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 | Mar 23, 2016
AIA: Modest expansion for Architecture Billings Index
Business conditions softening most in Midwest in recent months.
Retail Centers | Mar 16, 2016
Food and technology will help tomorrow’s malls survive, says CallisonRTKL
CallisonRTKL foresees future retail centers as hubs with live/work/play components.
Market Data | Mar 6, 2016
Real estate execs measure success by how well they manage ‘talent,’ costs, and growth
A new CBRE survey finds more companies leaning toward “smarter” workspaces.
Market Data | Mar 1, 2016
ABC: Nonresidential spending regains momentum in January
Nonresidential construction spending expanded 2.5% on a monthly basis and 12.3% on a yearly basis, totaling $701.9 billion. Spending increased in January in 10 of 16 nonresidential construction sectors.
Market Data | Mar 1, 2016
Leopardo releases 2016 Construction Economics Report
This year’s report shows that spending in 2015 reached the highest level since the Great Recession. Total spending on U.S. construction grew 10.5% to $1.1 trillion, the largest year-over-year gain since 2007.
Market Data | Feb 26, 2016
JLL upbeat about construction through 2016
Its latest report cautions about ongoing cost increases related to finding skilled laborers.
Market Data | Feb 17, 2016
AIA reports slight contraction in Architecture Billings Index
Multifamily residential sector improving after sluggish 2015.
Market Data | Feb 11, 2016
AIA: Continued growth expected in nonresidential construction
The American Institute of Architects’ semi-annual Consensus Construction Forecast indicates a growth of 8% in construction spending in 2016, and 6.7% the following year.
Market Data | Feb 10, 2016
Nonresidential building starts and spending should see solid gains in 2016: Gilbane report
But finding skilled workers continues to be a problem and could inflate a project's costs.
Market Data | Feb 9, 2016
Cushman & Wakefield is bullish on U.S. economy and its property markets
Sees positive signs for construction and investment growth in warehouses, offices, and retail
