11 July 2012 | Denver Post | 4 Comments
Denver real estate numbers continue to show growth
Posted: 07/10/2012 01:00:00 AM MDT
By Kevin C Keller
Denver Development Services' office is issuing more permits and site-development plans than a year ago, a sign that new construction and basic home-improvement projects are on the upswing.
"There is a level of comfort that things are getting better," said Kelly Leid, director of Denver Development Services. "It's a little premature for any long-term trends, but there is a steady incline in business, so the recovery is continuing, and Denver is proving it's better than most at bouncing back."
Building permits issued by Denver Development Services during the first six months of the year were up 13.5 percent compared with the same period last year.
Site-development plans, which are issued for larger projects, have almost reached the total number submitted for all of 2011.
The numbers represent the city and county of Denver only, not the metro area.
Building permits are required for everything from minor home improvements such as plumbing upgrades to construction of new structures, so the permit data offer a window into both larger-scale commercial development and smaller do-it-yourself activity.
Through June, Denver has issued 26,712 permits, an increase of 3,185 from the same period in 2011.
The number of permits issued exceeds some pre-recession numbers — 26,431 permits were issued through June in 2007.
Jeff Whiton, chief executive of the Homebuilders Association of Metro Denver, said residential real estate is by no means back to pre-recession levels, but the permit gains are good news.
"We are seeing steady month-to-month growth," Whiton said. "Denver is considered one of the better housing markets in the country. What people want to see is steady growth, and that's what we're getting right now."
Whiton expects metro Denver to have about 4,500 permits for residential for-sale properties for 2012. The pre-recession average was about 15,000 to 20,000.
Kristen White, director of sales and marketing at Denver-based Oakwood Homes, which builds in Green Valley Ranch, said sales for the homebuilder are 150 percent higher than expected.
"It's on it's way," White said of the improving market. "I don't know if we'll be back to a pre-recession market, but to a more normal market within the next year."
The increase in permits follows recent months that have seen rising prices and increased sales in the metro Denver housing market. Also, the number of foreclosures has declined, but experts warn they may soon climb again as banks resume foreclosing after a pause prompted by the robo-signing controversy.
Denver Development Service's data on formal site-development plans also represent positive movement. Site plans are for major projects, usually more than a half- acre, and represent multifamily residential buildings, hotels or malls.
A total of 84 formal site-development plans have been submitted to Denver Development Services this year. For all of 2011, 86 were submitted.
Ron Throupe, a real-estate professor at the University of Denver's Daniels College of Business, said the apartment market is driving the growth.
"Apartments are getting red-hot," Throupe said. "Apartments have been getting warmer every quarter, and it's because vacancy rates are quite low."
A total of 160 site plans were submitted for all of 2007. If Denver stays on pace this year, 168 site plans will be submitted for 2012. That would be a year-over-year increase of 95 percent.
It takes a lot of money to get site plans to submission, so the rise in site plans means people are serious, and it's a good sign for real estate as a whole, Whiton said.
The projects being submitted for commercial real estate are midsize to large, according to Denver Development Services.
"It's a substantial amount of multifamily," Leid said. "We see it from all over the city — strong activity in the downtown corridor but also Stapleton; Green Valley is really starting to pick up again."
Site plans that reach Development Services are projects scheduled to break ground in the next year and be finished within 18 to 24 months, Leid said.
"It brings both opportunities and challenges," he said. "We need a level of consistency to be ready and positioned to take advantage of the improving economy."
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