South Bay construction takes a hit

August 20, 2008 12:12:17 AM PDT
There is news about the Bay Area housing market and whether it's good or bad, depends on whether you're buying or selling. With home sales down ABC7 takes a look at just how badly the construction business is suffering.

The construction business is hurting, especially in the new homes sector. In fact the number of housing permits issued last month dropped 17 percent. Construction sites are a part of most city landscapes, but finding a brand new home going up, isn't as easy to spot anymore.

According to the Department of Commerce, new home construction nationwide, hit a 17 year low last month. Builders broke ground on 965,000 homes in July. That's down from over a million new construction sites in June.

"We had up and downs but not this far, this is the worst year we had," said Esse Ghavami, from EMP Construction.

Construction business dropped 50 percent for Esse Ghavami. As the owner of EMP Construction, in Santa Clara, he used to spend his days on project sites.

Now he spends most of his time at his Chatanoga Restaurant, a place that was supposed to simply be a side investment. Now it's Ghavami's main source of income. He also finds odd jobs for his construction crew here.

"Last year I paint the restaurant three times, three different colors. To keep my workers," said Esse Ghavami.

"The economy has affected us," said Zeno Azarchehr, at Gotfloor.com.

Fewer construction jobs mean less work for contractors. Business at GotFloor.com fell 25 percent in one year. The owner had to move his floor installment store closer to a busier street, to get more foot traffic.

"Now I have to do advertising, I wasn't doing as much before so I have to depend on that, so that means more money out of my pocket," said Azarchehr.

Big box home improvement stores, like Home Depot are also losing business. It announced on Tuesday, second quarter profits fell 24 percent. Like Home Depot, GotFloors.com is also bracing itself for dismal sales for the rest of the year.

Another problem that's looming for a lot of these business owners is winter. It's always a slower time for construction, but this year should be even worse.


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