The State of the Building Industry in Lewis County
The forecast and the challenges.
By Jill Williams, Communications Director for Olympia Master Builders
Nationally, builder confidence in the market for newly built single-family homes remained unchanged at a solid 67 reading in September of 2018 on the NAHB/Wells Fargo Housing Market Index (HMI).
“Despite rising affordability concerns, [nationally] builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market,” said NAHB chairman Randy Noel.
“A growing economy and rising incomes, combined with increasing household formations, should boost demand for new single-family homes moving forward,” said NAHB chief economist Robert Dietz. “However, housing affordability is becoming a challenge as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish. Interest rates are also forecast to keep rising.”
Locally, the housing market appears to be on a constant rise as well, but not without similar struggles for professionals in the building industry. OMB Lewis County Member, John Johnson of Johnson Custom Homes states, “The housing market is on a fast and steady growth path in Lewis County, which is great for area economy. The problem we are seeing is that as the demand for new construction and remodeling projects increase, we are struggling to find skilled workers to bring on board to keep up with the demand. The shortage of labor in the industry directly results in higher housing prices which affects the big picture of housing affordability and shortage in inventory.”
The shortage of new inventory in Lewis County also has a major impact on the local real estate market. Max Vogt of Windermere Realty couldn’t agree more. “There is a high demand for new housing in Lewis County, but most clients are quickly discouraged because of the lack of new construction and low inventory available. As soon as a spec house or new listing hits the market, it’s gone. And, there seems to be very few new developments in the works despite the high demand. The end result is many clients are putting efforts into flips, rehabs and remodels instead of buying, which hugely impacts the real estate market,” he says.
Although, things are starting to look up for Lewis County. According to Lee Napier, Director of Lewis County Community Development, “The single-family resident permits issued to-date for 2018 is at an increase of 119% over this same time in 2017.” She also added that the issue of Septic Permits, which are a great indicator of future building, is up by 117% from 2017 as well.
“In terms of policy, this is an exciting time for residential construction” explains Erin Hall, OMB Government Affairs Director. “City and county governments have realized that housing shortages hurt their community. As a result, they’re working with organizations like OMB more collaboratively and creatively than ever before. Homebuilders are being seen as vital partners in community success.”
According to Jan Himebaugh, Building Industry Association of Washington (BIAW)’s Government Affairs Director, at the state level, BIAW and a variety of stakeholders are working to provide a broader range of housing options for Washingtonians which includes condo liability reform and general regulatory streamlining so that homes can get to the market quicker.
Even with the high demand of new construction and the positive relationship between local builders and the county, some solutions are still much longer term. The shortage of labor plays a significant role in the pace and cost of construction. The OMB Education Foundation is committed to making change by supporting workforce development in all five counties served. The Foundation awards scholarships to further industry education as well as getting out in the community to talk directly to youth and encouraging them to consider careers in construction.
Based on the county data and high demand, even with supply-side construction hurdles, such as shortages of labor and increases in the price of building materials, the foreseeable future of housing in Lewis County will soon take a turn for the better.
If you are in the market to hire your next Lewis County builder, remodeler or general contractor, visit omb.org to access their Hire A Pro searchable database.
MEMBER SPOTLIGHT
This month, the Lewis County Chapter of OMB would like to spotlight long-time OMB member Jason Kunz of NFP Property & Casualty Services, Inc. Jason has been in the insurance business for over 20 years and specializes in Commercial/Business Insurance.
Jason is proud to serve Lewis Cunty as an independent insurance carrier and can help businesses where other carriers cannot.
Jason lives and plays in Chehalis with his family. When he is not providing insurance services, he can be found in the community coaching Little League Baseball and volunteering as a Cub Scout Den Leader!
If you or your business is in need of insurance coverage, please call Jason Kunz at 360-748-8855 today!
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