OLATHE, Kan. - Nationally, the unemployment rate is bleak, hovering at more than 0 percent. It's more than eight times worse in the Kansas City housing market.
Foreclosures and the slowing economy are hitting Kansas City especially hard because of the type of builders located here.
Kansas City builders say a 9 percent unemployment rate would be thrilling. They say they're dealing with a 78 percent unemployment rate.
"We had 27,000 employees on our jobs and today we have 6,000. Where do those 21,000 people go? They are not trained to work as nurses or teachers," builder Bob Morrissey said.
Morrissey's been in business 33 years with
Arch Design Builders. He survived the housing slow-down in the early 1980's but says that was nothing compared to what he's seeing today.
"The strong builders we are the ones that are left and we are the ones fighting every day," Morrissey said.
Morrissey says 835 home builders lost their business, leaving just 145 left in Kansas City.
In Kansas City, there aren't huge corporate builders. Like Morrissey, the majority are small mom and pop shops.
With small shops, it's tough to hold onto the unsold inventory because banks are nervous.
"The banks have been increasing rates and putting pressure on builders to make principal reductions," Morrissey said.
Morrissey and the
Home Builders Association of Kansas City tried to address their concerns with a YouTube video, but say people still don't understand the crisis.
"The builders in K-C were not overbuilding. We were simply meeting the demand that was out there. The problem was the demand was falsely inflated by approving 15-20 percent of the buyers who were really not qualified," Morrissey said.
Bob says it's not him you should feel sorry for. He's worried about his subs.
"It's just brutal when you have to bring someone into your office and tell them they're losing their job and they just break down and cry. You see marriages that are destroyed over it as well," Morrissey said.
In the last three years, 21,000 Kansas City building jobs have vanished. Shamrock Cabinet shaved off hundreds from its payroll.
Office Manager Peggy Medina isn't managing cabinet orders these days. Instead, she's managing her employees' lives.
"Let me tell you there's a lot of tears and a lot of sadness. That's what it's like it's hard," Medina said through tears.
Medina hears stories of repossessed cars, foreclosures, and maxed out credit cards. The company tries to help when it can.
"A lot of employees now are struggling from paycheck to paycheck so they need to come to us for advances just to get through," Medina said.
To manage what's left, Shamrock cut hours and cut down the work week. "I'm afraid people are going to have to close their doors," Medina said.
The Home Builders Association is pushing for the government to extend the $8,000 homebuyer credit to everyone. It expires in November for first time homebuyers.
"It would immediately create 350,000 jobs and that's really the message. We need to get home building back up on its feet and employ people," Morrissey said.
