FROM THE FIELD

By Todd Setter, Market Development Representative
West Coast, Steel Framing Alliance

tsetter@steelframing.org

West Coast Developers Continue Building Midrise Projects
With very little activity in the single family housing market on the West Coast, most of the construction projects currently in development are in the mid-rise and multifamily segments. Since the sluggish housing market has also resulted in slow condominium sales, many developers are reevaluating their projects – with an eye toward diversifying their portfolios by adding apartment buildings to the mix.

The observed West Coast trend is consistent with the findings of a national survey conducted last year by the National Association of Home Builders (NAHB) Research Center. This study was conducted to determine how the soft housing market has impacted their operations, purchasing habits, material usage, and adjustment to homeowner attitudes in this buyer’s market. Many builders said they have simply changed their business operations in response to the soft market and increased competitive pressures. While most home builders will continue to build more homes as a means to generate more revenue, many are shifting from mainstream to specialty markets; from suburban to urban development; and from single-family to multi-family units.

Both these trends toward urban markets and the multifamily segments are favorable for steel framing. These types of construction projects and the demand for higher returns from the high cost of land increases the significance of such benefits as lower insurance costs, shorter construction cycles, and building codes that allow higher density construction with steel framing.

By changing strategies, developers continue to build, investors earn their profits, and the steel framing industry benefits from the increased demand for cold-formed steel and continued market growth.