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
| Sep 13, 2013
Chicago latest U.S. city to mandate building energy benchmarking
The Windy City is the latest U.S. city to enact legislation that mandates building energy benchmarking and disclosure for owners of large commercial and residential buildings.
| Sep 13, 2013
Video: Arup offers tour of world's first algae-powered building
Dubbed BIQ house, the building features a bright green façade consisting of hollow glass panels filled with algae and water.
| Sep 11, 2013
BUILDINGChicago eShow Daily – Day 3 coverage
Day 3 coverage of the BUILDINGChicago/Greening the Heartland conference and expo, taking place this week at the Holiday Inn Chicago Mart Plaza.
| Sep 10, 2013
BUILDINGChicago eShow Daily – Day 2 coverage
The BD+C editorial team brings you this real-time coverage of day 2 of the BUILDINGChicago/Greening the Heartland conference and expo taking place this week at the Holiday Inn Chicago Mart Plaza.
| Sep 4, 2013
Smart building technology: Talking results at the BUILDINGChicago/ Greening the Heartland show
Recent advancements in technology are allowing owners to connect with facilities as never before, leveraging existing automation systems to achieve cost-effective energy improvements. This BUILDINGChicago presentation will feature Procter & Gamble’s smart building management program.
| Sep 3, 2013
Delinquency rate for commercial real estate loans at lowest level in three years
The delinquency rate for US commercial real estate loans in CMBS dropped for the third straight month to 8.38%. This represents a 10-basis-point drop since July's reading and a 175-basis-point improvement from a year ago.
| Aug 26, 2013
What you missed last week: Architecture billings up again; record year for hotel renovations; nation's most expensive real estate markets
BD+C's roundup of the top construction market news for the week of August 18 includes the latest architecture billings index from AIA and a BOMA study on the nation's most and least expensive commercial real estate markets.
| Aug 23, 2013
Mack Urban, West Coast real estate and development firm, formed from intercompany collaboration
Urban Partners, LLC, Harbor Urban, LLC, and Mack Real Estate Group, three leading full service real estate firms known for high quality urban infill development, today announced the formation of Mack Urban, LLC, a premier West Coast real estate investment and development company.
| Aug 22, 2013
Energy-efficient glazing technology [AIA Course]
This course discuses the latest technological advances in glazing, which make possible ever more efficient enclosures with ever greater glazed area.
| Aug 22, 2013
6 visionary strategies for local government projects
Civic projects in Boston, Las Vegas, Austin, and suburban Atlanta show that a ‘big vision’ can also be a spur to neighborhood revitalization. Here are six visionary strategies for local government projects.
