The December 2024 Quarterly Survey of Construction & Development Activity (Construction Quarterly Survey for short) was conducted from December 2 – 13, 2024 and received 27 responses from leading multifamily construction and development firms.
The Construction Quarterly Survey began in March 2022, and in June 2024 the survey was revised to better capture current trends and the most relevant indicators in the multifamily construction market. Historical data from each of our surveys, both before and after revision, can be found as downloadable spreadsheets on our website.
Construction Indicators 4Q 2024 (% of Respondents)
Construction
78%
Experienced
Delays
Pricing
81%
Saw Deals
Repriced
Logistics
0%
Reported Labor Less Available
Logistics
30%
Reported Labor More Available
Inputs
30%
Experienced Materials Delays
In the December 2024 Construction Quarterly Survey, 78% of respondents reported experiencing construction delays over the last three months, the first quarter of increased reported delays after five consecutive quarters of decline (up from 52% in September, 70% in June and 81% in March). Construction delays are still prominent and to be expected in the current environment.
Of those experiencing delays, 24% of respondents reported that, independently, the Northeast (e.g., NY, Boston, etc.), the Rockies (e.g., Denver, etc.) and the Southeast (e.g., Atlanta, Charlotte, Orlando, etc.) were regions where delays were particularly acute.
Ninety-five percent of those experiencing delays reported delays in permitting, the highest value recorded since the survey’s inception in March 2022, and up from 87% in September and 77% in June. There were zero respondents to this question who reported no delays in permitting. Reported delays in starts also increased to 90% of respondents, from 80% in September and 84% in June.
The most frequently cited cause for delays in starts over the past three months was permitting, entitlement and professional services at 68% of respondents (up from 50% last quarter), with economic feasibility (58% of respondents, from 67% last quarter) and economic uncertainty (42% of respondents, from 92% last quarter) still frequently cited causes, although less so than last quarter. Those attributing delays in starts to the availability of construction financing decreased for the fourth consecutive quarter to 37% of respondents.
The share of respondents citing staffing shortages as a cause of delayed starts (11%) has remained small for the last five quarters—from 0% in September, 4% in June and 0% in March—while the share attributing delays to materials sourcing and deliveries was again 0%.
Over the past three months, how long, on average, have municipalities reported it would take before you receive building permits?
| December 2024 | September 2024 | June 2024 | |
|---|---|---|---|
| Up to 2 Months | 11% | 3% | 7% |
| 3-4 Months | 37% | 17% | 23% |
| 5-6 Months | 11% | 31% | 34% |
| 7-8 Months | 11% | 14% | 11% |
| 9+ Months | 19% | 21% | 18% |
| N/A | 11% | 14% | 7% |
Nearly three-quarters of respondents (74%) this quarter reported additional project requirements unrelated to actual construction being imposed on their jurisdictions, up from 55% of respondents in September. Those who reported additional project requirements highlighted offsite infrastructure improvements and bonding and LOC requirements.
While the share of respondents who reported deals repriced down held constant at 59%, the share reporting deals repriced up fell to 22% (from 28% in September), and the share who saw no repricing of deals rose to 15% (from 7% in September and 18% in June).
Those who saw deals repriced, in either direction, reported an average 0% change, down from +4% last quarter.
In addition to questions about the prior three months, we asked respondents a set of forward-looking questions around expected market conditions over the next 3 months, 3-6 months and 6-12 months.
Overwhelmingly, respondents expressed the expectation that overall multifamily construction market conditions will remain the same (81% of respondents; up from 68% last quarter) in the short term. Both the share of respondents who thought conditions will improve (i.e., that it will become easier to build) over the next three months (8%; from 18% last quarter) and decline over the next three months (8%; from 14% last quarter) decreased from September.
While the majority of respondents (52%) thought conditions would also remain the same over the next 3-6 months, they still expressed confidence in conditions improving in the long term—73% of respondents (78% last quarter) expect conditions will improve over the next 6-12 months, while 8% of respondents (11% last quarter) expect conditions will deteriorate.
