Phil Castle, The Business Times::

Nate Porter counts himself among the fortunate Grand Valley home builders who not only survived the recession, but also managed to grow their operations.

“We’ve continued to grow, and it’s been a blessing,” says Porter, president and owner of Porter Homes. “I just feel like one of the luckiest guys in the world.”

Challenges persist for the residential construction industry, to be sure, among them competition from property foreclosure sales and high unemployment rates in the sector. Nonetheless, other factors have led to improvement, albeit slow, in the market, says Porter, who also serves as president of the Housing & Building Association of Northwest Colorado based in Grand Junction.

Porter isn’t alone in his assessment, either.

According to a monthly index compiled by the National Association of Home Builders (NAHB), Mesa County was among 28 metropolitan areas that in June joined a list of 80 U.S. housing markets showing improvement.

The NAHB/First American Improving Markets Index identifies areas that have shown improvement from recent lows in housing permits, employment and home prices for at least six consecutive months.

According to Elliot Eisenberg, a senior economist with the NAHB, the number of single-family building permits issued in Mesa County has increased 6.2 percent on a seasonally adjusted monthly average basis from a low in June 2011. Payroll employment in the county has increased 3.4 percent since a low in January 2010. And home prices have edged up seven-tenths of a percent since a low in July 2011.

Traci Weinbrecht, executive officer of the HBA in Grand Junction, says the inclusion of Mesa County in the index and a blog posting about the Mesa County market on the NAHB Web site constitutes encouraging news. “I was so excited to see that article.”

The news from home builders and other businesses remains mixed, Weinbrecht says, but somewhat more upbeat. “It’s improving slowly. But at least there’s some buzz out there.”

Some home builders have reported increased business, while others have focused their operations on remodeling projects. Still other builders that left the area or closed have returned or reopened, she says.

Porter launched his home construction business in 2007 and has increased volume every year since then, building 10 to 15 new homes annually.

He attributes part of that success to his willingness to take on a variety of projects — from homes priced under $200,000 to those selling for seven figures. “You need to build where the buyers are buying.”

At the same time, though, other factors have created more conducive conditions for home builders, Porter says. Lower land prices and historically low interest rates on mortgages have helped make new homes more affordable. In addition, new homes enjoy a competitive advantage in that they’re more energy efficient than older homes, he says.

Porter also senses a release of pent-up demand for new housing. “I think there’s a feeling people just want a new home.”

In addition to the numbers reported by Eisenberg at the NAHB, other trends confirm Porter’s analysis, but also reflect ongoing challenges for the industry.

According to figures reported by Annette Miller, senior vice president at Heritage Title Co. in Grand Junction and a long-time observer of the real estate market in Mesa County, the number of building permits issued for single-family homes has increased.

Miller says 48 such permits were issued for all areas of Mesa County in May, an 84.6 percent increase over the same month last year. The latest gain brings the total number of permits issued during the first five months of 2012 to 165, a 36.4 percent increase over the same span last year.

In Grand Junction, though, the total value of permitted construction activity for reports for the first five months of 2012 totaled almost $33 million, down 15.2 percent from the same span last year.

New residential construction accounted for about half of the value of permitted activity, followed by commercial remodeling at 24 percent, new commercial construction at 17 percent and residential remodeling at 6 percent.

Meanwhile, the monthly unemployment rate in Mesa County edged down a tenth of a point to 9 percent in May, the latest month for which estimates are available.

With declines in each of the last two months and three out of the last four months, the jobless rate has dropped to its lowest level since December. At this time last year, the rate stood at 9.6 percent.

Over the past year, payrolls have increased 1,906, and the ranks of the unemployed have dropped 330. The overall work force has grown 1,576.

Suzy Miller, business services manager at the Mesa County Workforce Center in Grand Junction, says labor demand has increased to its highest level in four years based on the number of job orders posted at the center. For May, 29 job orders were posted for the construction and extraction sector and were divided roughly evenly between openings for construction and extraction jobs, Miller says.

While the overall work force has grown in Mesa County, the unemployment rate remains far higher than it was before the recession, Miller says. The construction sector was hit especially hard and still lags behind other sectors in recovering, she adds. “It’s definitely not going as strong as we would like to see.”

Another measure of construction employment offers another perspective.

According to the Associated General Contractors of America, employment in the construction, mining and logging sector in Mesa County increased from 6,600 to 7,000 between April 2011 and April 2012, a gain of 6 percent. Mesa County was among 120 out of 337 metropolitan areas in the United States in which construction employment increased on a year-over-year basis.

While housing prices in the Grand Junction market remain well below pre-recession levels, they’re increasing.

Robert Bray, president of Bray Real Estate in Grand Junction, reported that median sales prices have increased every month since the first of the year. The median sales price of $172,100 for April was up 6 percent from March.

On the other hand, foreclosure activity remains high in Mesa County — higher in fact, in May, than in any of 11 other metropolitan counties included in the latest monthly report compiled by the Colorado Division of Housing.

According to the report, 106 foreclosure filings and 68 foreclosure sales were reported in Mesa County in May. Compared to the same month last year, filings rose 15.2 percent and sales increased 19.3 percent.

Through the first five months of 2012, 564 filings and 354 sales were reported in the county. Compared to the same span last year, filings rose 21.1 percent, but sales dropped 13 percent.

Porter believes the inventory of foreclosed properties will slowly decline even as demand for new housing increases.

Weinbrecht points to a number of factors strengthening the Grand Valley economy, among them the expansion of Colorado Mesa University as well as the ongoing development of a regional health care industry. Confidence is improving, she says, with more good economic news than bad. “There’s the heartbeat that’s coming back into the economy.”

Membership in the Housing & Building Association of Northwest Colorado, yet another measure of the residential construction industry in the year, has declined from more than 400 to around 100. But that figure is climbing again as new members join and former members rejoin, Weinbrecht says.

While the future isn’t certain, Weinbrecht says she’s encouraged by the success of home builders like Porter as well as the inclusion of Mesa County in a list of improving markets.