Denver, Colo., home builders are seeing more than just signs of life; they’re experiencing near joie de vivre over the improvements.
“In January it was like somebody turned the faucet on,” said Perry Cadman, general manager at Brookfield Homes, a Canadian builder that decided recently to begin building homes as well as developing land in Denver. Cadman worked for Denver’s New Town Builders as a chief operating officer until early this year.
“One of the best things was that by the end of May we had as many net sales as we had for the whole of last year,” said Debbie Millage, sales director for Remington Homes, which is having success selling customized lock-and-leave production homes to empty-nesters. “Last year we had 90 net sales, and this year we have maxed that.”
“There was a very positive, dramatic change in the first couple of months,” said Rod Mickelberry, regional president for Cardel Homes. “We are having the best year in five or six years.”
And the evidence of a rebound is more than anecdotal in the Mile High City. By the end of May, housing permits issued were up 12.1% compared to the previous year, according to Hanley Wood Market Intelligence (HMI), which ranked Denver 16 out of 100 metro areas analyzed for growth potential as part of its most recent Home Building Outlook report.
Not unexpectedly, job growth is helping to fuel the rebound. It was up 1.8% at the end of May, driven by tech jobs, HMI said. Eighteen percent of Denver employers surveyed for a Manpower Employment Outlook Survey said they plan to hire more employees between April and June, and none said they plan to reduce staff. The survey ranked Denver as the fifth best job market in the nation.
Consumers are feeling the change. Consumer confidence in the Mountain Region of the United States was at its highest level since Sept. 2008, HMI reports.
Another boost to new-home builders is coming from a shortage of used homes. Denver was the second fastest selling home market in the country in March, with houses selling in a median of 22 days compared to 46 in March of last year.
“A rising tide lifts all boats,” said Mickelberry of Cardel. Of course, he adds, there are fewer home builder boats to ride the sea change. “Eighty percent of the builders who were here in 2006 are gone now,” he said.
But some nationals who survived are returning and others, like Brookfield, are seeing the turn-around and moving in. “I think they [Brookfield] see it as an opportunity to enter the market at the right time,” said Cadman. “We are really starting from scratch.”
Brookfield hired three architects to develop a collection of new plans for the market. The builder anticipates opening a new community called Midtown in the fall with David Weekley Homes as a second builder. The new development is seven miles northwest of Denver’s core and was a former brownfield site that was once owned by a defense contractor that made airplane parts during World War II and later became a place for Star Wars research during the Reagan administration. There’s room for 1,400 units, with 950 single-family homes. “I think things are finally turning the corner,” said Cadman, adding that Brookfield's “focus in Denver has been amazing locations, because people will always buy the good locations,”
Cardel has already taken advantage of the downturn to solidify its position in the Denver market. It improved its performance during the downturn partially by building in communities like Solterra, where homes continued to sell.
And the housing recession offered Cardel the opportunity to triple its holdings of A location lots as worried developers agreed to better sale terms. In addition to Solterra, Cardel also bought lots in Highland Ranch more than two years ago, taking over some distressed multifamily housing in another good location.
“It sure feels good in Denver now,” said Mickelberry.
Teresa Burney is a senior editor for Builder magazine.
Learn more about markets featured in this article: Denver, CO.