The design and construction outlook for Multifamily Housing is again moving in the right direction, according to the PSMJ Resources’ Quarterly Market Forecast (QMF).
After a first quarter that saw the multifamily market suffer its lowest level of proposal activity in nearly a decade, PSMJ’s quarterly survey of architecture, engineering, and construction firm executives reported a +7% net plus/minus index (NPMI), up from the -2% recorded in the first three months of the year.
PSMJ’s NPMI expresses the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease. The QMF has proven to be a solid predictor of market health for the AEC industry since its inception in 2003. A consistent group of over 300 firm leaders participate regularly, with 171 contributing to the most recent survey.
As unimpressive as multifamily’s second quarter NPMI is—particularly considering that it experienced seven consecutive years of quarterly NPMIs above 40% through the end of 2019—the upturn is significant. The market’s negative NPMI in the first quarter was its lowest since it capped 11 consecutive quarters of negative proposal opportunity growth with a -5% in the third quarter of 2010.
Multifamily Housing Market Proposal Activity – 1Q08 to 2Q20 (NPMI)
The multifamily rebound was part of overall improving conditions for most of the Housing market. Even with the COVID-19 crisis slowing down the overall economy, housing’s rebound may be driven in part by historically low mortgage interest rates.
Housing’s NPMI increased from -19% in the first quarter to +2% in the second quarter, making it one of only four major markets with a positive NPMI among the 12 assessed in PSMJ’s QMF. Water/wastewater (20%), energy/utilities (15%) and healthcare (10%) were the others.
Among the firms that work in the multifamily sector, 31% said that proposal activity increased in the second quarter, while 24% said it decreased. The remainder said the market was relatively flat.
PSMJ Senior Principal David Burstein, PE, AECPM, predicts that single-family housing will rebound faster and stronger than multifamily in the coming months.
“Overall, the housing market is very strong,” says Burstein. “For many years, this market has been dominated by multifamily housing as people moved into cities. Recently, that trend has reversed. Single-family housing in suburbs is now stronger than multifamily housing in large cities. This is even more true for new condominiums than for new apartment rental housing.”
Among housing’s other submarkets, single-family properties (individual) saw its NPMI improve from -31% in the first quarter to +9 in the second quarters.
Single-family developments remained well into the negative at -12%, but that was up from -28%.
Senior/assisted living ticked up from -3% to -1%, while condominiums continued to struggle (-28% in Q1 to -26% in Q2).
Multifamily Housing | Jun 1, 2023
Income-based electric bills spark debate on whether they would harm or hurt EV and heat pump adoption
Starting in 2024, the electric bills of most Californians could be based not only on how much power they use, but also on how much money they make. Those who have higher incomes would pay more; those with lower incomes would see their electric bills decline - a concept known as income-based electric bills.
Multifamily Housing | May 30, 2023
Boston’s new stretch code requires new multifamily structures to meet Passive House building requirements
Phius certifications are expected to become more common as states and cities boost green building standards. The City of Boston recently adopted Massachusetts’s so-called opt-in building code, a set of sustainability standards that goes beyond the standard state code.
Multifamily Housing | May 30, 2023
Milhaus, Gershman Partners, and Citimark close on $70 million multifamily development in Indy
Versa will bring 233 studio and one- and two-bedroom apartments to Indianapolis's $271 million, Class-A Broad Ripple Village development enterprise.
Multifamily Housing | May 23, 2023
One out of three office buildings in largest U.S. cities are suitable for residential conversion
Roughly one in three office buildings in the largest U.S. cities are well suited to be converted to multifamily residential properties, according to a study by global real estate firm Avison Young. Some 6,206 buildings across 10 U.S. cities present viable opportunities for conversion to residential use.
Multifamily Housing | May 19, 2023
Biden administration beefs up energy efficiency standards on new federally funded housing
The Biden Administration recently moved to require more stringent energy efficiency standards on federally funded housing projects. Developers building homes with taxpayer funds will have to construct to the International Energy Conservation Code (IECC) 2021 for low-density housing and American Society of Heating, Refrigerating and Air-Conditioning Engineers ASHRAE 90.1 for multi-family projects.
Sponsored | Multifamily Housing | May 19, 2023
Shear Wall Selection for Wood-Framed Buildings
From wall bracing to FTAO, there are many ways to secure the walls of a building. Learn how to evaluate which method is best for a project.
Sponsored | Multifamily Housing | May 17, 2023
The Key To Multifamily Access Control — Consistent Resident Experiences
Explore the challenges of multifamily access control and discover the key to consistent user experiences with a resident-first approach and open platforms.
Affordable Housing | May 17, 2023
Affordable housing advocates push for community-owned homes over investment properties
Panelists participating in a recent webinar hosted by the Urban Institute discussed various actions that could help alleviate the nation’s affordable housing crisis. Among the possible remedies: inclusionary zoning policies, various reforms to increase local affordable housing stock, and fees on new development to offset the impact on public infrastructure.
Multifamily Housing | May 16, 2023
Legislators aim to make office-to-housing conversions easier
Lawmakers around the country are looking for ways to spur conversions of office space to residential use.cSuch projects come with challenges such as inadequate plumbing, not enough exterior-facing windows, and footprints that don’t easily lend themselves to residential use. These conditions raise the cost for developers.