Housing Market Booms in Second Quarter

For many months now the shortage of houses for sale has been pushing home prices up at double-digit rates. That’s a good thing for homeowners but a bad thing for home buyers. Such conditions usually presage a boom in new construction, since the lack of inventory makes buyers look to other alternatives. For a number of reasons – little lot inventory, limited spec house financing, nervous builders, etc. – the new construction has not taken off. That seems to have changed in quarter two.

Housing starts for the first six months saw permits for more than 2,800 new units. That’s an 85% growth pace and a volume that hasn’t been seen since 2007. The trend suggests that 5,000 units will start by year’s end. Multi-family starts are up almost 159% over 2012. Single family starts are on pace to exceed 2,600 units, up 36% through June 30.

Total   Pittsburgh MSA 2012:2 919 596 1,515
Total   Pittsburgh MSA 2013:2 1,252 1,543 2,795
% Change 36.2% 158.9% 84.5%

Non-residential contracting reached $1 billion in the second quarter, bringing the year-to-date contracting totals to more than $1.4 billion. The pace of activity has quickened considerably as summer began and the forecast for the full year is for more than $3 billion total starts.

Indiana Regional Medical Center short-listed Alexander Building Systems, A. Martini & Co., Quandel and Turner for its $30 million addition. Massaro Corp. was selected as the general for the $4.5 million Armstrong Hospital emergency room.

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