Commercial Construction Rebound Due to New Multifamily Construction
New data show major rebound in both commercial and residential construction led almost entirely by multifamily and single family development.
Developers and builders started construction on the highest number of single family homes and apartments since July 2008. Multifamily rose 10% in October 2012 to an annualized rate of 285,000 units. Single family building application permits fell 2.7 percent in October to 866,000 after a 12percent rise in September. Still though, that’s the highest rate in four years.
Apartment starts continue to ramp up to a level double that of 2012. Architectural firms are billing at a rate not seen for several years for multifamily design services.
“Apartment developers aren’t going to slow down anytime soon,” said Erica Champion, senior real estate economist with CoStar Group’s Property & Portfolio Research (PPR) division, who presented the report with Luis Mejia, director of research/multifamily, and real estate economist Francis Yuen. “Next year will be the first year of supply additions at historically normal levels since 2009. So, the ‘reprieve’ in supply has come to an end.”
Although, there are still clouds ahead until something is done regarding the ‘fiscal cliff’ (I’m so sick of hearing/reading that term), but no question we’ve turned the corner and boom times are here again for the construction industry.