Home construction continued its recovery last month in the Pikes Peak region.
Single-family building permits issued to area homebuilders in Colorado Springs and El Paso County totaled 227 in March, a nearly one-third increase over the same month last year, according to a Pikes Peak Regional Building Department report Monday. Permits now have increased for 15 straight months on a year-over-year basis.
For the first quarter of 2013, single-family building permits totaled 625, a 70.3 percent jump over the same period in 2012. It was the best first quarter for any year since 2007.
Pent-up demand on the part of buyers who had been waiting for the economy to improve and historically low mortgage rates continue to drive the market, said John Bissett, head of JM Weston Homes and board president of the Housing and Building Association of Colorado Springs.
Low rates make it as cheap to buy a home as renting an apartment for many people, said builder Dave Hammer of Hammer Homes Inc. Average apartment rents in the Springs hit a record high in the fourth quarter of last year.
“The rental market’s at an all-time high,” Hammer said. “For the same price, and very little money down, you can get into a new home and own it, and that’s very attractive for homebuyers.”
Fewer foreclosures coming back on the market and competing with new homes also has helped boost the homebuilding industry, Hammer said.
“The last two or three years, we had an excessive amount of homes that were on the market that were either foreclosures or taken back by the bank,” he said. “We’ve cycled through that.”
Homes being rebuilt after they were destroyed by last year’s Waldo Canyon fire are contributing to the homebuilding rebound, but aren’t dominating the numbers. Of the 625 single-family homebuilding permits taken out through March of this year, 60 — or 9.6 percent — were for homes being built in the burn area, Regional Building records show.
All told, 143 single-family permits have been taken out for rebuilding in the burn area; nearly 350 homes in the northwest side Mountain Shadows neighborhood were destroyed by the Waldo Canyon fire.
As homebuilding rebounds, prices are rising, too.
When the economy fell into recession and homebuilding slowed, suppliers held the line on costs for drywall, concrete and other construction materials. Now those costs are headed up; Hammer said his cost for lumber has increased by $1,000 each month since September.
“That’s a signal to people that may have been kind of waiting for a sign, that now would be the time to get back in the game (and buy a home),” Bissett said.
Even as more homes are being built, more jobs are needed to ensure the recovery is sustainable, Bissett added. The homebuilding industry is doing its part; as homes are built, subcontractors who do framing, concrete work or other jobs are increasing the size of their crews, Bissett said.
“People are at the point now in our industry where they’re becoming a little less concerned about adding people back into their businesses,” he said. “In the past, we’ve been very careful about overhiring or adding additional jobs, just because we weren’t sure where this (recovery) was going to go.”
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