The New York NY metropolitan area, at $16.1 billion during the first half of 2018, held onto its number one ranking and comprised 16% of the U.S. commercial and multifamily total, helped by a 44% jump compared to a year ago. During the previous two years, the New York NY share of the U.S. total had slipped to 14% in 2016 and 13% in 2017, after seeing its share reach a peak at 19% back in 2015. Other markets in the top ten showing growth during the first half of 2018 were Washington DC ($5.0 billion), up 23%; Miami FL ($4.9 billion), up 34%; Boston MA ($3.7 billion), up 56%; and Seattle WA ($3.2 billion), up 7%. Of these markets, the top four (New York, Washington DC, Miami, and Boston) showed renewed growth after the decreased activity reported for the full year 2017, while Seattle was able to maintain the upward track present last year. Metropolitan areas showing decreased activity for commercial and multifamily construction starts during the first half of 2018 were Dallas-Ft. Worth TX ($3.4 billion), down 23%; Los Angeles CA ($2.9 billion), down 38%; San Francisco CA ($2.8 billion), down 38%; Chicago IL ($2.7 billion), down 37%; and Atlanta GA ($2.0 billion), down 43%.
For those markets ranked 11 through 20, the six that registered first half 2018 gains were Austin TX ($1.8 billion), up 15%; Kansas City MO ($1.7 billion), up 52%; Orlando FL ($1.6 billion), up 4%; Phoenix AZ ($1.6 billion), up 19%; Minneapolis-St. Paul MN ($1.3 billion), up 34%; and Portland OR ($1.1 billion), up 15%. The four posting declines were Houston TX ($1.9 billion), down 13%; Philadelphia PA ($1.7 billion), down 13%; Denver CO ($1.6 billion), down 25%; and San Jose CA ($1.1 billion), down 37%.
The commercial and multifamily total is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. At the U.S. level, the 1% drop for the commercial and multifamily total during the first half of 2018 reflected an 8% retreat for commercial building that was essentially balanced by an 8% increase for multifamily housing.
"Multifamily housing has proven to be surprisingly resilient so far during 2018, following its 8% decline in dollar terms at the U.S. level that was reported for the full year 2017," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "With apartment vacancy rates beginning to edge upward on a year-over-year basis, banks had been taking a more cautious stance towards lending for multifamily projects. Yet, after some loss of momentum during 2017, several factors appear to be providing near-term support for multifamily housing. The U.S. economy is currently moving at a healthy clip, with steady job growth bringing new workers into the labor force. The demand for multifamily housing by millennials remains strong, given their desire to live in downtown areas while the increasing price of a single family home and diminished tax benefits may be dissuading some from making the transition to single family home ownership. As shown by this year's surveys of bank lending officers conducted by the Federal Reserve, the extent of bank tightening for multifamily construction loans is not as widespread as a year ago."
Top 20 Metropolitan Areas - First Half 2018
| |||||||
Commercial Building and Multifamily Housing Construction Starts
| |||||||
Millions of Dollars, January-June Totals
|
Percent
| ||||||
Change
| |||||||
2016
|
2017
|
2018
|
2018/2017
| ||||
1.
|
New York-Northern New Jersey-Long Island, NY-NJ-PA
|
13,417
|
11,189
|
16,144
|
+44
| ||
2.
|
Washington-Arlington-Alexandria, DC-VA-MD-WV
|
3,734
|
4,044
|
4,982
|
+23
| ||
3.
|
Miami-Fort Lauderdale-Miami Beach, FL
|
3,879
|
3,687
|
4,932
|
+34
| ||
4.
|
Boston-Cambridge-Quincy, MA-NH
|
3,368
|
2,376
|
3,701
|
+56
| ||
5.
|
Dallas-Fort Worth-Arlington, TX
|
4,628
|
4,426
|
3,414
|
-23
| ||
6.
|
Seattle-Tacoma-Bellevue, WA
|
2,547
|
2,972
|
3,168
|
+7
| ||
7.
|
Los Angeles-Long Beach-Santa Ana, CA
|
5,203
|
4,731
|
2,921
|
-38
| ||
8.
|
San Francisco-Oakland-Fremont, CA
|
3,102
|
4,569
|
2,837
|
-38
| ||
9.
|
Chicago-Naperville-Joliet, IL-IN-WI
|
3,977
|
4,228
|
2,665
|
-37
| ||
10.
|
Atlanta-Sandy Springs-Marietta, GA
|
2,905
|
3,480
|
1,984
|
-43
| ||
11.
|
Houston-Baytown-Sugar Land, TX
|
1,792
|
2,176
|
1,890
|
-13
| ||
12.
|
Austin-Round Rock, TX
|
1,319
|
1,605
|
1,847
|
+15
| ||
13.
|
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
|
1,564
|
1,990
|
1,739
|
-13
| ||
14.
|
Kansas City, MO-KS
|
1,109
|
1,140
|
1,730
|
+52
| ||
15.
|
Orlando, FL
|
1,144
|
1,563
|
1,624
|
+4
| ||
16.
|
Denver-Aurora, CO
|
2,216
|
2,086
|
1,557
|
-25
| ||
17.
|
Phoenix-Mesa-Scottsdale, AZ
|
1,366
|
1,311
|
1,556
|
+19
| ||
18.
|
Minneapolis-St. Paul-Bloomington, MN-WI
|
881
|
951
|
1,276
|
+34
| ||
19.
|
Portland-Vancouver-Beaverton, OR-WA
|
904
|
983
|
1,132
|
+15
| ||
20.
|
San Jose-Sunnyvale-Santa Clara, CA
|
1,360
|
1,691
|
1,059
|
-37
| ||
Total U.S.
|
99,836
|
102,925
|
101,413
|
-1
| |||
Source: Dodge Data & Analytics
| |||||||
The Miami FL metropolitan area climbed 34% during the first half of 2018, with the boost coming from a 95% jump for multifamily housing while commercial building settled back 6%. During 2017, the Miami FL market had fallen 20% for the full year after its 25% increase in 2016. The $2.8 billion of multifamily projects that reached groundbreaking during the first half of 2018 topped the $2.5 billion reported for the first half of 2016, which contributed to the record high $5.5 billion of multifamily construction starts reported for the full year 2016. There were eight multifamily projects valued each at $100 million or more that reached groundbreaking during the first half of 2018, led by the $300 million One River Point condominium tower and the $213 million Aston Martin condominium residences, both in Miami, and the $180 million Estates at Acqualina condominium tower in Sunny Isles Beach. On the commercial side, store construction increased 16%, lifted by the $271 million Bal Harbour Shops expansion in Bal Harbour. Gains were also reported for commercial garages (up 31%) and warehouses (up 15%), but declines were reported for office buildings (down 9%) and hotels (down 46%). The decline for hotel construction was relative to a strong first half of 2017, which included the $575 million hotel portion of the $900 million Seminole Hard Rock Hotel and Casino in Hollywood FL.
About Dodge Data & Analytics: Dodge Data & Analytics is North America's leading provider of analytics and software-based workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities and execute on those opportunities for enhanced business performance. Whether it's on a local, regional or national level, Dodge makes the hidden obvious, empowering its clients to better understand their markets, uncover key relationships, size growth opportunities, and pursue those opportunities with success. The company's construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its 100-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. To learn more, visit www.construction.com.