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Started By
Message
Private Developers Scrap More Construction Projects in May than in any Month on Record
Posted on 6/9/25 at 10:04 am
Posted on 6/9/25 at 10:04 am
LINK
quote:
“Abandonment activity has continued to rise, reaching its highest reading in over a year,” said Bell. “While public sector abandonment activity remains within historic levels, private sector abandonments have reached multi-year highs.”
Bell pointed to high interest rates and shifting market conditions as key factors reducing project viability. He said those pressures continue to erode developer confidence.
4
Posted on 6/9/25 at 10:06 am to the808bass
Is this another way to say that ICE is taking away our cheap labor?
Posted on 6/9/25 at 10:10 am to armtackledawg
quote:
Is this another way to say that ICE is taking away our cheap labor?
No, it's another way of saying that "high interest rates" are killing all housing and business builds. The Fed is playing politics.
Posted on 6/9/25 at 10:12 am to armtackledawg
Another way of saying.. all the housing we thought we’d be needing for illegals will no longer be needed
Posted on 6/9/25 at 10:15 am to riccoar
quote:
No, it's another way of saying that "high interest rates" are killing all housing and business builds. The Fed is playing politics.
How so? The rates are never going down to the levels of 2020 in our lifetime.....maybe even ever.
At some point people and/or builders will have to adjust their price expectation.
Posted on 6/9/25 at 10:15 am to armtackledawg
quote:
Is this another way to say that ICE is taking away our cheap labor?
Naw. I think it's about our general economic wellbeing.
Posted on 6/9/25 at 10:34 am to boogiewoogie1978
quote:
At some point people and/or builders will have to adjust their price expectation.
While true, if they are operating under a construction loan and haven't locked in long term financing on a project, there really is not a way for them to adjust to the price expectation on a current project...
Posted on 6/9/25 at 10:39 am to boogiewoogie1978
quote:
How so? The rates are never going down to the levels of 2020 in our lifetime.....maybe even ever.
It'll go down for the next democrat president.
Posted on 6/9/25 at 10:41 am to SlowFlowPro
quote:
Naw. I think it's about our general economic wellbeing
Stick to cheap divorces please.
Posted on 6/9/25 at 10:41 am to riccoar
quote:
No, it's another way of saying that "high interest rates" are killing all housing and business builds. The Fed is playing politics.
Yes. It is the responsibility of the fed to back developers over the American people and the stability of the economy.
These are not even high rates historically, but because you think 2-3 % APR was nice despite being there artificially, then we should forsake controlling inflation and bring back artificially low interest rates.
This post was edited on 6/9/25 at 10:56 am
Posted on 6/9/25 at 10:42 am to the808bass
High interest rates, potentially raised material costs and a tumultuous labor market are sapping the confidence of prospective owners and developers.
Posted on 6/9/25 at 10:46 am to The Maj
quote:
While true, if they are operating under a construction loan and haven't locked in long term financing on a project, there really is not a way for them to adjust to the price expectation on a current project...
This is the risk inherent in doing business, especially business in an industry that relies to heavily on financing continuously. RE is both highly profitable and highly risky, which is why it's so profitable in the good times (and the bad times are so devastating)
We have just grown to become so accustomed to government, especially fedgov, protecting RE and bailing it out that we've forgotten the bad times happen as much as the good.
Posted on 6/9/25 at 10:49 am to SlowFlowPro
quote:
risk inherent in doing business,
Absolutely, however my response was in relation to the interest rates and developers having to get accustomed to doing business in a higher cost environment... This is why they would abandon a project because it is cheaper for them to walk away than it is to finish it...
They will be back doing business at 7% as long as someone is wanting new projects.... Almost impossible to go from 2% to 7% on a major project...
Posted on 6/9/25 at 11:00 am to The Maj
quote:
They will be back doing business at 7% as long as someone is wanting new projects.... Almost impossible to go from 2% to 7% on a major project...
Well, seeing as they had no problem reaping tons of money off the low interest rates, just like the average American, they can a hit when the economy has to shift.
Lots of people have it happen to them, now RE pieces of shite can take the hit after they ripped off plenty of Americans.
Posted on 6/9/25 at 11:02 am to riccoar
quote:
No, it's another way of saying that "high interest rates"
And flip flopping politicians.
People will wait for stability.
Posted on 6/9/25 at 11:05 am to the808bass
I know it's not popular, but I wish ICE was targeting more criminals. They're picking up guys walking out of church and at jobsites. Low hanging fruit.
White and black people aren't coming back to construction. You'll all see that soon but we gotta wait for it to roll downhill.
White and black people aren't coming back to construction. You'll all see that soon but we gotta wait for it to roll downhill.
Posted on 6/9/25 at 11:08 am to Giantkiller
quote:
White and black people aren't coming back to construction. You'll all see that soon but we gotta wait for it to roll downhill.
They have to pivot to an entirely unrelated policy/issue (welfare) to try to make that work.
We could just end welfare now and it would deal with the illegal immigrant crisis naturally without all the drama. The Americans we'd get off welfare to do these jobs would be of such poor quality the wages would go way down
Posted on 6/9/25 at 11:10 am to Giantkiller
quote:
White and black people aren't coming back to construction.
There were shortages prior to the current issue.
Thats why I laugh at the "bring back mfg" folks. If you do, it will require mass automation or mass immigration.
Posted on 6/9/25 at 11:18 am to RogerTheShrubber
There’s shortages for every skilled job.
Teachers
Nurses
Engineers
Architects
It’s not limited to construction.
Teachers
Nurses
Engineers
Architects
It’s not limited to construction.
Posted on 6/9/25 at 11:35 am to RogerTheShrubber
quote:
And flip flopping politicians.
I don’t think this is much of it, honestly. That might be slowing projects on the front end. It’s not really a driving force on the back end.
The abandonment is being driven primarily (in my estimation) by a softening economy. We are probably finally reaching the end of Covid money working its way through the system and piper-paying is on the schedule.
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