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A Little Correction on the Construction Wage Story September 5, 2017

Posted by geoff in News.

I hate to have to correct folks who tend conservative/libertarian, but fair’s fair. I don’t hesitate to hammer on liberal errors and I hate to see inaccurate information passed around the dextrosphere. So here we go:

This post by DC Whispers would normally set my heart aflutter. Just look at the title:

This may be true, but you can’t tell from the information provided in the post.

First, construction costs were raised by 30%, and since labor constitutes 60% of construction costs, it is likely that labor costs went up by something like 30%, but you can’t tell. It could be that other costs doubled (roughly) and labor stayed the same.

The second point is that the source they cite (Residential Strategies) seems to focus on the market in the Dallas-Fort Worth area, not national costs. DFW is likely to feel the effects of an immigration crackdown more quickly and profoundly than the rest of the country. It may be a trend-setter for the rest of the nation, or maybe not. But if DFW sees a 30% increase in construction wages, many other areas are likely to see a lower increase.

So while Trump’s immigration crackdown may be having a positive effect on middle-class construction wages (I certainly hope that’s true), and it’s not impossible for a 30% increase in construction wages to have happened, I don’t think there’s enough information cited to prove it.


1. Cathy - September 5, 2017

Good for you, Geoff.

When are peeps gonna stop basing their results on limited sampling and correlations alone?!!

* never *

Anybody who took statistics in university was supposed to learn that:
“Correlation does not automatically constitute a causal relationship.”

Texas has some of the hottest markets for residential real estate right now — and stats show DFW ‘IS’ currently the hottest market in Texas.

A bit of inside poop… As part of the largest network of real estate investors here in Texas and DFW specifically, we ‘are’ having a more difficult time finding reasonably priced and reliable contractors to do our fix and flips and buy and holds. Not impossible, but we have to work harder to find and keep them.

I don’t mind all this. I think it will all level out eventually. And you know me — I’m a ‘rule of law’ girl.

2. Cathy - September 5, 2017

…and for the record, I wanna add that I don’t know of any real estate investors who look for illegals as cheaper labor to work on their renovations. I’m certain they are out there, but the network that we are connected with kinda frowns on that.

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