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 13, 2020
5 must reads for the AEC industry today: August 13, 2020
Apple Central World opens in Bangkok and 7-Eleven to buy Speedway.
Market Data | Aug 12, 2020
6 must reads for the AEC industry today: August 12, 2020
UC Davis's new dining commons and the pandemic is revolutionizing healthcare benefits.
Market Data | Aug 11, 2020
6 must reads for the AEC industry today: August 11, 2020
Elevators can be a 100% touch-free experience and the construction industry adds 20,000 employees in July.
Market Data | Aug 10, 2020
Dodge Momentum Index increases in July
This month’s increase in the Dodge Momentum Index was the first in all of 2020.
Market Data | Aug 10, 2020
Construction industry adds 20,000 employees in July but nonresidential employment dips
Association warns skid will worsen without new relief.
Market Data | Aug 10, 2020
5 must reads for the AEC industry today: August 10, 2020
Private student housing owners reap the benefits as campus housing de-densifies and race for COVID vaccine boosts real estate in life sciences hubs.
Market Data | Aug 7, 2020
6 must reads for the AEC industry today: August 7, 2020
BD+C's 2020 Color Trends Report and HMC releases COVID-19 Campus Reboot Guide for Prek-12 schools.
Market Data | Aug 6, 2020
6 must reads for the AEC industry today: August 6, 2020
Oklahoma State's new North Academic Building and can smart buildings outsmart coronavirus?
Market Data | Aug 5, 2020
6 must reads for the AEC industry today: August 5, 2020
San Jose's new tallest tower and Virginia is the first state to adopt COVID-19 worker safety rules.
Market Data | Aug 4, 2020
7 must reads for the AEC industry today: August 4, 2020
Construction spending decreases for fourth consecutive month and 100% affordable housing development breaks ground in Mountain View.