According to AGC, by the end of 2006 and the beginning of 2007,construction costs had slowed to a 3% growth rate. By the end of2007, and throughout 2008, they will be up to 6%.
These numbers were generated on a national basis, KennethSimonson, chief economist of the association tells GlobeSt.com."Prices tend to up in line between the regions so there is littlevariation from that perspective." However, he adds, in the DC area,the absolute level of prices may be higher because of the region'ssmall manufacturing base, which in turn generates higher thanaverage transportation costs.
It is not welcome news by developers and other builders,obviously. Simonson says local government agencies and schoolboards in particular are disappointed about the future impact theseprice increases will have on their budgets.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
