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Colorado Springs Residential Construction Rebounds Big Time!

20-Jan-2014

Colorado Springs Residential Construction Rebounds Big Time!

Colorado Springs-area construction activity that sagged during the recession has rebounded in record-setting fashion, led by a resurgence of the single-family housing market.

The combined dollar value of residential and commercial building permits - for homes, apartments, stores, restaurants, offices and utility structures, among other types of construction - totaled almost $2 billion in 2013 in El Paso County, according to the Pikes Peak Regional Building Department.

It topped the previous record of $1.5 billion, set in 2012, and more than doubled the dollar value of building permits during the height of the recession five years ago.

"It's been a busy year," said Henry Yankowski, who heads the Regional Building Department.

Of last year's nearly $2 billion in building permits, single-family, detached homes accounted for a little more than half of the total, Regional Building Department records show. It was the first year that the dollar value of single-family home permits surpassed the $1 billion mark.

Since 2009, the dollar value of single-family permits is up nearly 185 percent.

Industry experts credit pent-up demand and mortgage rates that were well below 4 percent for the first half of last year as the mainforces driving the residential recovery.

Not surprisingly, the increased activity has had a ripple effect within the construction industry, especially for businesses that specialize in residential work.

For now, some industry experts and economists expect residential construction will remain strong in 2014. Even though homebuilding slowed slightly in the last quarter of 2013 as mortgage rates crept above 4 percent, economist Fred Crowley of the University of Colorado at Colorado Springs said local housing is poised to take off again. In his latest quarterly report on local economic conditions, Crowley said he expects another round of pent-up demand from buyers to propel homebuilding. Also, he said, people will have gotten used to the idea of long-term mortgage rates in the neighborhood of 4.5 percent and will move ahead with plans to buy homes.

"I see no reason why it's not going to continue," Crowley said about housing construction. "People are going to have to realize you've missed the boat at 3.5 percent. It's not coming back."

Yet, based on historical averages, rates of 4.5 percent remain "an incredible buy," he said.

The rebuilding of homes in Mountain Shadows and Black Forest - devastated by wildfires in 2012 and 2013, respectively - also will contribute to residential construction activity, Crowley said.

The Colorado Springs Gazette 1/6/2014