According to a research conducted in 2012 by EMSI, more than half (53%) of all tradesmen/women in the U.S. market were above the age of 45. The study further revealed that skilled workers between 55-64 years were close to 20%. This being the national averages, there are some areas like New Jersey, Connecticut, Rhode Island and New Hampshire where skilled trade workers above 45 years account for more than 60 percent. The figures are alarming because they revealed that the younger generation of professionals is focusing on industries such as finance, accounting, engineers, business management, psychologists and others hence leaving the skilled labor with only a small percentage.
The Impact of this Trend on U.S. Real Estate Industry
Real estate industry relies heavily on skilled labor force. This is why real estate experts are raising the red flag about the aging/shrinking workforce because it will hit the industry hard in coming years. They believe those technicians fixing or building new properties will retire very soon, and due to lack of adequate replacement, the demand of those in the market will rise, so the cost of hiring them, resulting to high cost of properties. Although immigrants represent a good percentage of
Although immigrants represent a good percentage of skilled labor force in the construction industry, the overall population of migrant communities in the United States has continued to decrease since the year 2000. The number of immigrants with technical skills is high in areas like painting, carpentry, brick masonry, drywall installation and construction labor. However, if their population is decreasing, the number of those with technical skills will also reduce.
The reason why this trend has emerged in the U.S. is because parents and kids believe university education is paramount to find one a white-collar job in the corporate world. This implies that businesses are employing many accountants, managers, engineers and other professionals at the expense of skilled work force. In the coming 10-20 years, the construction labor cost will be on the rise, making cost of properties unaffordable to many. This trend may be reversed if the Americans can strategize and educate parents as well as learners the importance of skilled labor force on the market.
The shortage of affordable housing in almost every county in the United States is evident there is shortage of tradesmen in the market. According to experts, this shortage has been brought by low pace of constructing these types of properties. Instead, property developers are focusing on luxury homes and apartments where the returns are bigger. In fact, builders are forced to pay more to hire quality tradesmen/women, leaving them with only one option of developing properties that can offer them bigger margin to recover the cost. Although some economist may describe the situation as normal inflation, it is not the case because housing affects every American household.
The minimize the short-term effect of lack of skilled trade workers, property developers should construct durable and long lasting buildings. Moreover, those buying already built properties should access the quality and standard of the property to ensure it has durable finishes that minimizes future labor costs. Experts believe the construction of properties and in-house management should be integrated to keep these labor costs on control. In addition, property management firms should embrace technology like apartment Video Tours to enhance their efficiency and also as a toll to cut down other costs.