Latest Annual U.S. and Canadian City Housing Starts (Parts 3)

Article source: CMDGroup

The multi-family market is where the excitement is to be found in the U.S. and Canadian city housing starts markets.

Table 6 shows some strikingly large percentage gains in multi-family starts from 2014 to 2015, with New York (+109.6%) – already busting at the seams with high-rise towers – more than doubling its annual volume of groundbreakings.

Miami (+60.4%) and Dallas-Fort Worth (+54.4%) recorded year-over-year multi-unit starts increases that were ahead by more than half. While Miami has staged a nice recovery (to 16,000 units in 2015) in multi-unit starts since its disastrous level (only 1,600 units) in the Great Recession year of 2009, it still remains considerably below its 15-year previous best figure of 23,300 units in 2005.

Dallas, on the other hand, in 2015 (28,000 multi-family units) shot well past its prior most stellar year (18,400 units in 2008).

Boston (+42.5%), Los Angeles (+34.2%) and San Francisco (+30.5%), in 2015, had multi-family starts levels that were close to or better than one-third higher than in 2014.

San Francisco’s 2015 multi-unit starts (8,200) were about on a par with that city’s prior best (8,600 in 2006), while both Boston (10,400 units in 2015 versus 9,100 in 2005) and Los Angeles (25,200 in 2015 compared with 19,800 in 2006) were over-achievers.

Multi-unit starts have been progressing steeply higher for the past six years in a row in Los Angeles. Boston has recorded mainly sharp inclines over the most recent four years.

Among other major U.S. centers that don’t make it into the top dozen for population, Seattle’s multi-unit starts curve displays an impressively steep upward trajectory beginning in 2010.

Charlotte, since 2011, and Nashville, stepping out a year later in 2012, have also seen rocket-like climbs in their multi-family starts curves.

There are three U.S. cities that are still notably locked in the total housing-starts basement, relative to their historical performances – Chicago, Phoenix and Las Vegas.

Worst among these is Las Vegas, where there have been only minimal improvements in single- and multi-family starts over the past several years. Total new housing permits/starts in Las Vegas in 2015 (10,600 units) were just one-quarter as high as in the admittedly ‘bubble’ year of 2005 (39,200).

Washington, Philadelphia, St. Louis, Minneapolis-St. Paul and Tampa are other major U.S. cities where some single- or multi-family housing-start gains have been made since the debilitating credit crunch in 2008-2009, but there is still a great deal of ground to re-take.

In Canada, both Toronto (+61.5%) and Edmonton (+59.5%) recorded multi-family home starts in 2015 that exceeded 2014 levels by more than 50%.

With only an occasional correction, Toronto’s frenetic condo construction activity has been lighting up the skyline and contributing to the ambient background noise for an extended period now.

As for the outlook, the bargain-level price-point of the ‘loonie’ will continue to attract the attention of well-heeled foreign investors who are looking to diversify their real estate assets.

Edmonton’s surge in multi-family starts in 2015 was in defiance of the everyday bad news coming out of the province’s energy patch, concerning falling oil prices and the necessity for cost cutting to be realized through staffing reductions and drastic curtailments of capital spending.

Edmonton, as Alberta’s provincial capital, is a government town and therefore partly protected from the economic vagaries that are swirling around it, but 2016 will almost surely yield a decline in all forms of starts commensurate with what will also be happening in Calgary, where most oil extraction, exploration and field-servicing companies are headquartered.

Montreal’s annual multi-family starts have stayed in a commendably consistent range of 14,000 to 18,000 units over the past 12 years. Since 2004, upheaval elsewhere has caused nary a flicker of upset in that city’s high-rise residential construction market.

Tags: Alex Carrick, Canada, CMD, CMDGroup, Housing, market, multi-family, US

Category: CMD Group

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