The United States is experiencing a boom in construction during COVID-19. There is widespread agreement, support not just by data, but by the sight of cranes in our city skylines and dump trucks on our streets.
The potent mix of record-low interest rates along with a housing boom driven by people moving from cities to a home where they can more easily move about their community even with covid-19 restrictions has generated skyrocketing home sales. Lumber prices are up, as the framing materials for houses become more and more scarce.
Investment and construction are sure to follow in order to meet the demand.
But is panic-moving, as reported in the Atlantic, a herald of a new age, or a temporary remedy until the emergency passes?
The present is not the future
While some speculate that this boom means high times for construction companies, it is worth noting that the present is not the future.
Right now housing demands are increasing. As more and more homes are built, at some point the demand will be met.
Also, when a vaccination regimen is developed for the coronavirus, life will begin to return to normal. Current city restrictions keep many residents from leading a normal life. Normal routines like walking the dog and visiting favorite restaurants are more challenging, or impossible. It makes sense that suburban home sales are booming. But the arrival of a vaccine will potentially mean an influx back into the city.
After all, city life has lots of attractions, including entertainment, employment, and shopping options that are not available to the suburbanite or rural resident.
Besides, many municipalities already face a housing shortage. In the Cincinnati region, for instance, a recent study showed that there are as many as 40,000 fewer units than what it takes to meet the current demand.
The future of work
Cities face a different concern with the business space stock. Many companies and employees have learned how to exist almost entirely online.
This suggests that some companies that have farmed out all of their work to employees on broadband internet hookups at home might never return to their city offices after all. Companies can save money in parking fees, transportation costs, and all the other overhead that is related to having office space for dozens or hundreds of employees.
Sure, some businesses have found that there is unique value in having everyone together in the same space. This is especially true for creative and collaborative businesses, where sharing ideas in real time can lead to meaningful and industry-shattering innovations.
But many companies don’t operate that way. They currently house floors of employees who are now doing the work at home just fine, thank you. Or maybe even doing it better from home.
It is not possible to predict what the future holds. Who predicted a pandemic that would change how we all interact for more than half a year – so far?
You can be sure that building companies are going to ride this wave while it’s strong.