Multifamily housing will remain a robust market for A/E/C companies heading into 2020, according to the most recent results of PSMJ’s Quarterly Market Forecast (QMF) survey. For the third quarter of 2019, the survey found that less than 9% of the nearly 100 respondents doing multifamily work reported a decrease in proposal activity compared with the prior quarter, while more than 54% saw an increase.
The Multifamily market’s third quarter Net Plus/Minus Index (NPMI) of 46% marked the 31st consecutive quarter that the submarket exceeded an NPMI of 40%. The last time it was below that level was the third quarter of 2011.
PSMJ’s NPMI measures the difference between the percentage of firms reporting an increase in proposal activity and those reporting a decrease, quarter over quarter. PSMJ has been using the QMF as a predictor of the A/E/C industry’s health since 2003, tracking 12 major markets and 58 submarkets every three months. The company chose proposal activity to gauge the industry’s long-term outlook because it is among the earliest stages of the project lifecycle. Approximately 200 firms participate in the survey each quarter.
The Senior and Assisted Living submarket also performed well with a third-quarter NPMI of 49%. Only 4 of the 86 responding firms working in the senior care submarket reported declining proposal activity. The Senior/Assisted Living market has also been a consistently stellar performer in the QMF. Its NPMI hasn’t dipped below 50% since the fourth quarter of 2012.
“Multifamily and Senior/Assisted Living have been two of the hottest markets for proposal activity for quite some time, not only among the Housing submarkets, but throughout all 58 submarkets,” says PSMJ’s Greg Hart, a consultant who also oversees the QMF. “It is remarkable that both have seen such steady proposal growth for so long. Very few submarkets have been this consistently strong throughout the 16-year history of our survey.”
Housing (all submarkets) recorded an NPMI of 40% in the third quarter, a potentially noteworthy drop from the 59% recorded in the second quarter. After ranking the second-highest of the 12 major markets measured in the second quarter, Housing fell completely out of the top five in the third quarter. Transportation (49%) and Healthcare (46%) were tops among major markets.
Among the other Housing submarkets, Condominiums recorded a respectable NPMI of 24%, its sixth consecutive quarter in the mid-20% range. Individual single-family homes (15%) and subdivisions (8%) trailed the Housing field in the third quarter, falling markedly from 25% and 23%, respectively, in the second quarter. PSMJ Director and Senior Consultant Dave Burstein, PE, notes that the results are still positive, if potentially troubling in the longer term. He adds that lower mortgage interest rates on the horizon are likely to spur a rebound in the single-family and subdivision subsectors.
PSMJ Resources, Inc., based in Newton, Massachusetts, is a publishing, executive education, and advisory company dedicated to serving architecture, engineering and construction (A/E/C) organizations worldwide.
Related Stories
Multifamily Housing | Sep 16, 2020
8 (more) noteworthy multifamily projects to debut in 2020
An office-to-apartment conversion in Clearwater, Fla., and a modular affordable housing community in Portland, Ore., highlight the latest multifamily developments to open this year.
Multifamily Housing | Sep 14, 2020
McShane Construction begins work on Gilbert, Ariz., multifamily development
Continental Properties is the project owner.
Multifamily Housing | Sep 10, 2020
COVID-19: How are you doing?
Multifamily seems to be one sector in the construction industry that’s holding its own during the pandemic.
Multifamily Housing | Sep 10, 2020
EV charging webinar to feature experts from Bozzuto, Irvine Company, and RCLCO - Wed., 9-16
EV charging webinar (9/16) to feature Bozzuto Development, The Irvine Company, RCLCO, and ChargePoint
Multifamily Housing | Sep 2, 2020
8 noteworthy multifamily projects to debut in 2020
Brooklyn's latest mega-development, Denizen Bushwick, and Related California’s apartment tower in San Francisco are among the notable multifamily projects to debut in the first half of 2020.
Multifamily Housing | Sep 2, 2020
New affordable housing in the Bronx is designed for both seniors and teens
Body Lawson Associates designed the project.
Giants 400 | Aug 28, 2020
2020 Giants 400 Report: Ranking the nation's largest architecture, engineering, and construction firms
The 2020 Giants 400 Report features more than 130 rankings across 25 building sectors and specialty categories.
Sponsored | | Aug 26, 2020
Healthy air systems have become the new “standard equipment.”
As home buyers demand healthy air systems, builders look to differentiate themselves with a “Healthy Home Builder” designation.
Coronavirus | Aug 25, 2020
Video: 5 building sectors to watch amid COVID-19
RCLCO's Brad Hunter reveals the winners and non-winners of the U.S. real estate market during the coronavirus pandemic.
Multifamily Housing | Aug 24, 2020
Portland’s zoning reform looks to boost the ‘missing middle’ of housing
The city council in Portland, Ore., recently approved the “Residential Infill Project” (RIP), a package of amendments to the city’s zoning code that legalizes up to four homes on nearly any residential lot and sharply limits building sizes.
