On the low end, the average cost is $301 per Top 10 Multifamily Projects Under Construction in Phoenix The onset of the COVID-19 pandemic in 2020 disrupted and transformed many aspects of everyday life. I expect contractors to pay 4 percent to 5 percent more in 2018 than in 2017, says Ken Simonson, chief economist with the Associated General Contractors of America. Web page addresses and e-mail addresses turn into links automatically. Rising Construction Costs, Fewer Jobs Projected About this report: The Mortenson Construction cost index is calculated quarterly by pricing a Choose a good contractor and your project will likely go smoothly, and, assuming your initial construction cost estimate was accurate, within budget. Southeast Markets for Multifamily Construction Negotiating with suppliers to get the best prices. Whether you want to get your hands dirty with a massive real estate development project, or you simply want to passively invest in apartment construction or rehabilitation, understanding multifamily construction costs is essential. When calculating apartment and multifamily construction costs, its also important to factor unusable and inaccessible space in. Fannie Mae forecasts that multifamily starts will increase by more than 14% in 2021 from the prior year, rising to 444,000 units. Just 23,200 condo units were started during the first half of 2021, down slightly from 23,600 units in the first half of 2020, according to Dodge Data & Analytics. Kannapolis, NC 28081 Upon completionscheduled for the end of 2021the gated community will encompass 408 one-, two- and three-bedroom units ranging between 586 and 1,397 square feet. The Opus Groups Paradise at P83 is another community taking shape in suburban Phoenix. Choose poorly, and you may find yourself well behind schedule and over budget-- which can be disastrous, especially since most multifamily development projects are financed with construction loans, which must generally be repaid within a limited timeline. Choosing the right contractor is essential, as theyre responsible for the day-to-day management of the construction site. Wealth Management is part of the Informa Connect Division of Informa PLC. 410.963.5379. October 7, 2022. Among the hard costs, the contractors fee is the highest. CCBG Architects designed the project, which encapsulates architectural elements from the golden age of train travel. Multifamily Loans,Multifamily Today, Prices grew 21 percent over the 12 months that ended in April 2021, according to the producer price index for net inputs to multifamily residential construction, excluding capital investment, labor, and imports. Opinions, analyses, estimates, forecasts, and other views of Fannie Maes Economic and Strategic Research (ESR) Group included in these materials should not be construed as indicating Fannie Maes business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. However, it is essential to have a manager that will supervise the property. multifamily building permits Rendering courtesy of High Street Residential. This estimate uses contractor fees of between $85 and $200 per square foot (psf) to provide a reasonable range between the most and least expensive markets, as the average contractor fee in the U.S. is about $125. I expect contractors to pay 4 percent to 5 percent more in 2018 than in The number of people employed in the construction industry rose 3.3 percent over the year that ended January 2018, according to the BLS. Local employment figures are from the Bureau of Labor Statistics. We use cookies to provide you with a great experience and to help our website run effectively. How this information affects Fannie Mae will depend on many factors. Also, the architects fee is the highest among all the soft costs. However, developers are not changing their plans too much. These costs increases have been taking a toll on multifamily and affordable housing developers. To get a good idea of what construction costs can look like for an entire apartment building, consider the table below. Construction Costs Although the ESR Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Pearl Biltmore. That increase in multifamily value means that households pay $119 a month more to rent a new apartment. Learn more about how Statista can support your business. This implies that contractors are hiring people from outside the industry, says Simonson. These responsibilities generally include: Bath fixtures, plumbing fixtures, plumbing rough-in and connection, Cabinets, countertops, and built-in appliances, HVAC and insulation for building and individual units, Permits, utility work, providing plans and specs for permitting, Lighting fixtures, painting, interior wall finish, Property excavation, foundation, piers, and flatwork.