Today’s rapidly skyrocketing home prices are making more than a few people nervous.
After all, it was only about a decade ago that the U.S. real estate market bubble burst, and millions of Americans lost their homes (and for many, life savings). And, as most of us recall all too well, plenty of others found themselves underwater on their mortgages, owing more than the homes were worth. But then came … the recovery. God bless the recovery! The housing market and economy have come roaring back. Some markets, in fact, are booming to historic levels. But many folks still have some serious housing PTSD when it comes to the prospect of buying. And isn’t a home supposed to make you feel safe and secure?

​So let us put you at ease: What goes up doesn’t have to come crashing down. As we’ve said before, record-high prices alone do not make a bubble. Still, if playing it safe is your top priority, we’ve got you covered. Our data team at realtor.com® set out to find the real estate markets that are least likely to pop if the country heads toward another recession—metros where home prices are still rising at a healthy (versus dizzying) pace.
We also only included markets where the supply of homes for sale is still large enough that buyers are unlikely to be pulled into costly bidding wars.
“These are the Goldilocks of today’s housing market,” says Javier Vivas, manager of economic research for realtor.com. “Not too hot, and not too cold, these markets present the right balance of housing and economic conditions for buying and selling activity to evolve naturally.”
Of course, no market is completely bulletproof against another financial crisis. But these cities, with their strong and diversified industries, come pretty darn close. Plus, steadily rising price appreciation means that they’re likely to be solid investments for the long haul. And slow and steady wins the race, right?
“They have rising demand, and the corresponding supply to quench it,” Vivas says. “And they’re all relatively smaller metros, often with large nearby siblings eating up any potential irrational growth, which keeps them from overheating.”
To identify the 10 metros where you can buy a home and rest easy about it, we compared the 150 largest U.S. housing markets, using nine key metrics:

• Positive (but not out-of-control) price appreciation of between 4% and 12% in 2016
• An ample supply of homes for sale (between three and seven months available)
• Affordability, measured by the percentage of income needed to buy a home
• New home construction recovered from the recession
• Median number of days homes are on the market (the lower the better)
• Foreclosure rate
• Percentage of homes underwater
• Percentage of homes with price reduction (yep: Lower is better)
• Low unemployment rate

Got it? So stay calm, get comfortable, and take a tour through our list of America’s most rock-steady markets.

 1. Fort Collins, CO 
Median home price: $376,000
Annual price growth: 7%

Colorado State University and a robust high-tech scene, which includes Hewlett-Packard and Intel, contribute to an enviable unemployment rate of 2.9% in this city of 160,000, the state’s fourth biggest. Fort Collins also has a third line of defense against economic downturns: the beer industry. It is home to a major Anheuser-Busch facility and 22 craft breweries—and as the Prohibitionists found, the alcohol industry is awfully tough to kill.
“Largely due to its diverse economy, the Fort Collins market has been extremely stable,” says Realtor Larry Kendall of the Group. “During the recession, our home prices didn’t fall nearly as much as the rest of the country.”
Fort Collins is also very affordable—at least by Colorado standards. The median home price is about 25% less than in Denver and 40% less than in Boulder, CO, both of which are about an hour away.
Housing highlight: The city is home to River Rock Commons, a progressive cohousing development of nearly three dozen single-family homes set up around a common house, where residents can prepare communal meals they can enjoy with one another. Togetherness rules.

2. Madison, WI
3. Durham, NC
4. Honolulu, HI
5. Greenville, SC
6. Ann Arbor, MI
7. Manchester, NH
8. Salem, OR
9. Oklahoma City, OK
10. San Antonio, TX

Home prices along the coasts may be hitting historic highs, but the housing markets that have experienced the most stable growth aren’t near the ocean.
On Tuesday, finance site SmartAsset released its annual list of the housing markets with the most stable growth -- defined as markets where there was both solid upward home price growth and a low probability that homes would have declined in value by at least 5% within a decade after the home was purchased. The site looked at the 358 housing markets in America from 1991 to the present.

