The Denver new home market experiences strong growth in the first quarter

Posted in Denver - Colorado Springs Market | Posted on 05-02-2013 | Written by Metrostudy News

(Denver, CO – May 2, 2013) Sizeable increases in new home starts demonstrate not only strengthening builder and consumer confidence, but that ‘organic’ growth (job creation and population growth through in-migration) is the fuel needed to kick-start and maintain a healthy industry, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers continue to grow payrolls at a healthy pace, adding 34,500 jobs the past 12 months. The average annual growth rate is now 2.8% compared to 2.5% last March, extending the best run of job growth in Denver since 2000. “With Denver’s continued strong growth, the region still ranks among the top 10 MSA’s nationally for annual job creation, with the Natural Resources & Construction, Professional & Business Services, and Education & Health Services sectors demonstrating particularly robust growth,” said John Covert, Regional Director of Metrostudy’s Albuquerque and Denver Markets. The unemployment rate for Denver in March is still at 7.2%, where it’s been pegged for the last several months.   Colorado’s unemployment rate is 7.3% compared to 8.6% a year ago.

According to Metrostudy’s quarterly survey 1,596 homes were started in the first quarter, up +52% from 1Q13 when 1,050 homes were started. Builders started 6,084 homes in the previous twelve months ending in March, a +60% increase from the 3,811 annual home starts in 1Q12.  “Metrostudy is forecasting a 35% increase in home starts for 2013. Not quite the 55% increase the industry had in 2012, but given tightening lot supplies and inevitable price increases, activity in the second half of the year will likely slow down, “said Covert. Builders also closed 1,425 units in the first quarter, an increase of +39% from the 1,027 closings in 1Q12. There were 5,599 annual closings in the previous twelve months, a +29% increase from the 4,364 annual closings in 1Q12.

At the end of March there were 4,437 new homes in inventory, up +12% from a year ago and up 4% from last quarter. Despite the increase, the total is still only a few hundred units above the lowest inventory count in this housing cycle. Of that total, 2,770 are single family detached units that are either under construction, finished & vacant or are decorated models. The supply of total SFD inventory ticked down from 8.4 months last quarter to 7.9 months this quarter, but is up from 7.3 months a year ago. However, with home starts up over 50%, a rise in inventory is to be expected, and with move-ins up 39% inventory levels have been kept in check. Equilibrium for total housing inventory is considered to be around 7.0 months. “Since annual starts are now outpacing closings, and both are trending up, Metrostudy expects inventory levels to stay about the same throughout the year with some seasonal fluctuations, “said Covert.

What officially began as a ‘scramble’ for lots a year ago has only intensified this year. Lots in quality submarkets are virtually all spoken for at a time when builder appetite is high and lot deliveries remain encumbered by capital flow and an industry yet to ramp up resources needed to develop lots. The number of vacant developed lots has fallen for 20 consecutive quarters since peaking at over 20,000 in 1Q08. Currently there are 11,777 VDL on the ground, down -16% from last year. Of the total, 7,704 lots have frontages of 79 feet or less and are generally for production homes. At the current absorption pace, there is a 20 month supply of ‘production’ lots in the Denver Market when equilibrium is around 18 months. For lots in active communities, supplies are tightest for homes priced below $200,000 at 5 months’ supply, down from 22 months a year ago. “All other price segments have summarily fallen in the past year. Lot supply relief appears a ways off so these numbers are expected to tighten further,” said Covert.

“The ‘uncoiled spring’ that was the housing market, has sprung to life this past year. All segments of housing are contributing to the resurgence, including a strong resale market where median prices have jumped 15% in the last year to $268,200, a recovering new home market, and healthy apartment market. With employment numbers trending in the right direction, the future of housing in Denver looks bright for the first time in years. For now, however, builders must grapple with the stark reality of cost increases associated with land, materials, fees, vendors, etc. until we finally move away from the extremes of the past decade and establish a more balanced industry that is better prepared for strong growth,” said Covert.

