Building permits continue to slide

Homebuilding remained in a deep slump last month in the Colorado Springs area.
Foreclosures, meanwhile, showed no signs of slowing, although it appears lenders are trying to work out deals to keep owners in their homes.

Single-family building permits issued in the Springs and El Paso County by the Pikes Peak Regional Building Department totaled 69 in October, the fewest in any month since 54 permits were issued in February 1991, according to a report released Monday by the building department. Also, the number of permits issued in October was down 38.4 percent from the same month in 2007.

For the first 10 months of 2008, single-family permits in Colorado Springs and El Paso County totaled 1,125, down 42 percent from 1,938 during the same period last year.

With two months left in the year, single-family permits likely will finish with their lowest annual total since 1,154 were issued in 1991.

Single-family permits measure home construction activity, which is a key segment of the Pikes Peak region's economy. Local homebuilding has been in a downturn for more than a year, which parallels the nation's housing slump.

Colorado Springs and El Paso County government budgets have felt the effects of the construction slowdown; their sales-and-use tax collections have shrunk dramatically as builders and contractors have slashed purchases of lumber, hardware and other building materials.

"Consumer confidence is at an all-time low and, unfortunately, it's carrying over to the building industry," said Fred Crowley, a senior economist at the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs.

Mortgage rates also have ticked upward, making it more expensive to buy homes, Crowley said. Unemployment rates also have increased.

But there are some positives for builders and sellers, Crowley said. Money being pumped into the economy by the federal government will trigger a bit of inflation, which will force up home prices after several months of declines, he said.

And while homebuyers are on the sidelines for now, an improved economy and the influx of thousands of soldiers coming to Fort Carson next year will create demand for homes and several years of strong construction activity, Crowley said.

Meanwhile, housing foreclosures totaled 449 in October, pushing the total for the first 10 months of 2008 to 3,849. That figure already exceeds last year's foreclosure record of 3,556.

In Colorado, a foreclosure or foreclosure filing is the start of a legal process that can result in the loss of a home. State law, however, allows time for borrowers to catch up on their payments and stave off the loss of a home.

Despite October's increase in filings, El Paso County Public Trustee Tom Mowle said there was a sharp rise last month in the number of foreclosures that were withdrawn, which indicates lenders increasingly are working out payment plans or restructured loans with homeowners so that they can avoid losing their properties.

And while foreclosure filings are up, Crowley estimated there were about 22 homes in foreclosure for every 1,000 households in the area in September, a better rate than the 32 homes per 1,000 in foreclosure 20 years ago, at the height of the area's last major real estate downturn.

-

CONTACT THE WRITER: 636-0228 or rich.laden@gazette.com