The Best of Times? The Worst of Times?
For home builders along the Front Range of Colorado, is it the “best of times”? Or, is it the worst of times as Charles Dickens leads off in the Tale of Two Cities?
What is behind the dynamics of our booming market being restrained from full potential by labor and material shortages?
Predictive Modeling: The Heart of Housing Tides Interface
Thanks to our data scientists, Housing Tides has developed a detailed predictive model of several variables affecting demand to forecast future housing starts in the U.S. and 50 high-activity markets within.
In Colorado, we analyze demand and supply determinants in Ft. Collins, Greeley, Denver-Aurora-Lakewood, and Colorado Springs. We update our findings and predictions monthly. The results are put in an interactive graph format in the Housings Tides Interface.
By our analysis, Greeley is the strongest housing market in our Housing Tides Index. Ft. Collins, Denver-Aurora-Lakewood, and Colorado Springs are all in the Index’s “Healthy and Improving” quadrant well ahead of the national average.
Without wading too deep into the graphs, it is interesting to note that Architectural Billings in all four of Colorado's Front Range markets is at the highest level over the last five years. Architectural Billings are a leading indicator of future permit activity in new communities.
I would suggest to anyone wanting to get into the details of the local markets and the 50 most vibrant markets in the U.S. to spend some time studying Housing Tides. It will help you “look around the corners” to get a better sense of the future.
Front Range Housing Permits are Exploding
Big Builders Dominate
The big are getting bigger. Of the top 12 builders in the Denver metropolitan area, all are national home builders, most of them publicly held companies. There are three more in the top 20.
Richmond American Homes and Lennar dominate home building in Colorado. Between the two of them, their volume is larger than the next five builders combined: D.R. Horton, KB Home, Taylor Morrison, Oakwood, and Meritage.
This trend will likely continue.
- Homebuilders are enjoying insatiable demand caused by the shortage of entitled sites.
- The shortage of construction labor and the supply-chain breakdown for construction materials, appliances, and cabinets are scorching cycle times for most homebuilders. Consumers are told that it will take a year to deliver a home.
- 2021 is showing a dramatic increase in new start activity, up 47.3%.
- Housing Tides predictive modeling shows continued growth in housing starts.
- Industry consolidation among big home builders is expected to continue.
About Jeff Whiton
Jeff formerly headed operations for Lennar and KB Home in Colorado building nearly two per cent of the state’s total single-family housing stock. He was honored as Colorado’s Home Builder of the Year in 2001. Whiton also served as the CEO of the Home Builders Association of Metro Denver for eight years reviving the association from near bankruptcy after the Great Recession.