The Year in New Construction
The Year in New Construction
Numbers often tell a story and some of the local housing numbers are telling a story of increasing confidence in 2013 and anticipation of even better times in 2014.
As in other parts of the country, the local housing industry was booming in 2007, with 1,326 single family home starts. Unlike Sun Belt cities where housing was booming because credit was easy and flipping houses became a cottage industry, in the Grand Valley, housing was booming because jobs were abundant. The natural gas sector created jobs, opportunity and a need for housing.
The number of new housing starts fell by almost half in 2008, when there were only 705 new single-family starts. That was, unfortunately, just the beginning of the bad news for the local construction industry. The price of natural gas also fell dramatically and less expensive places to drill drew many of the jobs and opportunities in the energy sector away from the Western Slope of Colorado.
In 2009, the number of new housing starts fell by 46 percent, to 380. The following two years also saw declines until the bottom of the market hit in 2011, when there were only 293 new housing starts.
Most financial experts agree that new housing construction is a major generator of jobs, although the number of jobs created by every new home varies, depending on the consulting expert. According to the National Association of Home Builders, construction of one house translates into 3.05 full-time jobs.
Custom home builders are the ones who kept the local construction industry alive through the lean years, building a few homes at a time on lots that had already been developed. Many production builders, who put in infrastructure and built large neighborhoods where buyers had various house plans and amenities they could choose to customize their homes, had either gone out of business or couldn’t get financing, especially in the early days of the recession.
The number of new housing starts took a jump in 2012, when 403 permits were issued. The final numbers for 2013 haven’t been compiled yet, but through November, there were 424 permits for new single-family homes.
As a publication that covers the local housing market, Real Estate Weekly (REW) mirrored the local trend in its feature stories on new housing developments. In 2007, REW had stories about 24 different subdivisions, where infrastructure like streets and sewers was built and and houses were planned. In 2011, REW had just one story about a new subdivision , Adobe Falls in Fruita.
Because construction declined rapidly in 2008, many of the subdivisions that were developed in 2007 didn’t get built out before the economy crashed. Most of the new construction in the subsequent years, with a few exceptions, has involved absorption of those already-developed lots.
As the housing industry improved in 2012, the Grand Valley attracted the notice of the Pauls Corporation, a Front Range builder and developer, which purchased Red Rocks, a stalled Redlands subdivision. In 2012, it sold one lot in Red Rocks. In 2013, it sold three vacant lots and 16 homes. Two additional pre-solds are under contract, and the company started 10 spec homes in the last 30 days.
Lawrence Balerio, who has decades of experience in the local construction industry, purchased G.J. Gardner Homes, a national homebuilding franchise, in 2013 and set up shop. Since opening its doors in the summer, the company has built or started homes in Spyglass Ridge, the Orchard, Fairway Villas and Redlands Mesa Golf Course.
G.J. Gardener also purchased Ruby Ranch off 26 Road north of G Road, a development that was planned but not built prior to the recession, and Willow Wood Village near 31 1/2 and E Roads, which also needs infrastructure. The company hopes to have infrastructure complete and lots ready for building in both subdivision by the second quarter of 2014.
Blue Star Industries was building homes prior to the Great Recession and has managed to survive and thrive in turbulent times, building in several developments that were started by other developers and builders who did not survive: Mahan Manor, Silver Mountain, Brandon Estates, Legacy Estates and Greystone.
Blue Star built 68 homes in 2012 and is on track to sell 95 by the end of 2013. The company has 56 additional homes currently under construction and plans to put in infrastructure on a couple of new developments and continue building in existing developments in 2014.
Senergy Builders, which built its first few homes in the beginning of the recession, has also seen increased sales in all of the developments in which it has built. Senergy is building in neighborhoods that were started prior to the bust, but has also put in infrastructure in both Halls Estate in the north area and River Trails off D Road and is continually looking for lots and raw land.
Several other builders and developers have large-scale projects in mind for 2014, but aren’t ready for publicity yet. After the free-falling days of 2009 and the long slow descent to 2011, any sustained upward trend gives everyone in housing something to cheer in the upcoming year.
Keep reading Real Estate Weekly in 2014 to stay on top of local construction news and have a safe and happy new year.