The Dow has dropped hundreds of points in recent weeks and local home construction is hurting, but Colorado Springs economist Fred Crowley says the residential building slowdown is nearing an end and a slow recovery will ensue.
Crowley, an economist with the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs, told The Gazette the residential slowdown might have ended in December, although May was the ninth consecutive month numbers fell.
Nonetheless, home construction numbers are astounding, Crowley said. At the present rate new home construction will top 4,400 units this year, “an incredible number” in light of the loss of about 5,000 jobs since early last year, Crowley said.
“I don’t know where these buyers are coming from,” Crowley told The Gazette.
Since 2001 was a record year for new home construction in El Paso County, this year’s numbers aren’t as bad as it might seem.
Crowley sees a turnaround partially because some builders had sold homes they had on the market this year, and they’re looking to build for shoppers taking advantage of low interest rates. Crowley said homes in the $150,000 to $200,000 range are in most demand.
Commercial construction, on the other hand, isn’t doing so well. Locally, Crowley said, such construction might not recover until next year. Commercial construction is down nearly 40 percent for the year, but rose nearly 37 percent in May compared to a year ago.
Closures and layoffs have reduced the need for commercial space, meaning builders probably won’t put up too many new structures until vacancies drop.