As the economy continues to recover, certain aspects of the real estate market are slowly coming back to life. Amid improving conditions, the country’s most recovered metropolitan areas are suddenly experiencing a building boom following a few years of stagnant construction activity. Among the top metropolitan areas that are in the building boom mix are Los Angeles and San Diego.
According to Forbes and Dodge Data and Analytics, a national building information company, Los Angeles ranked fifth for the U.S. metropolitan area with the most construction starts from January through September of this year. San Diego also had an impressive showing, rounding out the list of top metropolitan areas in the 20th spot.
The study, which ranked metropolitan areas based largely off of how much money was spent on new construction in both the residential and commercial sectors, found that Los Angeles has thus far seen a 9 percent increase in construction starts. The measured area for the study included the greater metropolitan area of Los Angeles, including Long Beach and Santa Ana. From January to September the area saw more than $7.7 billion spent on construction starts, which is up from $7 billion in 2013. The largest project started in Los Angeles this year is the $261 million Grand Avenue Condominium development.
San Diego, which is an area that has been continually pressured by low inventory of homes, saw an even greater jump in new construction starts this year. The San Diego-Carlsbad-San Marcos metropolitan area was reported to have risen in construction starts by 30 percent to $3.2 billion this year. The largest project in this region was the $820 million Kaiser Permanente Central Hospital, while smaller home projects have been springing up throughout the area.
New Construction Starts Good For Economy
Forbes’ list consisted of metropolitan regions throughout the country, with Houston being the leader for new construction rates. This indicates that not only are the larger economic hubs making a comeback, but the country as a whole is looking at all around better conditions.
Forbes’ partner in the study, Dodge, reported that across the nation new construction was up 9 percent in 2013 at $535 billion. In 2014, Dodge predicts that the amount spent in construction will rise another 5 percent to $564 billion. The surge in new construction is not only aimed at bringing eager home owners a new batch of homes to choose from, but to create commercial and manufacturing facilities that can help the economy to grow even stronger in the future.
“The important shift is that non-residential building–which really had not shown any growth in 2012–began to show growth in 2013 and has been even stronger in 2014,” said Robert Murray, chief economist and vice president at Dodge, to Forbes. “But to clarify, a lot of that has to do with manufacturing.”
With an increasingly broad base of construction, the possibilities for growing metropolitan areas such as Los Angeles and San Diego are endless. If you are interested in luxury homes in Los Angeles, please give our team a call today.