McGraw-Hill Predicts Some Multifamily Construction Increases in ’10
- Feb 18, 2010
Dees Stribling, Contributing Editor
New York–In recently released reports, McGraw-Hill Construction is predicting a more vigorous pace of construction starts for some property types in some parts of the country in 2010 than last year, including an increase in multifamily construction. One of the drivers for increased construction is economic stabilization due to the fading of the recession, but increased public expenditures are also a factor.
In California, one of the recession’s hardest-hit states, McGraw-Hill Construction is predicting a 21 percent increase in construction starts this year as compared with 2009, or about $42.7 billion all together for 2010. “This is a welcome change after four consecutive annual declines in construction starts,” the report notes.
Not quite everyone will share in the California increase, however. Multifamily starts are expected to rise 22 percent, while single-family home starts will be up 40 percent. But commercial property starts will continue to decline, by an estimated 11 percent in 2010, reflecting a continuing weak job market, sluggish tourism and excess industrial capacity.
Multifamily housing starts are predicted to rise in Texas as well, a total of 34 percent (single-family housing will be up 31 percent). Like California, Texas will not see an increase in commercial property starts, but the continuing decline won’t be as sharp, either–only 1 percent.
Florida will be a different story for multifamily construction in 2010, according to McGraw-Hill Construction. The remarkable affordability of housing in that state, at least when compared with the mid-2000s bubble years, will likely lead to the first increase in residential construction there since 2005.
But multifamily won’t benefit much from the demand. Floridians who can now buy their homes seem to prefer single-family houses. Multifamily construction starts in the state are expected to decline slightly, by about 1 percent, while single-family home starts will grow by 14 percent.
Both New York and Chicago are also predicted to see residential growth in 2010, with New York in particular making a comeback of 24 percent compared with last year (both in multifamily and single-family starts). Last year saw a 53 percent decline in residential starts in metro New York compared with 2008.