Building confidence: Pace of home construction accelerates

Building confidence: Pace of home construction accelerates
Silas Colman
Silas Colman
Nate Porter
Nate Porter

Phil Castle, The Business Times

     Silas Colman expects the land development and construction company he operates with his father, Chris, to complete 25 to 30 new homes this year. That’s about double the annual average for Copper Creek Builders.

“Business is good,” Silas Colman says.

Nate Porter, president and owner of Porter Homes, is even more emphatic in describing an operation that’s on track to build 22 custom homes this year. “We’re slammed. We’re as busy as we want to be.”

Although the pace of new home construction in Mesa County hasn’t yet returned to the boom level that preceded the bust more than a decade ago, Colman, Porter and others say the market has rebounded. While a shortage of available lots and construction workers could pose challenges, it’s anticipated an even bigger supply of new homes will be needed in coming years to keep up with demand in what’s seen as an increasingly popular place to live.

“It’s just really healthy right now,” says Kevin Bray, development coordinator at Bray Real Estate.

Bray tracks several trends in the home construction market in Mesa County, including building permits the county issues for single-family homes. Through the end of May, 266 permits had been issued so far in 2017 — a 45 percent increase over the same span in 2016. “That’s just substantial,” Bray says.

If the current pace continues, nearly 650 permits will be issued by the end of 2017, which Bray says would be the most since 2007. New home construction peaked in Mesa County in 2005 with more than 1,500 single-family permits, before downturns in energy development and the overall economy slowed activity. Construction hit bottom in 2011 with 284 permits, he says.

While home building activity has accelerated to its highest level in  a decade, Bray says supply still lags. “We’re not overbuilding.”

A combination of factors likely are involved, he says.

The inventory of existing homes for sales has dwindled as real estate activity has picked up. At the end of May, there were 891 active residential listings. At the pace of sales that month, that’s only about a two-month supply, he says.

The economic stimulus of growing operations at Colorado Mesa University and the local health care industry also has played a role, he says.

While more residents are shopping for new homes, more people are moving to the Grand Valley, Bray says, among them retirees from Colorado’s Front Range and mountain resort towns. They’re drawn to the area by lower housing costs, the availability of health care and outdoor recreation.

There’s even been an increase in the number of people buying second homes in the Grand Valley and choosing to spend their leisure time here, Bray says. “The outdoor amenities are something that people value.”

Colman agrees with Bray’s assessments of the new home market.

Residents still constitute the majority of buyers, including empty nesters looking to downsize and young couples. But there’s also a growing proportion of people moving to the Grand Valley from Denver, Salt Lake City and other areas, Colman says.

Chris and Silas Colman have worked in business together since 2002 as both developers and builders — a combination Silas Colman says has allowed them to design communities from scratch and better fit new homes into their surroundings, including the Copper Creek North development located near 25 and G Roads in Grand Junction.

Copper Creek Builders offer two product lines. Homes sized at 1,400 to 2,200 square feet sell for $239,000 to $280,000. Homes sized at 1,600 to 3,000 square feet sell for $270,000 to $380,000, Silas Colman says.

All of the homes come with what might be considered upgrades elsewhere, including the latest design elements as well as energy saving construction, he says. “We always have a passion to deliver a little more.”

Porter says he feels blessed to have grown Porter Homes through both downturns and upswings in the local housing market. “It’s been very consistent.”

But now, new home construction activity has increased to a comparatively faster pace, he says. “It feels like it’s booming.”

Porter says he’s focused the efforts of his business on higher-end custom homes constructed in the Summer Hill and Ledges at Redlands Mesa developments in the Grand Valley. Homes at Summer Hill range in size from 1,800 square feet to 2,600 square feet and start at $350,000. New homes at the Ledges at Redlands Mesa start at about $465,000, he says.

The homes cater to a niche that includes professionals and retirees, Porter says.

Like Bray and Colman, Porter says new home buyers include people moving to the area. “I think Grand Junction is discovered. People are moving here for outdoor recreation, the quality of life.”

Given growing demand for new housing, a growing supply will be needed, Bray says. The historical average for the Grand Valley is 1,000 new homes a year, more than the current pace.

A shortage of available lots and the construction workers to build homes on them could pose challenges for builders, Bray says. Otherwise, the outlook for the industry remains upbeat. “It’s going to be a nice five or 10 years.”

Colman also foresees what he believes will be at least several more years of “solid growth” for the industry.

Porter agrees. “I don’t see us slowing down anytime soon.”