Home building may be slowing down in 2003

Drop in construction may not be serious if region keeps growing

Whether or not 2003 will see a strong resurgence in home building in Northern Colorado is something only time will tell, but local industry experts are hopeful the area’s attractions will still bring in buyers despite a sluggish national, state and regional economy.

Right now, what’s out there is a feeling of uncertainty. Bill Kish, president of the Northern Colorado Homebuilders, probably expresses it best, saying, “Which is more normal? What happened in the ’90s, or is ‘now’ more normal? Nobody knows. The one thing we have going for us is that Northern Colorado is still a place that is very attractive.

“Obviously things can change, like war with Iraq or something,” Kish said. “But if everything stays the same, I think things here will stay the same. Maybe not as choppy as we’ve seen. Maybe things will stay at a standard 3 percent (growth).”

Slowdown comes home

Home building has been slowing down all across the country, and that slowdown has come to Northern Colorado. But after the white-hot pace of the ’90s, ‘slowdown’ is a relative term. Bob Peterson, president-elect of the Colorado Association of Homebuilders and part-owner of Associates in Building and Design in Fort Collins, puts it into perspective: “A slowdown of about 10 to 15 percent is still thousands of homes,´ said Peterson. “We built about 1,200 in Fort Collins this year and when you add Johnstown, Greeley, Milliken and Loveland on top of that, that’s still thousands of homes.”

And there’s still plenty in the pipeline. “We have a ton of stuff in the works,” Peterson said. “There are three major subdivisions in the works in Loveland on top of the eight I know that are already there. It’s not as easy as it was in the ’90s. You have to be more innovative in marketing, building and probably financing, but they’re there.”

Aletha Langham-Godwin, owner of Mark Twain Homes in Fort Collins, is of two minds about the future of the local housing market. On the minus side, she thinks the region is headed for a definite downturn. “There’s a report from the National Association of Homebuilders, written by David Seider, that I read every year,” she said. “He’s been predicting a huge drop in Colorado for years and I think this year he may be right.”

Bad news, good news

Langham-Godwin is a little gloomy on that score for three reasons: One, she’s been seeing a drop in construction since September 2001. Two, there’s been a drop in migration of people from elsewhere. And three, the pool of first-time home buyers is shrinking.

“They (first-time buyers) are the ones fueling the market anyway, and they can only get so many loans,” she said.

But there is good news as well. Langham-Godwin doesn’t see housing valuations dropping at all as they did in California in the early ’90s, and she sees the present slowdown as a cyclical thing. “As the market tightens, good homes in good locations will still sell,” she said.

“Last year I had guarded optimism. This year (2003) I see a definite drop. It’ll take longer to sell houses. Every price point will be affected and there will be fewer builders building on spec because they can’t afford to hold (property) as long.”

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