Boulder, Colo., topped the list with the most stable growth over the past 25 years. Home prices there have climbed more than 300% and “the average homeowner in Boulder hadn’t suffered any significant price declines since 1991,” the analysis showed.
Boulder was followed by the Austin-Round Rock area of Texas, which has experienced home price growth of 271% without too many significant declines in prices. Casper, Wyo., Bismark, N.D. and Midland, Texas, round out the list of the top five housing markets with the most stable growth. 

Fort Collins, CO came in sixth. According to the 2016 version of Smart Assest's study on the U.S. housing markets with the most stable growth, employees of the city work in several different growing industries, due in part to the resources of Colorado State University. Home price growth has been fairly steady; on average, homeowners had a 5% chance of seeing their home values decline by 5% if they bought homes at any point in the last 25 years.

Many of the stable housing markets were in Western or Midwestern non-coastal states like Colorado, Texas and Montana and North Dakota. The likely reason: “It boils down to supply and demand,” says Daren Blomquist, the vice president ofreal estate site RealtyTrac. “In the middle-America markets there is more room to create more supply than in the coastal markets — which are often constrained geographically as well as by more regulation,” he says. 

Plus, Blomquist adds: ”The coastal markets tend to attract stronger demand from foreign buyers looking to invest in a U.S. real estate market that is well-known and accessible to them. These foreign buyers see even the higher-priced U.S. real estate markets as a bargain compared to other international markets (although London could become the next bargain market thanks to Brexit). The problem with the foreign buyer demand, however, is that it is more fickle than demand from traditional owner-occupant buyers that are more common in the middle-America markets, adding to the volatility in the coastal markets.”

Stable growth is important to homeowners because “when home values grow too quickly, a boom can quickly turn into a bust, and that can lead lead to vanishing equity, underwater mortgages, foreclosures and a lot of unwanted stress for homeowners,” says AJ Smith, the vice president of content at SmartAsset.
Still, just because a market has stable growth doesn’t mean it’s the market where you stand to make the largest profits when selling your home. For example, the median sales price for a home in San Francisco has gone from just over $410,000 in January of 2000 to $1.2 million in January of 2016, while, the spread in Boulder (the market with the most stable growth) went from $250,000 to $675,000 over that period, according to data from real estate website Trulia.com.

MarketWatch.com is published by Dow Jones & Co. and tracks the pulse of markets for engaged investors with more than 16 million visitors per month. The site is a leading innovator in business news, personal finance information, real-time commentary and investment tools and data, with dedicated journalists generating hundreds of headlines, stories, videos and market briefs a day from 10 bureaus in the U.S., Europe and Asia. 

The clock appears to be ticking on opportunities to build a new home within the Fort Collins city limits.

Based on the current rate of housing growth, measured against the existing amount of development land in the city, Fort Collins could exhaust its supply of housing lots within 17 years. That's the timeline calculated by Fort Collins city planners in a "Community Buildout Analysis" recently provided to the City Council.

For would-be homebuyers and investors, the news should be a call to action: If you want to build a new single-family home in Fort Collins, you’ll need to get cracking. 

According to the city’s report, the latest population estimate for Fort Collins is 155,400—and 169,000 for the larger Fort Collins Growth Management Area (GMA). Officials believe the GMA is large enough to accommodate up to 255,000 people. Consequently, with a population growth rate of 2.371 percent (the average annual growth rate over the past 20 years), Fort Collins could run out of residential development ground by 2032. 

Such a real estate scenario could generate the following ramifications: 

• First, expect more competition for fewer available homes, which means rising prices. 
• Second, investors will have greater incentive to redevelop existing home sites with denser, taller housing, such as condominiums
• Third, a larger share of the Fort Collins workforce will be compelled to live outside the city to find more affordable housing, resulting in greater traffic volumes. 

In each case, the impact of a dwindling land supply brings to mind the housing experience in the city of Boulder, where housing prices have been forcing Boulder workers to live in neighboring towns for the past three decades. Today, approximately 67 percent of Boulder workers commute from outside the city—compared to 45 percent of Fort Collins workers. 

