The pace of Colorado Springs-area homebuilding has climbed to a level not seen since before the Great Recession and shows no signs of slowing, despite the ongoing COVID-19 pandemic.
Through the first 11 months of 2020, the Pikes Peak Regional Building Department issued 4,145 permits to builders and individuals for the construction of single-family homes in El Paso County, according to the agency's report on residential and commercial activity in November.
That's the first time single-family permits have surpassed the 4,000 mark since 2005, when a record 5,314 permits were issued, Regional Building Department records show. And there's still another month to go in 2020.
"Could we hit 4,500? Maybe," said Ed Gonzalez, vice president and co-owner of Campbell Homes in the Springs.
The Regional Building Department issued 416 permits for the construction of single-family homes in November alone; it was the fourth straight month that permits have surpassed 400.
The permit numbers are for the construction of traditional, single-family detached homes and don't include townhomes, duplexes or condominiums.
"We do not even have our sales offices open on a full-time basis," said Ron Covington, co-owner of Covington Homes in Colorado Springs. "Everything is by appointment only because we're trying to follow the rules, as far as being distanced and wearing masks and all that.
"But the demand has just been amazing," he said. "When people make an appointment and they show up with their masks on, you're pretty sure that they're really interested. They're not just there kicking tires and looking at houses for something to do on the weekend. They're there because they need to buy."
Homebuilders and industry experts have pointed to a variety of factors for the surge in home construction. Among them:
• Historically low mortgage rates. Last week, 30-year, fixed-rate loans averaged 2.72% nationally, down from 3.68% a year earlier, according to mortgage buyer Freddie Mac. Five years ago, 30-year, fixed-rate mortgages were at 3.95%.
Lower rates make monthly mortgage payments more affordable even as housing prices rise, while they also allow some buyers to purchase more home for their money.
"Good grief, when you're looking at 30-year money and it's sub-3%, I've never seen it in my career," said Gonzalez. "I'm not sure that it's ever happened before. I think that's a big driver of this."
• A shortage of existing homes. The supply of homes on the resale side of the Springs-area housing market has fallen to historically low levels; in October, just 881 homes were listed for sale — the equivalent of less than a half month's supply, based on recent sales trends, according to a Pikes Peak Association of Realtors report.
"There just isn't enough of a supply of homes to meet the demand," Gonzalez said. "When the resale market can't provide those kinds of units for new households that are being formulated up here, the only place where they can go to get that is new construction."
• Desirability to live in Colorado Springs. Some people are looking to move out of larger cities and into what they consider as safer, suburban areas such as those in the Springs, Covington said.
He also pointed to the city's quality of life, availability of jobs and its healthy, growing downtown, where the U.S. Olympic & Paralympic Museum opened in July and a multiuse stadium for the Colorado Springs Switchbacks soccer team will debut in 2021.
"We've got a really good thing going," Covington said. "You can live in the suburbs, and you can have your space and you can not be on top of each other. But when you want to go down to the playhouse (Pikes Peak Center) downtown, you can do that.
"When you want to go to the new museum that's down there, for the U.S. Olympic, Paralympic museum, you can do that. They're building a soccer field down there. All those amenities are going to continue to keep the demand for living in Colorado Springs high."
The COVID-19 pandemic doesn't appear to have slowed buyer interest, though it has affected construction, Gonzalez said. When some factories slowed production because of the pandemic, his company saw a reduction in the availability of building supplies, he said.
The construction industry, in general, continues to wrestle with a shortage of labor, while the supply of homebuilding sites also is tight, Gonzalez added.
Still, he and Covington generally expect the demand for new homes to continue into 2021, though Gonzalez said a government-mandated "full lockdown" or closing of businesses to halt the spread of the coronavirus would hurt sales.
For now, however, Campbell Homes already has booked housing starts into May of next year, while its sales contracts for new homes are up 50% over the company's goal for 2020, Gonzalez said.
At his company, housing starts are up 25% over the last 12 months, Covington said.
"We're responding to the demand, we're not creating the demand," he said. "It just so happens to be we're a great community to live in. That's what's driving it."