New home activity soars 51.5% | Inside Real Estate News

The Angelina model by Richmond Homes in Castle Rock ranges in size from 2,100 square feet to 3,100 square feet and is priced from the mid-$300,000s.

Builders from Boulder to Castle Rock pulled 4,581 permits for new homes in the first 10 months of the year, almost a 55 percent jump from same period in 2011, according to a report released today.

The report by the Home Builders Association of Metro Denver, also showed that builders pulled 446 permits for single-family, detached homes in October, a 70.2 percent increase from the 262 in October 2011.

October marked the 18th consecutive month that home sales activity increased from the same month a year earlier, said Jeff Whiton, CEO and executive director of the association.

In the first 10 months of last year, builders pulled 2,960 permits in the counties of Adams, Boulder, Broomfield, Denver, Douglas, Elbert, Jefferson and all of the municipalities in the counties. Permit activity indicates future construction.

?There is not much inventory available on either the resale or the new-home side,? Whiton said. ?In that respect, builders are simply responding to market conditions. Nobody has to worry about over-building and I don?t see much potential for price discounting going on. If anything, we are going to start seeing increases in new home prices.?

Indeed, builders may try to pass on increasing construction costs, some of it caused by hurricane Sandy.

?Those type of increases typically follow big natural disasters,? Whiton said. ?We experienced that after Katrina. Hopefully, it will not last too long and will not cause a huge spike in prices.?

The theory is that construction materials will be flowing to the East Coast where Sandy ravaged buildings and homes, causing potential shortages and driving up prices elsewhere.

?That is the way many people view it,? Whiton said. ?Of course, we are a long way from New Jersey and New York.?

The cost of material and labor also are rising because of increased demand, Whiton said.

The report also showed that Richmond American Homes of Colorado and Century Communities continue to be the two top builders in the metro area, having pulled 902 and 532 permits, respectively, in the first 10 months of the year. Richmond is part of Denver-based M.D.C. Holdings Inc., one of the nation?s largest home builders.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

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Source: http://insiderealestatenews.com/2012/11/new-home-market-hot/

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