If you are considering a new home project, we would love to collaborate with you. Please give us a call at 970-223-2664 for more information. 

In the Fort Collins, CO market, closings of new homes slid year-over-year in June, but the percentage decline narrowed from that of May 2014, suggesting that the market may be evening out. There was a 5.7% fall in new home closings from a year earlier. In comparison, new home closings in the same month last year saw a 20.3% decline year-over-year in May.

A total of 1,414 new homes were sold during the 12 months that ended in June, down from 1,422 for the year that ended in May.

As a percentage of overall housing closings, new home closings represented 15.1% of overall housing closings. As a part of the whole, new home closings were 16.0% a year earlier. Closings of new and existing homes stayed level after declining in May year-over-year.

Pricing and Mortgage Trends
The average price of new homes rose year-over-year 2.7% in June to $335,266 per unit. This gain is smaller than the 20.8% lift in May year-over-year.

For newly sold homes, the average mortgage size fell year-over-year in contrast to average price of new homes. In June 2014, there was a 1.2% drop in the average mortgage size on new homes to $276,551. In May 2014, average mortgage size jumped 8.4% from a year earlier.

Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings grew from 94.3% of new closings in June 2013 to 95.5% of closings in June 2014. Meanwhile, attached units as a percentage of all new home closings slid to 4.5% of closings from 5.7% of closings.

For all new homes sold, the average unit size sank 25.6% year-over-year to 1,895 square feet in June 2014. In May, the average size of new homes sold went from 2,295 square feet a year earlier to 2,464 square feet.

Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in June, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings made up 4.6% of closings, below 8.9% a year earlier. The percentage of existing home closings involving foreclosures went from 3.1% in June 2013 to 2.8% in June 2014 and REO closings as a percentage of existing home closings fell to 1.7% from 5.8% a year earlier.

Please refer to the ABOUT THIS MSA tab to learn more about geographic coverage and data availability in the Fort Collins, CO area.

National Association of Home Builders (NAHB) recently released an on-line tool that provides economic and housing statistics for all local associations.  The tool allows users to easily compare local area statistics to other associations, state and national figures.

The statistics provided are NAHB tabulations based on an aggregation of county-level data from the 2012 American Community Survey (ACS) and 2013 Building Permits Survey. The ACS and Building Permits Survey are conducted by the Census Bureau. The tabulations are based on the latest available data. For a description of the statistics provided, please visit this web page.

The Home Builders Association of Northern Colorado's (NoCO HBA) complete snapshot is listed below. Highlights of the snapshot included ranking 42nd among nationwide HBAs for single family permits in 2013 and 56th in multi family permits in the same year.  Single family permits for the NoCO HBA increased 33.70% from 2012 to 2013 while the state-wide single family permits increased 25%. The single family vacancy rate in the NoCO HBA jurisdiction  is 1.20% as compared to the statewide vacancy rate of 1.63%.

Building fees in Loveland and Greeley are more than twice as high as those in Fort Collins, but that may change as Loveland and Fort Collins embark on extensive reviews of the fees they charge developers and builders. Building fees for a home in Loveland are $20,139, compared with $19,920 in Greeley and $9,102 in Fort Collins, according to a Business Report analysis. Developers and builders pay the fees when building permits are purchased.

Loveland was the first city in Northern Colorado to institute the fees in the early 1980s after its city council decided that new development should have to pay for services to support extra people, according to Don Marostica, a longtime Loveland developer.
Having lower fees is not necessarily the best thing, Marostica said, because the cities could be criticized for not making developers pay enough when they build in a community.

In the end, though, it is not the developers who pay the price but the consumers, because the added cost that comes along with paying development fees eventually is passed on to the home buyer, Marostica said. Capital expansion fees go by a different name in every city, and cities charge different fees, depending on their policy objectives.

Loveland, for instance, charges $602 per home to help support its museums, but Greeley doesn't charge a museum fee. And fees for similar services vary dramatically. Greeley has the priciest water taps of the three cities, charging $10,100, while Loveland and Fort Collins charge $4,670 and $730 respectively.

