After 9 years of consecutive and undisputed growth in the sector, proposal activity in the US market of multifamily housing dropped in the first quarter of 2020. According to the Quarterly Market Forecast (QMF) survey of architecture, engineering, and construction (A/E/C) firms, the lastly reported drop within the negative results is the first dip for the sector of Multifamily housing since the third quarter of 2010. What seems to be the reason behind the drop in one of the strongest sectors in construction.
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Strong Performers Falling Under Uncertainty of COVID-19 Crisis
Multifamily housing is one of the strongest performers among 58 submarkets, or sectors of construction, measured in PSM. Back in the last quarter of 2019, the sector of Multifamily housing marked 54% in Net Plus/Minus Index, being among the top performers for the period. The same metrics showed a drop by -2% in the first quarter of 2020, while analysts claim that the number one reason for the slip is the overall uncertainty arriving with the COVID-19 fallout.
Despite the Drop, Multifamily Construction Still a Top Performer Among Housing Submarkets
Despite the first-quarter drop in 2020 in the sector of Multifamily housing, this submarket was still a top performer among other Housing sectors. In the first quarter, the sector of Condominiums, Single-family developments, and Single-family properties were some of the 12 worst-performing submarkets of construction. The sector of Condominiums fell by -28%, developments dropped by -28% as well, and Single-family properties flattened by -31%. Before the crisis involving COVID-19, analysts of the industry had bright predictions for Multifamily housing, forecasting strong growth that the submarket had seen in the previous 9 consecutive years. However, the sector and the entire industry had to face some new challenges brought by the crisis, which is how numerous markets and submarkets are suffering.
