Page 8 - Builder Brief June 2021

2021 PRESIDENT
THE FUTURE LOOKS BRIGHT
for the Home Building Industry
The Greater San Antonio Builders Association (GSABA) is part of the Responsible Growth Alliance (RGA) along with the Real Estate Council of San Antonio (RECSA), the San Antonio Board of Realtors (SABOR) and several non-profit trade associations representing companies and individualsinthedevelopmentandconstructionindustry. Keyleaders and members of our Alliance met at GSABA on Wednesday, May 5th with Jon Hockenyos , CEO of TXP. Jon is an Economist who performs technical analysis and develops strategies for organizations like RGA, municipalities and other companies throughout the State of Texas.
RGA retained Mr. Hockenyos and TXP to give us an overview of the San Antonio Regional Economy and the impact of residential and commercial building and development on our local economy. One of the bright spots of his report was on residential construction. He shared that we were in the ‘perfect storm’ of low interest rates, in-migration and development projects in the pipeline. The local report showed that annual wages in construction continue to rise in San Antonio with entry level income topping almost all other industries. An experienced construction employee made over $61,000 in 2020.
The impact of the development sector in San Antonio has never been greater. Our industry provides $38.2 billion in economic activity, $7.7 billion in worker earnings, over 143,000 jobs and $263 million in local tax revenue.
The data was compelling: home prices rose sharply; inventory is at an all-time low and home sales are at an all-time high. Jon stressed that the future looks bright with solid population and employment growth forecasted however there will be critical issues that need to be addressed like the availability of and the rising costs of construction materials.
As you know, lumber prices have been extremely volatile in the wake of the COVID-19 due to increased demand and supply-side constraints. The unprecedented spikes in lumber prices have added nearly $36,000 to the average price of a new single-family home. While the housing sector is a leader in the nation’s economic recovery, these sharp price increases are hurting the homebuying public, our members and our economic recovery efforts.
The escalating lumber prices are largely due to insufficient domestic production and extremely large lumber mill curtailments. We received distressing news on May 22nd that the U.S. Commerce Department proposed to double lumber tariffs on Canadian lumber shipments into the U.S. from 9 percent to 18.32 percent. This will cause uncertainty for our Builder members and price millions of households out of the housing market. We must stand together and fight to change this increase should it happen.
ED BERLANGA
We are working with our San Antonio Congressional delegation and U.S. Senators to provide them with information on how these increases will exacerbate the nation’s housing affordability crisis.
We are hearing from a few of our members that they have paused some construction activity as costs have risen and delivery of key materials are being delayed. We will continue to stay engaged with material shortages and bring you factual and timely information.
Thank you for being a GSABA member and for all that you do for our industry and community.
Sincerely,
8 JUNE 2021 | GREATER SAN ANTONIO BUILDERS ASSOCIATION