This summer, as part of its re-examination of building fees, Fort Collins will decide whether to add a new trail fee to its development charges. The idea behind the fees is to help cities and counties pay for new police and firefighters, as well as roads and parks that are required as new development takes place. The fees help keep cities safe and maintain quality of life, but also affect home-buying markets.

"In the months following a government's decision to implement fees on new homes, the prices on the existing forsale housing stock increases," said Steve Spanjer, founding principal of Spanjer Homes, a Fort Collins-based home builder. "This is a just a normal economic market cycle," Spanjer said. "The consequence is inflation of the housing stock
and the result is more and more buyers cannot qualify for home loans." Loveland's fees cover the widest range of services, from transportation and police to the museum and library.

This, combined with the fact that Loveland's fees were first instituted in the early 1980s, is one reason fees are higher there, according to Alan Krcmarik, executive financial adviser for the city of Loveland. Most cities did notbegin using capital expansion fees until the mid-1990s, Krcmarik said. 

The way Loveland configures its capital expansion fees may soon change. Loveland is moving from a fee system based on current costs to a system which sets fees based on how much the city will need over the long term. Loveland departments that collect capital expansion fees are completing 25-year master plans that will outline their needs for years to come. These plans are expected to be complete at the end of the year, according to Krcmarik. Then, the city will spend 2014 determining how to adjust the fee schedule, and the fee changes will be implemented in 2015. Departments affected include parks and recreation, trails, open lands, police, fire and rescue, the library and museum, streets and general government. The fee changes also will apply to commercial development, Krcmarik said. In Loveland, it costs $1.08 per square foot for commercial properties, slightly more than the $1.07 the city charged in 2011. Loveland charges the same fee – $12,959 per home, regardless of home size. In 2012 the city charged slightly less, $12,529. Add in fees for water and sewer taps – $7,180 – and the total per-dwelling capital expansion fee for a new house in Loveland in 2013 is $20,139.


Following Loveland closely in terms of cost is Greeley, where the bulk of fees come from water and sewer tap charges. Of the total $19,920 in fees, which are called "development impact fees" in Greeley, $15,000 comes from water and sewer fees, leaving $4,920 for other city services, including fire and rescue, police, trails, storm drainage, transportation and parks. The $15,000 includes $10,100 for water and $4,900 for sewer.

Greeley charges more for its water and sewer taps, in part, because it has to transport its water farther, according to Erik Dial, the city's water and sewer budget analyst. The city gets its water from the mouth of Poudre Canyon northwest of Fort Collins and Boyd Lake in Loveland – both far west of the Greeley city limits.

Greeley completed an assessment of its fees in 2011, said Bruce Biggi, economic development manager. The city uses a different formula than many cities to decide how much to charge developers, Biggi said. For three of its departments – transportation, storm drainage and trails – the city uses a methodology that takes into account
factors such as the health of the overall market and unemployment.

In 2012, the first year Greeley used this method, the total development impact fees decreased slightly, before increasing by 1.2 percent in 2013 to $4,920, Biggi said.
Commercial development fees in Greeley are determined by the size and type of the building. Retail developments cost $7.85 to $8.15 per square foot, not including water and sewer plant investment fees.

In February, Fort Collins completed a re-evaluation of its fees for the first time in 16 years. Except for annual updates for inflation and sporadic updates to accommodate new requirements stemming from the Americans with Disabilities Act, no comprehensive study of the fees for parks, police, fire and general government had been done since they were adopted in June 1996, according to city documents. The study outlines options that include slight increases in all existing fees and the possible addition of a trails fee.
Different types of development result in different demands on services, according to the report. For example, residential development typically results in higher use of parks services. For this reason, Fort Collins charges from $1,041 to $2,428 per dwelling unit for the "community parkland" fund, but does not charge a community parkland fee for commercial development.

Fort Collins' fees are based upon the size of the development. Residential properties are charged in 500-square foot increments. Commercial properties are charged per square foot. For residential properties in 2013, capital-expansion improvement fees totaled $4,932 for a home between 1,201 and 1,700 square feet.

