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
Multifamily Housing | Mar 23, 2015
Multifamily for Millennials: Understanding what Gen Yers want in apartment design
Authentic public spaces, pet-friendly options, and inviting, tech-focused lobbies are among the key ingredients to a successful multifamily rental development, writes BLT Architects’ Michael R. Ytterberg.
Multifamily Housing | Mar 18, 2015
Prefabricated skycubes proposed with 'elastic' living apartments inside
The interiors for each unit are designed using an elastic living concept, where different spaces are created by sliding on tracks.
Multifamily Housing | Mar 16, 2015
New Jersey Supreme Court puts control of affordable housing agency in the courts
The court said the state’s affordable housing agency had failed to do its job, and effectively transferred the agency's regulatory authority to lower courts.
High-rise Construction | Mar 16, 2015
Mexican Museum tower caught in turmoil to break ground this summer in San Francisco
Millennium Partners said it will break ground on the 53-story residential and museum tower while the lawsuits go through the appeals process.
Mixed-Use | Mar 13, 2015
Dubai announces mega waterfront development Aladdin City
Planned on 4,000 acres in the Dubai Creek area, the towers will be covered in gold lattice and connected via air-conditioned bridges.
High-rise Construction | Mar 12, 2015
Developers confirm Renzo Piano’s contribution in Sydney harbor overhaul
If the entire development is approved, One Sydney Harbour will be Piano’s second project in Australia.
Multifamily Housing | Mar 12, 2015
Multifamily construction has been a boon to L.A.’s economy
A new study finds that nearly one-quarter of Los Angeles’ population lived in rental homes and apartments in 2013, a number that undoubtedly has increased since.
Modular Building | Mar 10, 2015
Must see: 57-story modular skyscraper was completed in 19 days
After erecting the mega prefab tower in Changsha, China, modular builder BSB stated, “three floors in a day is China’s new normal.”
Multifamily Housing | Mar 10, 2015
Developers bullish about multifamily market for third consecutive quarter
After increasing steadily over the past several years, multifamily production has now reached a healthy, sustainable level, according to NAHB Chief Economist David Crowe.
Multifamily Housing | Mar 10, 2015
A loft project in Dallas evolves into a high rise for both affluent and artistic customers
Atelier | Flora Lofts will be built on one of this city’s last choice undeveloped lots.
