Proposal activity for Multifamily-for-Rent (Apartments) and Condominium properties continued to exceed historic norms, with Condos achieving its highest level since PSMJ Resources began tracking submarkets in its Quarterly Market Forecast (QMF) of A/E/C firm leaders. Apartments, which recorded its third-highest NPMI of 71% in the 1st Quarter, repeated that score in the 2nd Quarter.
While 61% of respondents working in the Condo market reported an increase in proposal activity from the 1st Quarter to the 2nd Quarter, only 2% saw a decline. This net plus/minus index (NPMI) of 59% exceeded the previous high for Condos of 49% achieved in the 4th Quarter of 2014.
Second-quarter proposal activity for Apartments continued to outpace all other submarkets in the Housing sector and all but one (Product Manufacturing) of the 58 submarkets measured across all construction sectors. A full three-quarters of the A/E/C firm leaders responding to PSMJ’s quarterly survey said that Multifamily proposal opportunities grew in the 2nd Quarter compared with only 4% who reported a decline.
The NPMI expresses the difference between the percentage of PSMJ member 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 12 major markets served by the A/E/C industry since its inception in 2003, and for 58 submarkets since 2006.
The record-high NPMI for Apartments was 76% in the 1st Quarter of 2018, followed by 72% in the 1st Quarter of 2012 and 71% in the 1st Quarters of 2015 and 2021.
PSMJ Senior Principal David Burstein, PE, AECPM, says the future strength of the housing market relies heavily on the ability of state and federal government agencies to invest adequately in infrastructure. “The condo and apartment markets have been on fire for several years, resulting in a lot of new multifamily housing,” says Burstein. “This is now creating traffic and other congestion problems which, if not dealt with by the cognizant government agencies, may cause the multifamily market to slow down in the coming quarters. So it is important to continue tracking the PSMJ NPMI over the next few quarters to spot any emerging slowdowns.”
The Assisted/Independent Senior Living submarket leveled off to an NPMI of 49%, down 10 NPMI percentage points from the 1st Quarter. While 51% of respondents reported an increase in proposal activity, only 2% saw a drop and the remaining 47% said opportunities were flat.
The two other Housing submarkets measured in the PSMJ survey remained strong. The Housing Subdivision market recorded an NPMI of 68% for a second straight month, as not a single respondent in the 2nd Quarter survey reported a decline in proposal opportunities. Single-Family Homes also repeated its 1st Quarter NPMI; the 51% index score once again tied for its second-highest level since the inception of submarket data tracking in the QMF.
PSMJ Resources, a consulting and publishing company dedicated to the A/E/C industry, has conducted its Quarterly Market Forecast for more than 18 years. It includes data on 12 major markets and 58 submarkets served by A/E/C firms. For more information, go to https://www.psmj.com/surveys/quarterly-market-forecast-2.
Related Stories
Market Data | Aug 24, 2021
July construction employment lags pre-pandemic peak in 36 states
Delta variant of coronavirus threatens to hold down further gains.
Market Data | Aug 17, 2021
Demand for design activity continues to expand
The ABI score for July was 54.6.
Market Data | Aug 12, 2021
Steep rise in producer prices for construction materials and services continues in July.
The producer price index for new nonresidential construction rose 4.4% over the past 12 months.
Market Data | Aug 6, 2021
Construction industry adds 11,000 jobs in July
Nonresidential sector trails overall recovery.
Market Data | Aug 2, 2021
Nonresidential construction spending falls again in June
The fall was driven by a big drop in funding for highway and street construction and other public work.
Market Data | Jul 29, 2021
Outlook for construction spending improves with the upturn in the economy
The strongest design sector performers for the remainder of this year are expected to be health care facilities.
Market Data | Jul 29, 2021
Construction employment lags or matches pre-pandemic level in 101 metro areas despite housing boom
Eighty metro areas had lower construction employment in June 2021 than February 2020.
Market Data | Jul 28, 2021
Marriott has the largest construction pipeline of U.S. franchise companies in Q2‘21
472 new hotels with 59,034 rooms opened across the United States during the first half of 2021.
Market Data | Jul 27, 2021
New York leads the U.S. hotel construction pipeline at the close of Q2‘21
Many hotel owners, developers, and management groups have used the operational downtime, caused by COVID-19’s impact on operating performance, as an opportunity to upgrade and renovate their hotels and/or redefine their hotels with a brand conversion.
Market Data | Jul 26, 2021
U.S. construction pipeline continues along the road to recovery
During the first and second quarters of 2021, the U.S. opened 472 new hotels with 59,034 rooms.