In Fort Collins in 2013, commercial developers are required to pay 65 cents per square foot to the fire, general governmental services and police funds. In 2012, commercial fees were 63 cents per square foot in Fort Collins. The biggest potential change heading for Fort Collins' fee structure is the addition of a dedicated trail fee, according to Jessica Ping-Small, revenue and project manager for the city. The city council held a work session
July 9 to discuss whether to establish a fee that would go toward expanding the trail system in Fort Collins, she said. If the trail fee is imposed, it could mean an extra $672 for an average-sized residential dwelling, between 1,200 and 1,700 square feet. This would mean total fees per dwelling unit of that size adding up to about $4,727, compared with $4,055 without the trail fee. A final decision on the trail fee is expected in August.

The Fort Collins Board of Realtors has been monitoring the situation, according to its CEO and Director of Advocacy, Clint Skutchan, but has not yet taken an official position. Realtors are concerned about how the fees fit into other costs associated with development, Skutchan said.

For example, the city is considering instituting a new fee for affordable housing, and the green building standards imposed by the city in early 2012 also add costs, he said. All of these costs ultimately are passed on to the consumer, Skutchan said, so it is important to determine how they fit together and what the bigger picture is. If new fees are imposed, the FCBR would like the city to use a phased approach that does not shock builders
and homebuyers, rather than imposing the full fee increase all at once. Still, real estate agents understand the importance of keeping up the city's trail system, Skutchan said.
"Quality of life sells homes as much as the home itself sometimes," he said.

Clarification: An earlier version of this story stated that the City of Fort Collins performed a review of its development fees for the first time since 1996 at the beginning of 2013. To clarify, the City of Fort Collins performed a review of some of its building fees, such as building inspection, in 2011, but a review of other development fees, including parks, fire, police and general government was not performed until 2013.

Higher costs to deliver water to homes are pushing the Fort Collins-Loveland Water District to raise its fees for new water service.

By the numbers Fort Collins- Loveland Water District
• Area: 60 square miles
• Customers: about 15,000
• Customers at buildout: about 30,000
• New water connections in 2012: 500
• Most new connections: about 900 (2002)
• Fewest new connections: 94 (2009)

Water providers eye possible use restrictions
Fort Collins Utilities and other local water providers are keeping a close eye on the mountain snowpack, or lack thereof. If dry weather continues through the winter and spring, water-use restrictions might be imposed next year, said Brian Janonis, executive director of Fort Collins Utilities. “It’s a real possibility,” he said. A decision on restrictions depends on how much snow falls in December and March, usually the snowiest
month of the year. Other local water providers are likely to follow Fort Collins’ lead on restrictions. “We’re all playing the wait-and-see game,” said Mike Scheid, general manager of the East Larimer County Water District

The resurgence of the housing market in south Fort Collins and Timnath and a jump in the price of water are pushing up the cost of future growth. The Fort Collins-Loveland Water District, which provides water to much of the area south of Harmony Road, north of Loveland and west of the Larimer-Weld county line, last week raised the cost to connect water to a new home from $16,000 to $18,000. The bump will go into effect gradually, with an extra $1,000 to cover the cost of acquiring water beginning Feb. 1 and an additional $1,000 to support the district’s water delivery infrastructure beginning June 1. The higher fees are needed to cover the rising expense of water and the demand for new service in the district’s coverage area, said Mike DiTullio, the district’s longtime manager.
The district has provided about 500 new connections — called taps — this year, he said. About 200 have come from the Timnath area; other hotspots are around Provincetowne and Observatory Village in south Fort Collins.

“That’s a pretty good number of this economy,” DiTullio said. “The builders are feeling a little more comfortable and they obviously have plenty of demand.” Growth in the district’s coverage area is high compared to other water providers. Fort Collins Utilities has had 120 new connections for single-family residences so far this year, along with seven duplexes, 55 multifamily buildings and 32 commercial buildings. The East Larimer County Water District, which serves a large area north of the city, projects it will have 210
new taps this year, said general manager Mike Scheid.

