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
| Mar 12, 2014
London grows up: 236 tall buildings to be added to skyline in coming decade, says think tank
The vast majority of high-rise projects in the works are residential towers, which could help tackle the city's housing crisis, according to a new report by New London Architecture.
| Mar 12, 2014
14 new ideas for doors and door hardware
From a high-tech classroom lockdown system to an impact-resistant wide-stile door line, BD+C editors present a collection of door and door hardware innovations.
| Feb 27, 2014
PocketCake lunches CPU designed for virtual reality simulations
The company's Virtual Reality Simulation Converter Assembly is three times more powerful than the average high-performance computer and allows for up to eight people to experience a virtual reality simulation at the same time.
| Feb 20, 2014
5 myths about cross laminated timber
A CLT expert clears up several common misconceptions and myths surrounding the use of wood as a building material.
| Feb 14, 2014
Must see: Developer stacks shipping containers atop grain silos to create student housing tower
Mill Junction will house up to 370 students and is supported by 50-year-old grain silos.
| Feb 14, 2014
Crowdsourced Placemaking: How people will help shape architecture
The rise of mobile devices and social media, coupled with the use of advanced survey tools and interactive mapping apps, has created a powerful conduit through which Building Teams can capture real-time data on the public. For the first time, the masses can have a real say in how the built environment around them is formed—that is, if Building Teams are willing to listen.
| Feb 5, 2014
7 towers that define the 'skinny skyscraper' boom [slideshow]
Recent advancements in structural design, combined with the loosening of density and zoning requirements, has opened the door for the so-called "superslim skyscraper."
| Feb 4, 2014
Must see: Student housing complex made with recycled shipping containers
Architect Christian Salvati's new structure is just the first step in bringing shipping container construction to New Haven, Conn.
| Jan 29, 2014
Historic church will be part of new condo building in D.C.
Sorg Architects unveiled a design scheme for 40 condos in a six-story building, which will wrap around an existing historic church, and will itself contain four residential units.
| Jan 28, 2014
First Look: BIG's Honeycomb building for Bahamas resort [slideshow]
BIG + HKS + MDA have unveiled the design for the new Honeycomb building and adjacent plaza in The Bahamas – a 175,000-sf residential facility with a private pool on each balcony.
