South Florida construction starts plummet again in May

Developers are still holding off on starting new construction projects

South Florida developers are still holding off on starting new construction projects in the wake of the coronavirus pandemic, according to a new report.

New construction starts in South Florida declined 25 percent in May to $558.8 million, down from $749.4 million in May 2019, according to Dodge Data & Analytics. Nonresidential construction fell 35 percent, year-over-year, to $269.8 million, while residential construction fell 13 percent to $289 million, the report shows.

Nonresidential buildings include office, retail, hotels, warehouses, manufacturing,
educational, healthcare, religious, government and recreational. Residential buildings include single-family and multifamily housing.

The drop off wasn’t quite as sharp as in the last two months. In April, total construction starts dropped 33 percent to $684.4 million, down from $1.03 billion in April 2019. In March, new construction starts fell 53 percent, year-over-year, to $561 million.

Construction was designated an essential business by the state of Florida and allowed to continue during the pandemic. Yet, contractors and subcontractors still reported challenges, such as rising material costs and difficulties with obtaining supplies produced in China. Some contractors said they had to find new suppliers since businesses such as marble slab companies were deemed non-essential and were required to shut their doors.

Other real estate projects had to stop construction temporarily for not following health guidelines. Two large Miami Beach projects were ordered to suspend construction in early April after failing to comply with CDC guidelines.

The drop in construction starts could also be due to a decline in new permits. Most cities in South Florida stopped processing new permit applications for one to two months, which could have an impact on contractors and developers by late August or early September.

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from The Real Deal Miami & Miami Florida Real Estate & Housing News | & Curbed Miami - All https://therealdeal.com/miami/2020/06/26/south-florida-construction-starts-plummet-again-in-may/
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