The Fort Collins-Loveland Water District has “justification” for boosting its connection fees because of its higher costs to acquire the water it delivers, said local homebuilder Steve Spanjer of Spanjer Homes. And the higher costs, which will be passed along to homebuyers, are not likely to have much impact on the pace of growth in the district’s 60-square-mile coverage area given its popularity, he said. But raising the cost could have consequences. “Any time the price increases for consumers, it makes it more difficult for people to qualify,” he said. “It’s just inflationary.”

Pricey water
About 95 percent of the district’s water comes from Horsetooth Reservoir, which is supplied through the Colorado-Big Thompson, or C-BT, water system. Fueled by growing demand and tighter availability, the cost of a share of C-BT water has risen from about
$8,500 to $11,000 in recent months, DiTullio said. A share is one acre-foot of water, enough to serve the needs of one or two urban families. The district “is always looking to buy more water” to meet its future needs, which are projected to be about double its current
holdings by the time its service area is built out, he said.

The district made a compelling case for why its tap fees had to increase during a meeting last week of its board of directors, said Greg Miedema, executive officer, Home Builders Association of Northern Colorado. But the builders appreciated the board’s willingness to phase in the higher fees so they could cover existing contractual agreements. “They are paying more for water than they are charging for it,” he said. “Nobody expects them to keep doing that.”

A complication for developers is the price differential among water providers for new taps, Spanjer said. Each has a different way of calculating fees; each has different requirements.
The water district covers about half of the Fort Collins Urban Growth Area and has about 8,000 customers who live in the city. Even within city limits, water-related development fees vary greatly depending on which side of Harmony Road a house is built, Spanjer said.
“We might be 2 miles apart, but we can be more than $13,000 apart; that’s a big price difference,” he said.

In addition to fees to support its water-delivery system, Fort Collins Utilities requires developers to provide water shares to serve the residential and commercial buildings they build or pay a fee based on lot sizes. For a 9,000-square-foot lot for a single-family home, connections to water and sewer would cost $13,021. Under the water district’s new fee structure — and adding the cost of a sewer connection to South Fort Collins Sanitation District facilities — the cost would be $22,500.

Fort Collins Utilities and the East Larimer County Water District plan to conduct studies in the coming years to determine whether their fee rate structures should change. 

Bouncing Back
 The economic downturn drove most national homebuilders from the Northern Colorado market several years ago. Much of the growth around the area is from local builders picking up lots where infrastructure has been in place “for years,” DiTullio said.
No major housing projects are on the horizon outside of multifamily developments in the Fort Collins service area.

This year’s uptick in residential water connections is likely a reflection of a “pent-up” market breaking out. Things are likely to stabilize in the years to come, DiTullio said. The district averages about 350 new taps a year. “We’re not pushing growth; we’re just there to provide a service,” he said. “We’re not in the land-use business.”

After years of stagnation, builders are back with renewed confidence in the strengthening housing market. Hundreds of new apartment units are already under construction in Fort Collins, lot prices are bouncing back to pre-recession levels and the number of available homes for sale in some price ranges is dropping fast. That leaves the door wide open for builders to start putting up new homes.

Building permits issued this year for new single-family homes in Fort Collins through Sept. 30 are the highest they’ve been since 2007, evidence of local homebuilder confidence, said Janet Mitchell, marketing director for Village Homes, which is building about 60 homes in the final phase of Observatory Village in south Fort Collins. “There are still some areas of the country that are struggling to come back,” she said, but homebuilders in Fort
Collins are “feeling good about the market and that is exemplified in the number of homes they’re selling.”

Three projects in the planning process in south Fort Collins alone will add nearly 360 single-family homes to the city. “We certainly hope the market has recovered enough,” said Gino Campana, developer of the Bucking Horse Project at the intersection of Drake and Timberline roads. The first filing of 215 single-family and townhomes to go with an “artisan village” at the former Jessup Farm is just about ready to break ground. The second filing of 68 homes, a community garden, horse boarding and office space will go to a public hearing tonight. A request by Brinkman Partners to annex nearly 29 acres on
the south side of Kechter Road would bring 75 housing lots into the city. That annexation will also be heard tonight.

