The State of Multifamily Construction
Higher construction and labor costs continue to challenge the housing industry, prompting newer strategies to build multifamily and student housing communities within budget and on schedule.
Since the apartment boom launched a few years ago, developers and builders have battled a lack in skilled labor. In the last couple of years, materials prices – namely lumber – have zoomed upward as construction demands increased.
Global trade of softwood lumber reached a 10-year high in 2015, and prices climbed to $338.70 per 1,000 board feet. This year, the U.S. has tapped more into the Canadian market, upping purchases 20 percent.
Prices actually stabilized in September, according to latest numbers from Bureau of Labor Statistics’ Producer Price Index. In August, prices jumped 1.5 percent but were down 1.4 percent in September.
Labor market starting to pick up pace
Labor has been another story. The recession in 2008 and fallout in construction is blamed for depleting skilled labor pools; many workers found other jobs and haven’t returned very quickly. Subsequently, labor prices have been tilting upward: Average hourly earnings of all construction employees has steadily increased, climbing 11 percent since 2012, based on wages reported in September to the Bureau Labor Statistics.
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