The effects of Covid-19 have been felt in almost all aspects of the economy, and the real estate industry is no exception; new construction had fallen significantly from its highs in the first half of 2020, especially in some of the largest markets around the country. However, there have been some bright spots amid this subdued overall trend, with four cities in particular experiencing a sharp increase in the number of new homes being built.
San Francisco, San Jose, Seattle, and Denver are all seeing rises in the number of new homes being built, and they are doing so despite significant headwinds coming from the Covid recession. In San Francisco, for instance, new construction hit an eight year high in 2020, with an 8% year-over-year increase in the number of newly-built homes relative to 2019. Meanwhile, the number of starts in San Jose saw a similarly impressive 8.7% jump from its previous year's figures, indicating that the city is still moving forward with its development plans despite the current obstacles. Seattle and Denver have also been successful in bucking the pervasive trend of decreased construction activity, registering increases of 5.3% and 4.2%, respectively, from one year to the next.
While the exact reasons for these increases may differ from city to city, it appears that a combination of both economic factors and government initiatives are helping to drive up building activity in these four metropolitan areas. For starters, the relatively strong economies that all these cities enjoy - particularly when compared with other parts of the country - are likely providing a positive backdrop for construction projects. Furthermore, local government initiatives have likely played a role as well; in San Francisco, for instance, the City's “Blueprint to Unite Housing and Jobs” plan is helping to spur development of multi-family properties.
On top of this, certain cities also benefit from population growth, which can help to fuel a stronger demand for housing. This likely explains why the construction boom has been particularly pronounced in cities like Seattle and Denver, both of which boast strong populations and are considered to be attractive destinations for new home buyers. All in all, while the national housing market may be struggling from a lack of new construction, it appears that four of the nation's largest cities are still finding ways to expand their development efforts and make progress amid the Covid-19 recession.
In conclusion, four of America's largest cities - San Francisco, San Jose, Seattle, and Denver - have all seen increases in new home construction despite overall stagnation across the nation due to the Covid-19 pandemic. This has likely been driven by a combination of factors, including relatively strong economies and government initiatives, as well as a general population growth in certain areas. Overall, this trend suggests that these four cities are doing their best to effectively navigate the numerous challenges posed by the recession and continue to offer housing options to prospective buyers.
This article was contributed on Nov 08, 2023