Updated:
Original:

The State of Things June 2021

In the residential housing market, we have strong demand, weak supply, and chaotic work schedules due to the improvisations required by COVID-19 and supply chain disruption. How do you explain to a client that their new sofa cushions are on backorder due to the oil refinery hackers?

According to the U.S. Census Bureau Construction Spending Survey, revised May 2021, the value of residential construction put in place for April was $729,238,000. For a look at the history of this line item, I had to go back to 2006 to get even close to the current value; that year in the month of April, residential construction put in place was $650,388,000. To describe the residential housing market now, I’ll use a word that I’ve grown tired of during the pandemic: unprecedented.

The same report from the U.S. Census pegs the value of private nonresidential construction at $451,441,000 for April. While this is a slight decrease from the same month last year, it’s still higher than any other month prior to 2017. The high-water mark for this line was in November 2019 when nonresidential construction put in place was $501,449,000.

Construction spending in the education segment, a relative sweet spot for traditional building professionals, has held steady, albeit with campus projects put on hold during the pandemic. The recent high-water mark here was in December 2020 with $88,470,000. April 2021 was $83,311,000.

Graham Wyatt, FAIA, who manages the education practice for RAMSA, told me recently that “work for academic institutions has come back strongly despite much press about a new world of virtual learning. What my university clients are saying is that “hybrid” learning is no longer the future, it’s here now. This means some education is delivered online and some face-to-face. The in-person part is all about discussion, collaboration, and teamwork…not lecturing. This requires different types of classrooms, labs, and spaces which support this type of learning.”

My college admissions contacts reiterate Graham’s point; they report a record number of college applicants at the top schools which have a traditional campus in attractive college towns and a strong sense of place. But college spaces are being reconfigured.

The Neighborhood Homes Investment Act would support the rehabilitation of housing in distressed areas and the restoration of historic buildings. 

The Neighborhood Homes Investment Act would support the rehabilitation of housing in distressed areas and the restoration of historic buildings. 

About other institutional historic restoration and renovation, Jill Gotthelf FAIA, FAPT, principal at Modern Ruins/Walter Sedovic Architects says, “They may have scaled back from early 2020, but historic theaters, museums, churches, and synagogues continue to be good stewards of their historic buildings, especially with projects necessary for public safety and comfort, post-pandemic.” Jill points to new legislation through the EDA Public Works programs District Funding which could help boost Main Street revitalization in the commercial construction market sector.

There is a confluence of health, social, and environmental issues which have an impact on the traditional building market. It seems like everywhere we look there is a problem we can help solve. Jill Gotthelf talks about the affordable housing crisis in urban areas and tells me “there are many RFPs for affordable housing coming out. Current bills in the house include increases in the Historic Tax Credit which makes relief more accessible for small historic projects. These tax credits have more appeal for private developers to work with non-profits."

Jill is advocating the passage of two more pieces of important legislation: The Neighborhood Homes Investment Act, which would spur the rehabilitation of housing in distressed neighborhoods and the Civilian Climate Corp initiative, a jobs bill which could kick start more preservation trades training.

Ms. Gotthelf’s perspective is a welcome antidote to what a high-end residential real estate broker told me recently about the market in Washington DC, “home buyers must be all cash, no contingency, and be willing to bid 50% over the asking price. They’ll be competing with seven other all-cash bidders.”

I think I’ll just… reupholster my couch. 

Buying Guide Spotlight

Perma-Chink products

Perma-Chink

Perma-Chink Systems Products is the building industry’s trusted partner for the tightest, greenest, and most impeccably finished wood homes in the world. It is premier provider of cutting-edge premium wood stains and finishes, log home sealants, and maintenance and wood restoration products.

Related Articles

gardenpete

The State of Things

Magazine subscriptions, newsstand sales, website traffic, online education attendance, e-cast open rates, social media engagement are all up as much as 100% year-over-year.

NAHB Housing by type graph

The State of Things, Part 2

According to both the NAHB and AIA, our industry had its best year since 2007, which was the "peak of the market." Most forecasts predict an even better year in 2017.