The Sacramento Region is expanding, and Frayji Design Group, Inc., who serves the Sacramento area, , is poised to meet the planning, engineering and surveying needs for the development industry. In its Regional Housing Forecast held November 13, 2014, the North State Building Industry Association (BIA) predicted a generally optimistic view for housing construction in the coming years. All of the indicators for future growth show positive signs, however, the continued recovery is still mild. Conservative optimism represents the general sentiment of the industry, with an amalgamation of enthusiasm, caution, and speculation that required experienced care to navigate.
At the event, of which Frayji Design Group was a sponsor, the Building Industry Association heard from Sacramento State Business Professor and Economist Sanjay Varshney, who shared that the mood among consumers and the broader economic market in the region has improved markedly. His presentation detailed numerous economic indicators, such as job growth, home sales, building permit activity, lease rates and mortgage activity that show broader market trends. The feeling of consumer confidence in the greater Sacramento Region has seen a particular boost. The single biggest factor in that rise in sentiment – the Sacramento Kings being retained in a new Entertainment Complex. The result is favorable, yet qualified. “More people will buy homes,” Dr. Varshney surmised, but was quick to add, “The question is, will the economic centers follow?”
Greg Paquin of the Gregory Group likewise showed the encouraging growth in the local market, yet also raised questions about trends in the data. Careful analysis reveals that while the recovery looks real, the markets are not the same as before. Demographics are changing, with many new households formed being “non-traditional,” such as multi-generational. Home prices continue to rebound to the relief of the building industry, but that also means that home affordability is beginning to lessen. This will, in turn, result in an increased demand for lower end homes and higher density products. David Crowe, Chief Economist of the National Association of Home Builders concurs. Further, he adds, the prices of materials, labor and capital are rising, which will increase price pressure. Yet, the long term key is jobs. “Job growth creates household formation,” Dr. Crowe emphasizes. One additional important consideration: skilled workers entering the job market during the previous recession are still renting and unable to purchase new homes. As their employment outlook improves, they will start buying homes and further increase the demand for new, affordable housing.
The BIA report bodes well for the industry and Frayji Design Group, a civil engineer in Sacramento, in particular, but points to the need to carefully and efficiently navigate the current market with experienced engineering, planning and surveying professionals who know the local market dynamics. The Building Industry Association particularly named southwestern Placer County as continuing to outpace other Sacramento sub-markets for steady growth and buyer interest. Frayji Design Group is ideally suited to development in that area, and has unmatched connections to local governments and markets in the southwest Placer region.
Videos and pictures from the presentation can be viewed by clicking here.
