Residential developers across the Pikes Peak region are increasingly reporting a much-awaited trend: buyers are back.
Gold Hill Mesa developer Bob Willard is among those relieved.
With two tough years behind him, including the bankruptcy of John Laing Homes, which abandoned dozens of the development’s lots and unfinished homes, Willard is upbeat about 2010.
Fifteen contracts have been signed at Gold Hill Mesa since January, and three new builders are working on the master-planned community’s 2010 Parade of Homes’ models. Visitor traffic is up, and the site’s month-old JM Weston Homes’ townhome sales team just wrote its first contract.
Across town, Banning Lewis Ranch Management Co. Vice President John Cassiani also is feeling upbeat.
The company’s inaugural Northtree neighborhood saw 30 houses go under contract in the first quarter and construction is underway or set to begin on 27 new homes this spring.
“It’s good news, due in part to the (federal) tax credit (for first-time buyers). But I don’t think activity will end when it goes away at the end of April. We’re now seeing backlogs, some going through the end of summer. Those wouldn’t qualify as tax credit buyers.”
LeRoy Landhuis, developer of Lorson Ranch in southeast El Paso County, said that so far this year his development’s builders have closed 88 lot sales.
The community, which saw its first resident move in during fall 2007, is now home to more than 230 families. And even during a bleak 2009, Lorson’s four builders sold 131 new homes.
Pikes Peak Regional Building Department statistics only underscore the uptick in activity.
For the month ending March 10, 189 new-home permits were issued, the highest monthly number recorded in more than two years.
Granted, the pace is still 70 percent less than the number of building permits issued during the booming residential market of March 2005, when 608 new single-family permits were issued.
But it’s a definite sign of progress, said Challenger Homes vice president Todd Anderson. The company builds in nine different neighborhoods throughout the city. One of its newest communities is at Gold Hill Mesa.
Challenger has kept its eye on the first-time homebuyer, offering prices from $190,000 and up.
So far, its sales there have averaged about one a month — not bad compared to the past two years’ moribund market.
In other areas, the pace has been even brisker.
“We’ve been selling three or four homes a month at our Parkview (at Spring Creek) site, and only have two of our original 35 lots left where we build for a first-time buyer,” he said, referring to the development’s $160,000 to $190,000 pricing.
Oakwood Homes, another entry-level and first move-up builder, has projects under way at four different locations, including more than 220 homes in Fountain and a busy model home site at Banning Lewis Ranch.
President Jay Walther says he’s beginning to think the market turnaround is real.
“If you take out all the other headlines, the underlying data — building permits and home sales — has been improving since last summer.
“For buyers below $250,000, there’s almost a shortage of available inventory. Of homes priced from $150,000 to $200,000, there’s only a 2.9 percent supply in inventory,” he said.
Even CreekStone Homes, which builds in the $250,000- to- $400,000-plus range in six neighborhoods, has seen an increase in sales.
Amid the upbeat outlook, there are voices calling for caution.
Walther has witnessed outside investors beginning to re-enter the market. That, he says, creates more demand, eventually pushing lot and home prices higher. And if that happens, buyers will have to qualify for bigger loans in a tough credit environment.
Landhuis, who as a developer spent tens of millions of dollars in planning and infrastructure necessary to sell lots to builders, wants to see lot sales translate to actual home sales.
“There’s a lot of cheap land out there, and there are investors buying. But … I think we’re pulling permits on a 3-to-1 basis, compared to actual home sales. Permits may go stratospheric — 700 to 800 — for the first four months of the year. But until we see the clerk and recorder’s numbers (reflecting home sales), I’m still not sure it’s real.”