MetroStudy released their first quarter report on new home construction for metro Denver. Only 1% of new home starts in the first quarter had a base price below $300k, down from 3% of new home starts a year ago.
Only 22% of new homes started had a base price < $400k. Just 2 years ago, homes priced below $400k accounted for 40% of all housing starts.
41% of all starts had base prices in the $400’s.
22% of all starts had base prices in the $500’s.
9% of all starts had base prices in the $600’s.
Home starts for the first quarter rose 14% from a year earlier as builders started 3,222 new homes, helped by mild and dry winter weather.
Annual starts increased 8% year over year to 12,396 units. This was the first time home builders eclipsed the 12k mark since 2007.
Builders also built and closed 2,733 homes in the first quarter, up 14% compared to a year ago..
Closings for the last 4 quarters totaled 10,462 units, up 6% from a year ago.
As I have been saying for 2 years, metro Denver home builders built over 15,000 new homes a year for 10 consecutive years (1997-2006), so they have a long ways to catch up.
Plus if Initiative 66 makes the ballot and is passed by voters, new housing growth will drop about 50% as this Initiative would limit new housing starts (for sale and rental) to just 1% of current inventory levels. This means builders and developers could only get permits for about 13,000 homes and apartments in 2019 and 2020. This initiative would be a great way to make the entire Front Range real estate market look like Boulder’s.