The American Senior Housing Association (ASHA) and leading national construction firm The Weitz Company have published a special issue brief illustrating Seniors Housing Construction Cost trends from 2004 to 2016, including the effect of the recession on Seniors Housing construction costs.
Through the mid-2000s, the market experienced higher than normal levels of construction-related inflation. As the financial crisis began in August 2008, markets began to falter and major financial institutions collapsed. The construction market was not insulated from these events and experienced its worst decline since The Great Depression.
Many companies went out of business, some survived but were, in many cases, half the size they were prior to the downturn. General contractors, subcontractors, designers, and engineering firms were all affected. The market as a whole experienced several years of declining prices through the end of 2010 before beginning to climb out of the trough.
As we fast forward to today, we see construction costs reaching pre-recession levels, with moderate to high inflation over the past five years. The current pace of construction, including increasing labor rates, leads us to expect this trend to continue in the near term.