In the midst of the election, all the ads, statistics, and campaigns, there was a piece of news that got a headline one day and then went completely unnoticed. This was the news about the new housing starts, building permits, and housing completions.
In case you did not hear the stats for September, it looked like this from the US Census Bureau:
1) Building permits were up 6 percent from August for single-family homes. All building permits were up by 45% from the same time period in 2011.
2) Single Family housing starts were 11% better than the previous month in August. All housing starts were up by 34% from September 2011.
3) Single Family housing completions were up by 8.5% from August. All housing completions are up by 13% from September 2011.
This is great news for everyone since we know that a major engine of the economy is housing. This also means that inventory is not only low in Colorado, but it’s also low across the nation. We have obviously burned through most of the resale properties, and builders need to start creating new housing to meet the demand. We have not seen significant building from any builders over the last four years, so this again is music to our ears. The national builders have been sitting on land for some time and are now developing that land. There still isn’t an adequate spec inventory; most of the new builds are pre-sales. I would expect that it would begin to change, as we get further into the process.
The last piece of the puzzle that we need to come together is the banks. They are lending to the national builders, but we need local banks to lend to local small to medium builders. That will create more jobs, create competition, more choices for buyers, and stimulate the local economy. The banks are still reluctant to lend to local builders, but hopefully, they will begin to see the light.
If the job market comes around in the new next year, housing demand will increase, banks will be forced to lend, and the real estate market will be back — and back big. Let’s pray that we continue to move in the right direction.