For information contact:
john covert @ 720.493.2020 x 201
email: jcovert@metrostudy.com

About Metrostudy

Metrostudy, a Hanley Wood company, is the leading provider of primary and secondary market information to the housing and related industries nationwide.  Established in 1975 in Houston, Metrostudy provides research, data, analytics and consulting services that help builders, developers, lenders, suppliers, retailers, utilities and others make investment and business decisions every day.  www.metrostudy.com.

About Hanley Wood

Hanley Wood, LLC is the premier media, event, information and strategic marketing services company serving the residential, commercial design and construction industries. Through its operating platforms, the company produces award-winning digital and print publications, Newsletters, websites, marquee trade shows and events, Market Intelligence data and strategic marketing solutions. The company also is North America’s leading publisher of home plans.

Outlook Positive for Homebuilders in 2013

Posted in Denver - Colorado Springs Market | Posted on 02-06-2013 | Written by Metrostudy News

(Denver, CO – February 6, 2013) Denver jobs are being added at the highest clip in a decade. Home prices are up and the supply of listings is at its lowest level in over 10 years, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers continue to grow payrolls at an increasing rate, adding 40,200 jobs the past 12 months. Unemployment remains high, now pegged at 7.2% compared to 7.5% a year ago (November).” While the unemployment rate has dropped slightly over the year, the combination of population growth and the number of people who had given up looking for work and are now looking again, has kept the rate stubbornly high,” said John Covert, director of Metrostudy’s Colorado division.

According to Metrostudy’s quarterly survey 1,375 homes were started in 4Q12, up +88% from 4Q11 when 733 homes were started. Builders started 5,535 homes in 2012, a +55% increase from the 3,580 home starts in 2011.  Builders closed 1,413 units in 4Q12, an increase of +30% from the 1,088 closings in 4Q11. There were 5,198 closings for 2012, an increase of +21% from the 4,304 closings in 2011. “As Metrostudy predicted would happen by the end of 2012, annual starts now outpace annual closings, a favorable condition for the industry as it begins to grow again,” said Covert.

At the end of December there were 4,275 new homes in inventory, up +9% from a year ago and down slightly from 3Q12. Despite the increase, the total is still only a few hundred units above the lowest inventory count in this housing cycle. Of that total, 2,681 are single family detached units that are either under construction, finished & vacant or are decorated models. The supply of total SFD inventory ticked down from 9.0 months last quarter to 8.5 MOS this quarter, not unexpected as move-ins typically rise prior to the end of the year Equilibrium for total housing inventory is considered to be around 7.0 MOS. “Since annual closings are trending up, Metrostudy expects the recent spike in the supply of inventory to fall back down to within equilibrium in the next two quarters,” said Covert.

“Metrostudy’s forecast of 5,499 home starts in 2012 was almost spot-on. The same factors that went into that forecast are still driving demand today including strong job growth and in-migration, declining foreclosures, lack of resale and tight new home inventory, a full rental market, and low mortgage rates. A second consecutive year of over 50% housing starts growth is not likely, especially with lot shortages in ‘A’ locations persisting throughout the year and additional price increases. Sound pricing strategies will be a key to success in 2013 as some buyers risk being priced out of the market,” said Covert.

For information contact:
john covert @ 720.493.2020 x 201
email: jcovert@metrostudy.com

About Metrostudy

Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data collected by a staff of 650, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Housing: Anatomy of the Rebound

Posted in Atlanta Condo Market, Austin Market, Chicago Market, Denver - Colorado Springs Market, Las Vegas Market, Naples - Ft. Myers Market, Naples Condo Market, Nashville Market, National Housing Market, Northern California Market, Phoenix - Tucson Market, Raleigh - Durham Market, Tucson Market, Twin Cities Market | Posted on 01-31-2013 | Written by Brad Hunter

Metrostudy’s new study of housing in markets across the country puts hard numbers to the housing recovery, and provides a detailed look at differences in the trajectory among regions.  The data (collected at the end of calendar year 2012, and newly analyzed) indicate extreme variance among markets and submarkets, with some markets’ single-family production up 90% or more versus a year ago.

Starts of detached homes rose by an impressive 46.9% from year-end 2011 to year-end 2012, and the rebound is starting a virtuous cycle, providing a much-needed boost to personal incomes, which in turn translate into still-higher demand for homes.