Nineteen builders have already expressed interest in buying lots at Bucking Horse, Campana said. “All of them still have some stage fright after the recession we just experienced but they’re all hopeful the market is bouncing back, especially in certain price ranges.” Last year, homes selling for less than $250,000 were being gobbled up nearly as fast as they went on the market. That price point this year has risen to $350,000, according to John Gerhard, director of research and operations for the Everitt Real Estate Center at Colorado State University.

In the first half of the year, the supply of homes for sale in Fort Collins at less than $350,000 fell to fewer than six months, and the supply of homes in the $200,000-$250,000 range dropped to a four-month supply, according to an Everitt Center market analysis. A six-month supply of homes is considered a balanced market. Not only are the sales of new homes increasing, the number of finished lots left in the city is essentially nonexistent,
Gerhard said. During the recession, developers could barely give land away. Banks weren’t lending on vacant land and developers saddled with multiple lots bought before the recession dropped prices to shed their inventory. Now, Gerhard said. “lot prices are starting to reach what they were prior to the downturn.”

No one is declaring new home construction is back to pre-recession levels — economists say it won’t fully recover until job growth improves and the national unemployment rate, now at 7.8 percent, declines further. But it is moving in the right direction with ultra-low mortgage rates. The limited supply of homes for sale has also helped drive prices up.
Village Homes is having “phenomenal success” with the final phase of Observatory Village, Mitchell said. It has already sold 75 percent of about 60 lots it opened up in June at prices in the low $300,000s. “The markets in which we build are strong. There are still some markets in Denver that are lagging, we just luckily happen to not be building in any of them.”

Fort Collins never saw the huge drop in home values or a glut of overbuilding during the recession, which helped steady the market, she said.
“Right now our challenge is keeping up with the construction we have,” Mitchell said.

After years of bleeding jobs in the recession, the construction industry suddenly has a new problem to worry about: too much work and not enough workers.

Subcontractors across Northern Colorado say they are having a difficult time finding workers to fill openings at their companies now that construction activity is picking back up. The problem is expected to worsen once homeowners who lost their residences in the High Park Fire begin rebuilding.

As of April, Colorado had added 7,500 construction jobs since mid-2011; the industry was growing at a rate of 4.2 percent over levels from the previous year, according to the Denver branch of the Kansas City Federal Reserve.

Good news for contractors, it would seem, in an industry that lost 59,700 jobs between 2007 and 2009, according to the Fed. The problem today: many of those who lost their jobs moved onto other careers and are no longer available to the companies that would like to hire them. Colorado saw a peak of 170,100 construction jobs in July 2007. As of this May, the state had 118,300 construction jobs, according to the Associated General Contractors of America.

According to the Fed, in the first three months of 2012, both residential and commercial construction spending were up a whopping 50 percent in Colorado, and permits for residential projects were up 38.8 percent from the previous year.

Now, just as companies are landing work again, recruiting is turning out to be problematic.
There is, it appears, a dearth of construction workers, leaving Northern Colorado subcontractors with not enough people to handle the work coming in.

Many of the workers found jobs in the booming oil and gas industry, but that’s not where they all ended up, according to Steve Spanjer, president of Fort Collins-based Spanjer Homes.“Some went back home to Kansas to work on the farm, some went into auto detailing or auto sales, some are selling insurance,” Spanjer said. “There are some who went into oil and gas, but not all of them.” Some workers also went back to school when the recession set in and have now been trained in different careers.

Spanjer also noted that once the High Park Fire is extinguished and it comes time to rebuild the hundreds of homes destroyed by the fire, the construction business will pick up even more, if only temporarily. 

One subcontractor feeling the effects of the worker shortage is Gery Lockman, CEO of L&L Acoustical Drywall Contracting. Lockman first began noticing the uptick in jobs in October, but was able to keep up with the demand with a payroll of 30 to 35 workers. Within the last month, though, all of that changed. “All of a sudden, it kind of blindsided me,” he said.
The family-owned, Fort Collins company was soon receiving so much work that it needed to hire, but couldn’t find anyone in the area who wanted a construction job.

