since January. At 49, the index value is still in the “poor” range as indicated by the study, but is on the cusp of moving into “fair,” which begins at a value of 50 and higher.
“Consumers are still hesitant, and are waiting for clear signals of full-fledged economic recovery before making a home purchase,” said NAHB Chief Economist David Crowe. “Builders are reacting accordingly, and are moving cautiously in adding inventory.”
However, inventory is exactly what is needed as local construction companies are preparing to hire new workers in anticipation of a surge in construction over the next year.
Southern California to Add Construction Jobs
According to the latest report from Chapman University, construction was of the industries to add the most jobs in 2013 with a swell of 7.8 percent statewide. This increase is being fueled by advantageous market conditions throughout the state such as higher home prices, strength in the stock market and very high consumer sentiment levels. Southern California housing markets have suffered from a dearth of inventory in the last few months, which has tightened the market substantially. It seems as though developers are finally ready to answer that call with an increase in new homes over the next few years.
Over the next two years, 813,000 jobs are expected to be added with a large portion of those projected to be in construction. Spending on construction has ramped up in the last two years, and it has been predicted that it will increase by 25.5 percent by the end of this year.
While it is doubtful that the increase in jobs will do much to help out home appreciation rates, which have tumbled a bit in the last few weeks, this is good news for the California economy overall. Californians have been faced with limited income growth and higher mortgage rates and next year it is predicted that the average family will have to set aside a larger portion of income in order to be able to afford a home in the traditional market.
Southern California is seeing a wide range of activity on all levels of the market and is an exciting place to invest in a home. If you are in the market for a luxury home in the area, please feel free to give our team a call.
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(all data current as of 6/22/2017)
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