Nearly all multifamily developers are being hampered by materials shortages and price increases, reports the eighth edition of the National Multifamily Housing Council (NMHC) Construction Survey from a poll taken August 25th to September 17th.
Ninety-eight percent of respondents reported being impacted by a lack of materials, the highest share recorded since the survey began while 100% of respondents reported price increases in materials for the second consecutive round.
The average firm experienced a 13% price increase over the past three months for its most impacted materials. However, lumber costs were down by 24% on average over the last three months after the surge during the pandemic.
A record 93% of multifamily developer respondents reported construction delays. Of those, 83% reported experiencing delays in both starts and permitting,
The delays were blamed on permitting, entitlement, and professional services by 91% of those experiencing time problems.
Economic uncertainty and projects being economically unfeasible dropped as factors by 13% and 27%, respectively, since the last survey done May 17th to June 1st of this year .
The delays underline deep challenges that developers continue to face almost a year and a half after the onset of the pandemic, said Doug Bibby, NMHC President.
With labor shortages a complaint by 88% of the respondents compared to 41% points in round seven and up 52% points from round six, Bibby stressed steps must be taken to increase the supply of construction workers across the country as well as taking moves to bring material costs “back to reasonable levels.”
Higher wages were helping to ease the shortage for nearly a third of the multifamily developers.
Among firms that reported raising compensation in order to attract or retain laborers, the average compensation increase was 12%.
In the earlier poll from May to June, developers reported delays to projects not being economically feasible increased to 56% compared to 30% in the survey done February 10 – March 5.
The May to June poll also saw 69% of multifamily developers claim deals being priced up 5% or more, which was nearly five times as many as the 14% of respondents during February and March.
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