Fly-by-night building contractors are offering construction crews on-the-spot bonuses and promises of increased pay to lure them off established job sites and onto new ones, builders said.
The nation's shrunken housing workforce left central Oklahoma untouched as homebuilding started to recover in earnest over the past several months. Crews never left because work here, while it slowed, never stopped as it did in most of the other parts of the country.
May's tornadoes brought the labor shortage home with repair work — and rebuilding still to come.
Roofing crews, especially, are being stacked and restocked like poker chips as the market deals in new players — including out-of-state contractors that swooped in, as usual, for easy pickings and local tradesmen who turned general contractor overnight, builders said.
They're saying, “‘I'll give you $200 right now, and a 25-percent raise to come with me right now.' And they're walking off,” said Robert Crout, president of the Central Oklahoma Home Builders Association.
“It's real difficult. Labor is really difficult right now. People are losing their crews. Not until after the tornadoes did it hit us,” Crout said.
Lots of trouble
Twists in the marketplace are hitting lot sales, too, said Moore homebuilder Marvin Haworth. He said questionable building contractors are buying up storm-scraped slabs and vacant lots as fast as some weary tornado victims can put for-sale signs in their yards.
It's different from the weeks following the May 3, 1999, tornado, Haworth said.
Then, storm-opened lots sold for $4,000 to as high as $12,000, with some owners misjudging the market, overpricing, and missing an opportunity to sell.
Last May's tornadoes hit with buildable lots scarce because land development slowed to a trickle during the housing slump.
“Now, in south Oklahoma City and Moore, there is a shortage of new lots. Builders are running around making offers,” Haworth said. “I've heard $25,000 to $30,000. ... And it's a bunch of builders I've never heard of — a guy who was a drywall contractor on May 19 and on May 20 he was a general contractor, if you know what I mean.”
Crout, a land developer, said that ideally, swaths of Moore and south Oklahoma City would be rebuilt a street or block at a time on lots put together and sold at the same time.
“The best scenario is for one person to put a whole area together and sell them to builders. But I'm afraid you're going to see onesies and twosies,” he said.
Haworth said the influx of newcomers caused the Moore Home Builders Association to suspend consideration of new applicants, to keep companies with motel-room offices and P.O. boxes from being able to claim to be local.
“We don't want the fly-by-nights. When the fly-by-nights leave town, we'll start accepting new applicants,” Haworth said.
Builders from Edmond, Norman, even Tulsa, he said, have come to Moore to rebuild — and they're welcome if members of the Oklahoma State Home Builders Association, with its insurance requirements and grievance process. Haworth advised people to avoid doing business with any builder not a member of the association. Approved builders are listed here: www.oshba.org/pages/tornadorelief.
Crout said he didn't expect to see much rebuilding for another month or two. He said the first building permit issued for a rebuild came just this week.
So the increase in building permits the first half of the year owes nothing to rebuilding from the tornadoes. Oklahoma City, Edmond, Midwest City, Moore and Norman issued 2,661 single-family permits through June, 16.4 percent more than in the first half of 2012, according to the Central Oklahoma Home Builders Association.
Boom yet to come
Tornado-related sales are hard to detect in recent stats from the Oklahoma City Metro Association of Realtors, although Keith Taggart, president, said the increased demand is showing up in contract negotiations.
“Multiple offers have increased substantially,” and sale prices are going over asking prices, said Taggart, managing broker for Coldwell Banker Select's office in Mustang.
Realtors handled the sale of 1,803 houses in June, up 5.9 percent from June 2012, and the median price of $151,250 was an increase of 10 percent, the Realtors reported.
Taggart said pending sales show the coming post-tornado boom: At the end of June, 2,214 houses were under contract to sell, compared with 1,661 the same time last summer — a 33.3-percent increase.