Currently Reading

Multifamily construction market remains strong heading into 2020

Multifamily Housing

Multifamily construction market remains strong heading into 2020

Fewer than one in 10 AEC firms doing multifamily work reported a decrease in proposal activity in Q3 2019, according to a PSMJ report.


By PSMJ Resources | November 7, 2019
Multifamily construction market remains strong heading into 2020

“Multifamily and Senior/Assisted Living have been two of the hottest markets for proposal activity for quite some time,” says PSMJ’s Greg Hart.

   

Multifamily housing will remain a robust market for A/E/C companies heading into 2020, according to the most recent results of PSMJ’s Quarterly Market Forecast (QMF) survey. For the third quarter of 2019, the survey found that less than 9% of the nearly 100 respondents doing multifamily work reported a decrease in proposal activity compared with the prior quarter, while more than 54% saw an increase.

The Multifamily market’s third quarter Net Plus/Minus Index (NPMI) of 46% marked the 31st consecutive quarter that the submarket exceeded an NPMI of 40%. The last time it was below that level was the third quarter of 2011.

PSMJ’s NPMI measures the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease, quarter over quarter. PSMJ has been using the QMF as a predictor of the A/E/C industry’s health since 2003, tracking 12 major markets and 58 submarkets every three months. The company chose proposal activity to gauge the industry’s long-term outlook because it is among the earliest stages of the project lifecycle. Approximately 200 firms participate in the survey each quarter.

 

The Senior and Assisted Living submarket also performed well with a third-quarter NPMI of 49%. Only 4 of the 86 responding firms working in the senior care submarket reported declining proposal activity. The Senior/Assisted Living market has also been a consistently stellar performer in the QMF. Its NPMI hasn’t dipped below 50% since the fourth quarter of 2012.

“Multifamily and Senior/Assisted Living have been two of the hottest markets for proposal activity for quite some time, not only among the Housing submarkets, but throughout all 58 submarkets,” says PSMJ’s Greg Hart, a consultant who also oversees the QMF.  “It is remarkable that both have seen such steady proposal growth for so long. Very few submarkets have been this consistently strong throughout the 16-year history of our survey.”

Housing (all submarkets) recorded an NPMI of 40% in the third quarter, a potentially noteworthy drop from the 59% recorded in the second quarter. After ranking the second-highest of the 12 major markets measured in the second quarter, Housing fell completely out of the top five in the third quarter. Transportation (49%) and Healthcare (46%) were tops among major markets.

Among the other Housing submarkets, Condominiums recorded a respectable NPMI of 24%, its sixth consecutive quarter in the mid-20% range. Individual single-family homes (15%) and subdivisions (8%) trailed the Housing field in the third quarter, falling markedly from 25% and 23%, respectively, in the second quarter. PSMJ Director and Senior Consultant Dave Burstein, PE, notes that the results are still positive, if potentially troubling in the longer term. He adds that lower mortgage interest rates on the horizon are likely to spur a rebound in the single-family and subdivision subsectors.

PSMJ Resources, Inc., based in Newton, Massachusetts, is a publishing, executive education, and advisory company dedicated to serving architecture, engineering and construction (A/E/C) organizations worldwide.

Related Stories

Multifamily Housing | Sep 1, 2021

Top 10 outdoor amenities at multifamily housing developments for 2021

Fire pits, lounge areas, and covered parking are the most common outdoor amenities at multifamily housing developments, according to new research from Multifamily Design+Construction.

Giants 400 | Aug 30, 2021

2021 Giants 400 Report: Ranking the largest architecture, engineering, and construction firms in the U.S.

The 2021 Giants 400 Report includes more than 130 rankings across 25 building sectors and specialty categories.

Multifamily Housing | Aug 27, 2021

ODA completes West Half, its first D.C. project

The project is located in Washington, D.C.’s Navy Yard.

Multifamily Housing | Aug 19, 2021

Multifamily emerges strong from the pandemic, with Yardi Matrix's Doug Ressler

Yardi Matrix's Doug Ressler discusses his firm's latest assessment of multifamily sales and rent growth for 2021.

Resiliency | Aug 19, 2021

White paper outlines cost-effective flood protection approaches for building owners

A new white paper from Walter P Moore offers an in-depth review of the flood protection process and proven approaches.

Senior Living Design | Aug 13, 2021

Designing with dignity for senior living, with Mike Rodebaugh, LEO A DALY

In this exclusive interview for HorizonTV, Mike Rodebaugh, AIA, Senior Living Sector Leader with LEO A DALY, describes how his firm applies "hospitality magic tricks" in its senior living communities, using design to lend dignity to residents, staff, and residents' families and social circles.

Multifamily Housing | Aug 10, 2021

A long-gestating apartment building finally gets underway in Long Beach, Calif.

Broadstone Promenade will add another piece to the city’s downtown lifestyle.

More In Category





Magazine Subscription
Subscribe

Get our Newsletters

Each day, our editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Subscribe

Follow BD+C: