Denver Colorado New Construction Report
A New Home in Denver on Your Horizon
Buying a new home in Denver, Colorado might be a little more difficult in 2007 than 2006. If you were shopping new construction in 2006, many of the builders would have literally done handsprings to earn your business. Ammenities that had previously been upgrades were literally free for the taking. It is reported that 25% of the new home contracts fell out. If you were in a position to take advantage of picking up the pieces from one of those "fallen contracts", you might have cashed in on all of their agreed to upgrades at no increase to you. Just take it off the builder’s hands - PLEASE!! Often in 2006, when TeamCox accompanied buyers into new construction, we were heroes to both the builder and the home buyer. We were able to negotiate in our client’s interest better than in many previous years. Well, that was then and this is now 2007. The builders have cleaned almost all of that inventory and have few if any spec homes sitting around. New builds are done by contract only and delivery is six to nine months down the road. Building permits are down a whalloping 30%. This from a recent Rocky Mountain News article:
There were 11,183 permits issued for single-family homes in the Denver area in 2006, compared with 15,988 permits issued in 2005, according to the Home Builders Association of Metro Denver.
In 1992, 11,032 permits were issued. While there was a 35.5 percent drop in permits in 1987, that also included condos because the HBA didn’t break out homes and condos at that time, said Mike Rinner, vice president of the Genesis Group, which tracks Front Range housing.
The report also showed that apartment construction activity rose by more than 275 percent but started from a low base, with developers pulling permits for 1,727 units in 2006, compared with 460 in 2005.
Condo, townhome and duplex activity rose by 14 percent to 5,311. A total of 18,221 permits were pulled for homes, condos and apartments in 2006, a 13.6 percent drop from the 21,090 permits pulled in 2005.
Separately, Genesis reported 8,286 new-home sales in 2006, a 27 percent drop from the 11,412 in 2005. Townhome and condo sales fell 9 percent to 5,647 in 2006 from 6,187 in 2005.
Those numbers include the 25 percent of the homes that builders put under contract but didn’t close, in many cases because prospective buyers were unable to sell their existing homes, Rinner said.
Both Rinner and Roger Reinhardt, head of the Denver HBA, said the permit activity is good for the market. Reinhardt said the decline was "anticipated and even healthy."
Housing activity in 2005, 2006
Year No. of permits
2006 11,183 single-fam.
2005 15,988 single-fam.
• Down 30 percent
While this news may be disappointing to some home buyers who cannot wait for a new build, this will certainly clear the way for many homeowners to sell their homes without the pressure brought on them by the unabated new construction.
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