It is important to understand the forces that are driving construction activity higher as well as those that are restraining gains in some areas.  In some markets, there are land constraints that work to the advantage of the builders who have lot positions and ongoing projects in those submarkets, keeping the number of head-on competitors low.  Additionally, the builders that have lot positions in lot-constrained submarkets are able to push prices up much more easily, and they have a strong incentive to do so, because:  (1) they can make more profit by selling the homes at higher prices, and, (2) they don’t want to run out of lots too quickly.

Read the rest of this entry »

11/20/12: Denver’s Home Builder Association Luncheon

Posted in Denver - Colorado Springs Market, Events | Posted on 11-06-2012 | Written by John Covert

Annual Membership Meeting and Luncheon

FBC luncheon featuring John Covert with Metrostudy. John will be speaking on the state of the housing market in Boulder County and North Metro Denver.
Luncheon will be at Spice of Life Event Center, 5706 Arapahoe, Boulder, CO.
FREE to HBA members who register by November 16th. $10 after November 16th and at the door.
Non-members, $20 by November 16th, $30 after November 16th and at the door.

Date:
November 20, 2012
Session:
Check in begins at 11:00 am
Program from
11:30am—1:00 pm
Address:

Spice of Life Event Center
5706 Arapahoe Boulder, CO

How to register:
1. Go to www.HBADenver.com
2. Click on Events & Education; click on the event in the calendar.
3. HBAmembers will need their HBAuser name & password to register online. If you do not have these, use the option provided at log-in to have them emailed to you.
4. Non-members use non-member option provided at log-in
For further assistance with registration
contact Heather Attardo at (303) 551- 6729 or hattardo@hbadenver.com

The Denver market continues to see improvements in 3Q12

Posted in Denver - Colorado Springs Market, National Housing Market | Posted on 10-31-2012 | Written by Metrostudy News

(Denver, CO–October 31, 2012) Denver Jobs are being added at the highest clip in a decade. Home prices are up and the supply of listings is at its lowest level in over 10 years, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers continue to grow payrolls at an increasing rate, adding 40,000 jobs the past 12 Months. The average annual growth rate is now 2.4% compared to 1.5% last August, and is now the highest rate of growth since early 2001. With Denver’s continued strong growth, the region now ranks 7th nationally for annual job creation behind New York, Los Angeles, Houston, Dallas, San Francisco, Seattle, and Phoenix. As a result, the unemployment rate for Denver is now 7.6% compared to 8.1% a year ago (August). “This is slightly below the Colorado and U.S unemployment rate which are both pegged at 7.8%,” said John Covert, director of Metrostudy’s Colorado division.

According to Metrostudy’s quarterly survey 1,647 homes were started in 2Q12, up +13% from last quarter, and up +40% from 3Q11 when 1,175 homes were started. This is the largest number of starts, in any quarter, since 3Q07 when builders started over 3,100 homes but were standing at the precipice of a long downward freefall. Builders also closed 1,389 units in 3Q12, an increase of +12% from the 1,238 closings in 3Q11. There were 4,869 annual closings for 3Q12, an increase of +14% from the 4,257 annual closings in 3Q11. “The fact that annual starts have eclipsed the number of annual closings this quarter is a unique milestone,” said Covert.

At the end of September there were 4,333 new homes in inventory, up less than 1% from a year ago and up +6% from 2Q12. This is the first annual increase in new home inventory since 3Q06. Of that total, 2,643 are single family detached units that are either under construction, finished & vacant or are decorated models (total inventory). The supply of total SFD inventory ticked up from 8.0 months last quarter to 9.0 months this quarter, not unexpected given the tight supply of inventory coupled with noticeable increases in demand. Equilibrium for total housing inventory is considered to be around 7.0 months. “Since annual closings are trending up as well, Metrostudy expects the spike in the supply of inventory to fall back down to within equilibrium in the next two quarters,” said Covert.

