For the 25 cities shown in the accompanying tables and graphs, the year-over-year increase in construction costs ranged from 4.2% to 4.6% for four relatively light-framed building categories. Specifically, the increases on average were +4.2% for a typical 3-story factory, +4.4% for an auto sales garage and an aircraft hangar and +4.6% for a warehouse, September 2007 versus September 2006.

Among the 25 cities studied, the highest year-over-year construction cost increases were recorded in Miami (+7.2% to +7.6%). Following Miami in the upper register of cost increases were St. Louis, New Orleans, Dallas, Washington and Philadelphia.

The city with the lowest year-over-year construction cost increases was Kansas City (+2.7% to +3.1%). Next in line at the bottom of the cost-increase listing were Detroit, Denver, Houston, Pittsburgh and Seattle.

Major urban centers in the middle of the pack were Los Angeles, New York, Atlanta, Chicago and San Francisco. As a point of interest, construction cost increases in San Diego are currently slightly outpacing the gains in the other two primary centers in the state.

Further north along the Pacific Coast, Seattle is experiencing one of the few healthy housing markets in the country, but this has not yet spilled over into construction cost increases in the non-residential sector.

As a final note, New York remained the highest construction cost city in the country in terms of actual dollars-per-square-feet, followed by San Francisco, Boston, Philadelphia, Chicago and Minneapolis. The list of lowest-cost cities, on a dollar-per-square-foot basis, is dominated by the southeast and southwest —; Dallas, Houston, Phoenix, Atlanta and Miami. Miami is still low-cost despite its large percentage gain.

For an analysis of the likely direction of future construction costs, please see Reed Construction Data’s Web story entitled, Materials Inflation Tame, but Set to Rise.

Member Comments