Report: Construction Costs Drop; Financing Still a Bear
Construction in New York City has gotten a little cheaper, thanks to the weakened economy. The New York Building Congress released a report Wednesday that found hard construction costs, including labor, dropped 10 percent for offices and banks, and 9 percent for apartment construction between mid-2008 and mid-2009.
That counters a long-running trend in the industry, in which costs rose continuously for years. Between 2007 and 2008, for instance, hard costs in the city rose 8.2 percent.
The Building Congress, a trade group, expects those numbers to fall even further before the end of 2009. In its report, the Building Congress said it had been told by top New York officials that the number of contractor bids have also been lower. Other building experts also reported low numbers. The Engineering News-Record took prices from local and national construction costs, and estimated costs dropped a little over 1 percent in the city. Another survey of the New York metropolitan region says costs dropped 4 percent since January of this year.
While Building Congress President Richard Anderson said in a statement the moderate construction prices are encouraging, given the current economic situation, these drops probably won’t make a big difference in the short-term. He said that’s because private developers are having a hard time getting financing for new projects.