Editorial: What’s going on NOW!

Apr 11, 2013

Mark Zweig provides six directions on where the market is heading. Here’s a quick summary of where I see things going right now in the A/E business and the world at large: The housing recovery is well underway. In just about every market in the country the numbers are heading up in terms of volume of sales and sale prices. Some markets like San Francisco are already back to one-day sales. It’s happening big and it’s happening fast. Multifamily is really strong in growth markets and college towns. The biggest problem holding back the single family residential market is appraisers. They are scared to put too big a number down on paper after the last freefall in home prices. This is holding down values. College and U work is booming but will stall in the next three- to five years. Two reasons. College is getting too expensive and the economic case for its necessity is weakening. Too many graduates with $200K degrees are working at Starbucks and Burger King. Second reason is simple demographics. The college-aged population isn’t growing as quickly as it once was and will soon be going the other way. Colleges and universities are going to feel this shortly. Healthcare will be the single biggest, best vertical building market for years to come. There are a jillion reasons. Changing technology. Aging population. Pent-up demand. I could go on and on but healthcare is where I would be positioning my firm for some of what I do if I were in your business. Design-build is making major inroads into some non-traditional markets such as transportation. Look at Florida. It’s amazing. And the reason is simple. Cheaper and faster – and sometimes (but not always) better. Office space may look bad in the U.S. right now but it will recover. With companies such as Yahoo (check – it was either them or Google) announcing that they will no longer allow telecommuting because they want to be a real company, that’s a sign that the trend to tolerate telecommuting is over. Office space is booming in Asia. The amount of large spaces being built out and outfitted in China, Singapore, India, and elsewhere over there is staggering. And U.S. design firms are cashing in on this boom. They love U.S. architecture and interior design. I could go on. There’s so much I would like to comment on. But the bottom line is I’m out of space! Have a great week, All! Mark Zweig is the chairman and CEO of ZweigWhite. Contact him with questions or comments at mzweig@zweigwhite.com. This article first appeared in The Zweig Letter (ISSN 1068-1310) Issue # 1003 Originally published 4/15/2013. Copyright© 2013, ZweigWhite. All rights reserved.

About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.