Lockman makes use of avenues like Craiglist or newspaper postings to find workers, and ended up hiring a crew from Texas who found his ad online. His staff is now at 45, and he anticipates that he’ll need to hire five to 10 more people. The downside to bringing in workers from out-of-state is the extra expense, Lockman said. Because the workers
he hired from Texas don’t have homes here, he has to put them up in a hotel, a $600 per week expense that is not factored into the price he charges to do a job.

Construction jobs aren’t as desirable as they used to be, Lockman said, for a variety of reasons. Especially among younger generations, the work is seen as low-earning and much less exciting than a job in an up-and coming industry like green energy.

Most of his employees are over 45, creating another, longer-term concern about what kind of shortage will be created when the current crop of workers retire. “The question becomes, ‘Where are my future workers going to come from?’” he said. When the economy was strong, L&L employed as many as 100 people, but pared that number back to 30 in the depths of the recession. L&L Acoustical also runs a drywall supply company, Lockman Drywall Supply, which is feeling the effects of the worker shortage, too.

The manufacturers with which the company deals are also having trouble finding enough workers and are considering rationing beginning in August that would cap the amount of drywall L&L and other companies can purchase. Eighty to 85 percent of L&L’s business is residential, and the company has worked on homes in Rist Canyon and the Glacier View subdivision, both of which have lost homes to the High Park Fire.

Lockman hopes that he can plan ahead well enough to deal with the volume of business expected in the reconstruction of mountain homes.

From RealEstateRama

More than 51,000 builders, remodelers and other members of the home building industry crowded the aisles of the National Association of Home Builders’ International Builders’ Show (IBS), which ended its four-day run Friday at the Orange County Convention Center in Orlando, Fla., last week.

Signs of optimism for the industry’s recovery could be felt throughout the show, as exhibitors noted increased booth traffic and solid sales leads.

“We were so happy with the show this year—it was truly unbelievable. We barely had time to take a break,” said Brian Stowell, CEO of Crown Point Cabinetry, who noted that they will exhibit again at IBS 2013 in Las Vegas.  “If you supply the construction trade, you are crazy if you don’t have your product here.  This is your one chance all year to get in front of a national audience of builders that have projects. This show is a must for us.”

The 2012 IBS featured exhibits from more than 900 suppliers representing all facets of the home building industry. Builders and remodelers also attended more than 165 educational sessions on design trends, green building, marketing, remodeling and other building industry topics.

Nearly 2,500 people attended a special address by Federal Reserve Chairman Ben Bernanke, where he discussed how restraints on credit for home buyers and home builders alike continue to impede the housing and economic recovery.
Attendees also flocked to IBS Live, a new theater-like venue on the show floor that featured several exciting sessions throughout the week including an appearance by “Dancing with the Stars” winner and Operation Finally Home spokesperson, J.R. Martinez; a live airing of the popular Los Angeles-based radio show, “Home Wizards;” and a number of presentations on topics like green building, consumer trends and home financing.

“We really enjoyed our experience at the 2012 IBS. We were able to meet with vendors and see the latest product innovations, attend a wide variety of education sessions to learn new ideas and sharpen our skills, and hear from a great line-up of speakers, said Steve Spanjer, President of Spanjer Homes. “We returned to work recharged and inspired. The IBS is an event our firm will not miss, as it helps enable us to be better prepared builders.”

Other highlights of the show included The New American Home 2012, NAHB’s official show home, and the IBS Opening Ceremonies featuring world-famous magicians Penn & Teller as keynote speakers, and Aron Ralston, whose inspiring story of bravery was made famous in the acclaimed movie 127 Hours.

The next International Builders’ Show takes place Jan. 22-24 at the Las Vegas Convention Center. Registration for the 2013 show will open on Sept. 1. Details will be available at www.buildersshow.com.

To view photos from the 2012 IBS, please visit: www.buildersshow.com/photos.