The majority of respondents (69%; up from 57% in September) expect that over the next three months construction costs for multifamily will remain the same. Much like overall, short-term market expectations, both the share of respondents who thought construction costs will increase (8%; from 11% last quarter) and the share who thought costs will decrease (23%; from 32% last quarter) was lower than in September.
Respondents were split almost evenly regarding their expectation for construction costs over the next 3-6 months: 30% of respondents thought costs will increase; 37% of respondents thought costs will decrease; 33% of respondents thought costs will remain the same. That said, 54% of respondents expressed that they expect construction costs will increase over the next 6-12 months, compared with 31% who think they will decrease and 12% who think they will remain the same.
What are your expectations for the overall multifamily construction market over the next 3 months, 3-6 months, and 6-12 months?
| I expect conditions will improve (i.e., easier to build) | I expect conditions will decline | I expect conditions will remain the same | Don’t know / N/A | |
|---|---|---|---|---|
| Over the next 3 months | 8% | 8% | 81% | 4% |
| 3-6 months from now | 30% | 19% | 52% | 0% |
| 6-12 months from now | 73% | 8% | 15% | 4% |
The majority of respondents, although less so than last quarter, said they expect both the availability of equity financing (69%; down from 81% in September) and debt financing (74%; down from 82% in September) to remain about the same over the next three months.
Whereas 19% of respondents expect equity to become more available over the next three months, with 12% thinking it will become less available, 26% of respondents expect debt financing to become more available over that period, while no respondents said they expect it to become less available.
Considering the next 3-6 months, 41% of respondents (from 36% last quarter) thought equity financing will become more available, while 19% thought less (up from 4% less quarter). A similar share of respondents (42%) expect debt will become more available over that period; however, no respondents reported they expect less available debt financing. Fifty-eight percent of respondents said they thought debt financing conditions would remain the same.
As they did in both June and September, the majority of respondents expect more availability over the next 6-12 months—69% of respondents regarding equity financing and 77% regarding debt. While only 4% of respondents said they expect less available debt financing, the share of respondents who said they expect less available equity financing over the next 6-12 months rose to 19% (7% in September).
While respondents again largely indicated an expectation of unchanged conditions in the near term, they also indicated confidence in a more favorable financing environment in the medium to long term, perhaps more so regarding debt than equity.
What are your expectations for the availability of equity financing for multifamily construction over the next 3 months, 3-6 months, and 6-12 months?
| I expect equity to become more available | I expect equity to become less available | I expect availability to remain about the same | Don’t know / N/A | |
|---|---|---|---|---|
| Over the next 3 months | 19% | 12% | 69% | 0% |
| 3-6 months from now | 41% | 19% | 41% | 0% |
| 6-12 months from now | 69% | 19% | 12% | 0% |
Respondents reported that labor conditions were largely the same as last quarter, with more of an indication of continued loosening than tightening.
A majority of respondents (59%) reported construction labor availability to be roughly the same as it was three months ago. While the share of respondents who thought labor more available than three months ago roughly maintained at 30% (from 28% in September and 36% in June), there were no respondents who reported labor to be less available (10% in September and 7% in June).
Thirty percent of respondents reported experiencing delays with specific materials—up from 21% last quarter—while 56% reported experiencing no specific material delays (from 62% last quarter). Of those who reported specific material delays, heavy emphasis was placed on delays related to electrical gear.
Lastly, 30% of respondents reported that they had experienced an increase in subcontractor defaults over the past three months (from 28% in September), compared to 52% of respondents who did not (55% in September) and 19% who said the question was not applicable to them.
How does the availability of construction labor compare to three months ago?
| December 2024 | September 2024 | June 2024 | |
|---|---|---|---|
| More available | 30% | 28% | 36% |
| Less available | 0% | 10% | 7% |
| Roughly the same | 59% | 55% | 52% |
| N/A | 11% | 7% | 5% |