For information contact:
john covert @ 720.493.2020 x 201
email jcovert@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data collected by a staff of 650, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com

11/07/12: Metrostudy 3Q 2012 Denver Market Briefing

Posted in Denver - Colorado Springs Market, Events | Posted on 10-23-2012 | Written by John Covert

Metrostudy’s next Denver market briefing is a few weeks away. We will review the local and national economies, the resale market, and the results of our third quarter comprehensive survey of the new-home market. Additionally, we will briefly preview our new mobile platform for iPads … Metrosearch Insight. Please select the link below to register your attendance:
Click ‘Here’ to register for the Denver Briefing

When: Wednesday, November 7, 2012
Where: Denver Marriott South at Park Meadow: 10345 Park Meadows Drive Lone Tree, CO 80124
(303) 925-0004
link for map: http://www.marriott.com/hotels/maps/travel/denms-denver-marriott-south-at-park-meadows/

Time: 8:00 a.m. Continental Breakfast
8:30 a.m. Market Briefing Begins
10:00 a.m. Market Briefing Adjourns

This is an invitation-only event. Attendees will include only current clients and invited guests from homebuilder, developer, and lender organizations. Please feel free to forward the above link to any of your associates as there is no limit to the number of people who attend from client companies. If you would like to bring a guest from another company, please contact me to discuss. If you have questions, please don’t hesitate to call me at any of the numbers below. I look forward to seeing you at the briefing.

10/24/12: 16th Annual Northern Colorado Real Estate Conference

Posted in Denver - Colorado Springs Market, Events, National Housing Market | Posted on 10-04-2012 | Written by John Covert

SAVE THE DATE

When: October 24, 2012 – 7:00 a.m. – 1:30 p.m.
Where: Marriott, Fort Collins, CO

Featured Speakers:

Chad McWhinney, CEO & Co-Founder
McWhinney
Donald G. Provost, Founding Principle
Alberta Development Partners, LLC – Foothills Mall

Allen Ginsborg, Managing Director & Principle
NewMark Merrill – Twin Peaks Mall

John Covert, Director
MetroStudy

This event will count for four hours of continuing education credit for the Colorado Real Estate Commission. An additional four hours of continuing education credit is available for the 2012 Commission Update Course following the event.

Denver proves to be optimistic through 2012

Posted in Denver - Colorado Springs Market | Posted on 05-07-2012 | Written by Metrostudy News

(Denver, CO– May 7, 2012) Economic and housing indicators appeared to be springing to life during 1Q12 in Denver, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers have added a whopping 33,700 jobs to their payrolls in the last 12 months. “There are signs of life in the industry this year as new home and apartment permits are reaching their highest levels since the recession began,” said John Covert, director of Metrostudy’s Colorado division. “While renewed optimism is somewhat warranted, the cold reality is permit levels are still far below the peak as well as historical norms.”

A total of 1,049 homes were started in 1Q12, up 44% from last quarter, and up 28% from 1Q11 when 819 homes were started. Builders started 3,795 homes in the last twelve months, a 5% increase from the 3,585 annual starts in 1Q11. Builders closed 1,028 units in 1Q12, an increase of 6% from the 967 closings in 1Q11. “Metrostudy expects that 2011 will be the low point for move-ins or closings and that by the end of the year starts and closings figures will be very close to one another,” said Covert.

At the end of March, there were 4,029 new homes in inventory, down 13% from a year ago and up slightly .6% from last quarter. Of that total, 1,923 are single family detached units that are either under construction, finished and vacant or decorated models. “There is a strong indication that the inventory levels have stabilized, and that builders are meeting current levels of demand,” said Covert.

“Aside from housing demand that remains low and is well under historical norms, most other economic and housing indicators appear to be springing to life. At the top of the list are the numbers of jobs added to payrolls locally this past year. Nothing else will cure the ills of consumer confidence and home buying sentiment than strong job creation,” said Covert. “The resale market is running a close second as tightening inventory is quickly shifting leverage from buyers to sellers, which will help to further stabilize prices in Denver. It’s hard not to be optimistic about the future after what the industry has just come through. However, the most successful companies will have developed a keen sense of risk awareness moving forward which will serve them well during periods of growth,” said Covert.

