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.