Building permit activity shows positive signs in residential construction
December 15, 2012
Steamboat Springs — As the Routt County Regional Building Department closes another year, small changes are afoot.
"I think we've turned the corner a little bit," Routt County Building Official Carl Dunham said Friday about construction in the area, adding that the trend is clearest in his department's revenue from permits.
Looking at valuations of new single-family home construction in Steamboat Springs and alteration projects adds to this optimism.
During the middle part of the decade — in the real estate boom — the ratio of new single-family home construction valuation in Steamboat Springs and Routt County to remodel valuations was more than 4-to-1 in favor of new construction.
That collapsed in 2009 and bottomed out in 2010, when alterations accounted for almost half as much as new single-family home construction valuations.
Now, the ratio is closer to 3-to-1.
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Dunham said it could be evidence that people are investing in their homes rather than buying new ones.
"It used to be that second homes drove the construction," he said. "Now, I think people are saying there are opportunities of putting people to work and increasing the value of my home."
The valuation of alterations and additions in Steamboat grew by about $640,000 against last year. That was paired with 25 more permits than in 2011.
While the rest of Routt County saw an increase of only two dwelling alteration permits (from 54 in 2011 to 56 in 2012), that resulted in a $2.52 million bump in the total valuation.
That worked to offset the $1.63 million decline the county saw in new single-family home construction.
However, new single-family home construction in the city limits of Steamboat Springs was what buoyed combined valuations.
Steamboat has jumped from $5.93 million in new single-family home construction in 2011 to $16.64 million in 2012, including a permit from early December.
"People are probably seeing that there's some value to having something that's in the Steamboat market," Dunham said.
Colorado Realty Group broker-owner Chris Paoli said this is a trend he’s been talking about for a number of months.
“The inventory is just not what the buyers want,” Paoli said about people passing on available homes to build their own.
Sometimes it can be more expensive to build, he said, but if the right home isn’t available, buyers with the means will switch to builders.
According to Yampa Valley Data Partners, the sell through rate for Routt County is above 2.5 percent, but that would need to be sustained for 12 to 18 months to see a dramatic increase in residential construction.
Steamboat and Routt County still are behind the historic average of construction and alteration permits and have a ways to go, Dunham said, but his department has made its budget where it hasn't for the past few years.
To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com