Here at RMFP, we have been keeping a pulse on the new construction trends for 2019. New data is out predicting the current new construction trends for 2019. The 2019 Dodge Construction Outlook is estimating that the building industry will total around $808 billion which is pretty close to what 2018 yielded.
Since 2012 the building industry totals have increased around 14% each year. The main factors that dictate these totals are interest rates, material costs, and bank lending standards. Currently all of these are falling in line with each other producing the “perfect storm” for the building industry so to speak.
Of course, with any positive economic momentum there are always skeptics. Some analysts are saying that 2019 will be the rise before the fall. They are purporting that the U.S. economy is in for another recession due to new changes and regulations with the Federal Reserve affecting consumers in 2020.
Despite the government shut down, reports from January have surfaced and have exceeded the monthly estimate. So many in the building industry feel that this is a sign of things to come!
Single Family Housing
A projected future deceleration does not appear to be the case particularly for this category, as the demand for new construction, especially single-family homes has been steadily on the rise over the past decade.
Banks and other lending institutions are swinging back around to supporting buyers. This means realistic and affordable home loans with modest terms.
In the single-family housing category, a sleeper that may impact this year’s totals is the desire for pre-fabricated housing. Some people find the home building process to be daunting and time consuming and therefore want a quicker option. It can take 8 to 12 months on the short end for an entire home build to subside. Therefore, with people relocating to Colorado daily the search for turn key living is becoming very popular. With a pre-fab home, you are talking weeks not months.
There never seems to be enough multi-family housing especially here in Colorado. With hundreds of thousands of people migrating to the state, multi-family housing is popping up in every neighborhood around Denver.
Today, a lot of young adults are opting to rent instead of purchasing. Occupancies are few and far between across the state and multi-family housing fills up as quick as it is built.
Despite the fact that commercial building has slowed for smaller independent and private companies, hotels and warehouse stores are on the rise.
The internet has slowed business for smaller companies meaning that they cannot financially support a physical location putting many of them out of business.
However, large warehouse stores that also have online shopping are able to keep up with the market changes while supporting ins store shoppers.
Furthermore, hotels are also being built one after the other. In Colorado they are being constructed in some odd places like industrial areas.
In addition to this a couple of wildcard trends that are poking out of the commercial building sector is the demand for libraries, amusement buildings (e.g. Aquariums), and museums.
No one really knows what 2019 will hold. However, with populations continuing to rise all over the nation the demand for housing appears to not be at any substantial risk.