For information contact:
john covert @ 720.493.2020 x 201
email jcovert@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data collected by a staff of 650, the company is recognized for its consulting expertise on development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

Denver can expect housing production improvements in 2012

Posted in Denver - Colorado Springs Market | Posted on 02-20-2012 | Written by Metrostudy News

(Denver, CO– February 28, 2012) Although starts slowed during 4Q11, they are expected to improve throughout 2012, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers continue to add jobs with the addition of 11,500 jobs in the last 12 months, which amounts to a 0.8% annual growth rate. “While certainly positive, the fact remains that Denver employers shed over 88,000 jobs during the downturn, and have since recovered only 23% of those jobs over the last 18 months,” said John Covert, director of Metrostudy’s Colorado division. “The market still faces headwinds. Job recovery is slow; unemployment is still high; demand for housing is still low.”

728 homes were started in 4Q11, down 38% over last quarter, and down 3% from 4Q10 when 753 homes were started. Builders started 3,571 homes in 2011, a 6% decline from the 3,784 starts in 2010. Builders started 1,664 homes January-June and 1,907 from July-December. “Lack of inventory, growing economy, improving buyer sentiment, and increases in traffic all pointed toward a stronger 2nd half of the year. Metrostudy expects this trend to continue through 2012,” said Covert.

Builders also closed 1,084 units in 4Q11, an increase of 4% from the 1,041 closings in 4Q10. There were 4,301 closings in 2011, a decline of 3% from the 4,448 closings in 2010. “Based on our forecasted increase in housing starts in 2012, Metrostudy also expects that 2011 will be the low point for move-ins or closings,” said Covert.

The supply of total inventory is at 6.9 months, which is slightly below what would be considered equilibrium for total housing inventory of 7 months.

“While housing starts will grow this year in Denver—expect around 15% increase—it won’t be widespread geographically, by price point, or product type. Careful analysis of risk and opportunity is more important than ever,” said Covert.

For information contact:
John Covert @ 720.493.2020 x 201
email jcovert@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.

3Q11 Starts Indicate Builder Confidence in Denver Market

Posted in Denver - Colorado Springs Market | Posted on 11-04-2011 | Written by Metrostudy News

(Denver, CO– November 1, 2011) The worst appears behind us and the industry is finally beginning to think about the future rather than stay mired in the past, yet it’s still a daily grind to find and close buyers, according to a recent report by Metrostudy, a national housing data and consulting firm that maintains the most extensive primary database on residential construction in the US housing market.

Denver’s current employment estimates indicate that employers continue to add jobs at a very slow place with the addition of +6,600 jobs from last September, which amounts to a 0.5% annual growth rate. This marks the 15th month in a row of positive job formations after 24 consecutive months of losses.

Sales of existing homes were up 13% year-to-year for the month of September following strong July and August sales. “Historically low mortgage rates this summer and more affordable prices were too attractive for some buyers to ignore,” said John Covert, director of Metrostudy’s Colorado division.

1,189 homes were started in 3Q2011, up +41% over last quarter, and up +17% from 3Q2010 when 1,020 homes were started. The 1,189 starts this quarter was the highest count since 3Q2008. “We had anticipated that an increase in starts would come in the second half of the year,” said Covert.

The supply of total inventory is at 7.9 months, which is slightly above its 10-year historical average of 7.5 months, and is within what would be considered equilibrium for total housing inventory of 7-8 months.

“Third quarter starts are up 17% year-to-year. That’s good news. While the percent change is based on a small number, it’s still a good indication that builders have some confidence in starting a few more homes. Metrostudy expects builders to start 10-15% more homes in 2012,” said Covert.

For information contact:
john covert @ 720.493.2020 x 201
email jcovert@metrostudy.com

About Metrostudy
Metrostudy is the leading provider of primary and secondary market information to the housing industry and related industries nationwide. In addition to providing its own primary housing data for approximately 70% of the United States housing market, the company is recognized for its consulting expertise regarding real estate development, marketing and economic issues, and is a key source of research studies evaluating the marketability of residential and commercial real estate projects. Services are offered through an extensive network of offices located in major metropolitan areas throughout the U.S. For more information, visit www.metrostudy.com.