Pace of first-half homebuilding remains strong in Colorado Springs

By Rich Laden July 2, 2018 | updated 8 years ago

A crane lowers a truss onto a home under construction Monday in the Gold Hill Mesa development on Colorado Springs’ west side. RICH LADEN, THE GAZETTE

The pace of local homebuilding, which has shown no signs of a slowdown, now is on track to reach a 13-year high, a new report shows.

The Pikes Peak Regional Building Department issued 403 permits in June for construction of single-family homes in Colorado Springs and surrounding El Paso County, a 16.5 percent increase over the same month last year, according to a report released Monday by the agency.

For the first half of 2018, the Regional Building Department issued 2,181 single-family permits, up nearly 25 percent from the same period in 2017, the report shows.

The year-to-date number puts the Springs area on track to top the 4,000 mark in annual homebuilding permits, which would be the highest single-year total since 2005.

“For this year, if I were going to bet, I’d bet on 4,000-plus,” said Mark Long, owner of Vanguard Homes and last year’s board president of the Housing & Building Association of Colorado Springs.

Mike DeGrant, this year’s HBA board president, said the organization didn’t expect building permits to reach 4,000 when it assembled its 2018 budget. Now, he said, the strength of the market makes the mark “very attainable.”

“It’s not out of the question to at least make 4,000 and just beyond,” DeGrant said.

Homebuilders have credited a surging local economy, more jobs, healthy consumer confidence, a tight inventory on the resale side of the market and low mortgage rates for the furious pace of local homebuilding.

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“The strength of the building economy is there,” Long said. “Obviously, national and global events can impact that. Interest rates, economics, et cetera. But I think there’s enough gas in the tank to support that (4,000 permits).”

Mortgage rates have ticked upward since Jan. 1 and stayed above 4 percent for most of the year. Nevertheless, they remain at historically low levels, Long said. Last week, 30-year, fixed-rate mortgages averaged 4.55 percent nationwide, according to mortgage buyer Freddie Mac.

“Even if it goes up, you’re still looking at under 5 (percent),” Long said.

One of the few problems for builders has been a lack of developed home sites — or lots — that are ready for construction, DeGrant and Long said.

Still, Nor’wood Development Group of Colorado Springs, one of the area’s largest real estate companies and the developer of residential areas such as Wolf Ranch, has told builders that more lots are coming, Long said.

“The homebuilding industry is slow to start, and slow to slow down,” Long said. “It’s like a ship. Once it starts getting going in a direction, it takes something to slow it down. And I don’t see it.”

In fact, DeGrant said, the strong pace of building should continue until at least 2020.

“By all indications, everybody’s feeling that same flavor,” DeGrant said. “This year and next year will be prime years for consumers and for builders and developers alike.”