Springtime, a season which starts cold and then we spring forward with daylight savings time. As we enter a new season, we naturally look forward, anticipate what is to come, and look at our accomplishments during the first quarter.
What were your expectations three months ago as you started the New Year and you set your goals, budgets and plans for 2017? Have you been able to keep on track with what you set as the path for yourself professionally? What were your successes? Where did you fall short? Where did you exceed the goals? This is a good time to take stock of where you are as you begin the second quarter.
As we look back at the first quarter of 2018 we see a new tax law to digest, threats of trade wars and a stock market which is becoming more volatile. The political front is no less volatile as we see Congress trying to address a budget and keeping the government running, protect the Dreamers and sort through changes within Trump’s White House.
The forecast for ongoing growth seems to be holding so far for the next year. Architects continue to be busy working on new projects for homeowners and developers. There seems to be a general consensus that we will see continued growth and builder confidence is high. Many feel positive that decreased regulation, tax reform and economic growth will continue and make 2018 more of the same for our industry. There are mixed feelings on whether it will be a good thing or it could be overwhelming if Boston or Somerville becomes Amazon’s second headquarters. Officials are staying mum on the meetings they have with Amazon. We do know that Amazon will add 2000 jobs to Boston in any event.
The architects who work for some of the national developers are creating new designs for homes, apartments and communities which bodes well for us all. These national developers are investing money in new designs, getting approvals for a variety of new developments and working to update their offerings to appeal to both millennials and boomers who seem to be creating a strong market for housing. In fact millennials seem to be increasing their home buying into 2018.
Locally in Boston and the surrounding towns we are seeing development pressures as the center of the city values continue to climb, pricing out many in the housing market. The demand for better affordability has resulted in the urban areas ringing Boston experiencing many new projects proposed and approved. The neighborhoods of Boston such as Dorchester, Allston/Brighton/East Boston, Hyde Park and even Mattapan are now experiencing growth with new housing and mixed use developments, sometimes even with an office component being proposed and built.
Cities such as Quincy, Chelsea, Medford and Malden have become hot markets. As these new developments come on line and add to the housing options for people another trend has surfaced. The rents for projects are level or even slightly declining. The plan in Boston has always been to increase supply and reduce pressure on rents and it seems to be working. There is much talk among developers that maybe it is time to slow the pace of new luxury apartment complexes and look to other development options. Our governor has now realized that Boston can’t solve the housing shortage and affordability alone and is working with towns and cities close to Boston to identify opportunities.
Another trend we see is downtown suburbs coming on as strong development areas. The market demand is for expanded restaurants and services along with housing within walking distance to public transportation. These appeal to older empty nesters who don’t want to leave the town where they have roots but wish to experience some of the benefits of urban living. These developments seem to be both rental and condominium projects.
Overall things seem to continue to be upbeat and positive for 2018 with favorable demographics, continued household formations, expanded markets and maturing of the millennials, our industry should see continued growth for this year at least but no one is predicting what 2019 will bring.
David O’Sullivan, AIA, is the president of O’Sullivan Architects, Inc., Reading, Mass.