Starts of new homes continue double-digit rise.
Metrostudy releases 3rd quarter new home report.
New home prices continue to rise.
The Denver-area new home construction market is showing the most starts in almost a decade, while prices continue to spiral to record levels, according to a report released on Tuesday.
A third-quarter report by Metrostudy, showed that annual new home starts rose 24 percent, year-over-year, to 10,563 homes,
That is the highest new home construction level since 2007.
And homes that are priced at more than $400,000 represent 67 percent of the new home market, while homes topping $500,000 represent 27 percent of the market, both all-time highs, show Metrostudy’s analysis of the Denver-area market.
The price increases are being fueled by steady demand from move-up buyers, rising land, development, material and labor costs, according to John Covert, a regional director at Metrostudy.
The shortage of trade labor during the past several years several years continues to slow builders’ ability to complete and deliver homes, he said.
“In many ways the market is still hampered by tight supplies of lots, high costs, trade labor shortages, and regulatory pressure,” Covert said.
“But the economy continues to grow at a very healthy clip and demand for homes continues to push the industry forward,” Covert said.
Metrostudy expects around a 15 percent increase in housing starts for 2016 over 2015, which would put builders on pace to begin the construction of 10,500 to 10,700 homes this year.
However, that also would mark the lowest year-over-year percentage gain since the market began to bounce back from the Great Recession and historically low construction starts four years ago.
In 2012, year-over year starts rose a whopping 54 percent from 2011.
In 2013, starts were up 22 percent, 17 percent in 2014 and 16 percent in 2015, according to Covert.
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