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).
Related Stories
| Dec 31, 2013
BD+C's top 10 stories of 2013
The world's tallest twisting tower and the rise of augmented reality technology in construction were among the 10 most popular articles posted on Building Design+Construction's website, BDCnetwork.com.
| Dec 27, 2013
$1 billion 'city within a city' development approved by Coachella, Calif., city council
The mega development includes 7,800 homes, a retail center, office space, and nearly 350 acres of open space.
| Dec 23, 2013
MBI commends start of module setting at B2, world's tallest modular building
The first modules have been set at B2 residential tower at Atlantic Yards in New York, set to become the tallest modular building in the world.
| Dec 20, 2013
Can energy hogs still be considered efficient buildings? Yes, say engineers at Buro Happold
A new tool from the engineering firm Buro Happold takes into account both energy and economic performance of buildings for a true measure of efficiency.
| Dec 13, 2013
Safe and sound: 10 solutions for fire and life safety
From a dual fire-CO detector to an aspiration-sensing fire alarm, BD+C editors present a roundup of new fire and life safety products and technologies.
| Dec 10, 2013
16 great solutions for architects, engineers, and contractors
From a crowd-funded smart shovel to a why-didn’t-someone-do-this-sooner scheme for managing traffic in public restrooms, these ideas are noteworthy for creative problem-solving. Here are some of the most intriguing innovations the BD+C community has brought to our attention this year.
| Dec 4, 2013
First look: Dubai's winning bid for World Expo 2020 [slideshow]
Dubai has been chosen as the site of the 2020 World Expo. HOK led the design team that developed the master plan for the Expo, which is expected to draw more than 25 million visitors from October 2020 through April 2021.
| Nov 27, 2013
Exclusive survey: Revenues increased at nearly half of AEC firms in 2013
Forty-six percent of the respondents to an exclusive BD+C survey of AEC professionals reported that revenues had increased this year compared to 2012, with another 24.2% saying cash flow had stayed the same.
| Nov 27, 2013
Wonder walls: 13 choices for the building envelope
BD+C editors present a roundup of the latest technologies and applications in exterior wall systems, from a tapered metal wall installation in Oklahoma to a textured precast concrete solution in North Carolina.
| Nov 26, 2013
Construction costs rise for 22nd straight month in November
Construction costs in North America rose for the 22nd consecutive month in November as labor costs continued to increase, amid growing industry concern over the tight availability of skilled workers.
