Local home building improves in October

The pace of home building improved in the Colorado Springs area last month, while foreclosure filings might be leveling off, two new reports suggest.

Good news for the housing market? Not so fast, industry officials say:

• Building activity: El Paso County single-family home building permits totaled 105 in October, a 52.2 percent jump over the same month last year, according to the Pikes Peak Regional Building Department. October’s permit total is compared against a particularly bad month in October 2008, when just 69 single-family home building permits were pulled — one of the lowest monthly totals in many years.

Through the first 10 months of 2009, single-family permits totaled 950, down 15.6 percent from the same period in 2008 and a 51 percent decline from the same time in 2007.

• Outlook: “It illustrates a continuing weakness in the market,” Ralph Braden, board president of the Housing and Building Association of Colorado Springs, said of the year-to-date numbers. Braden said he expects only a slight gain in single-family permits in 2010. An extension and expansion of the federal government’s $8,000 tax credit for first-time home buyers would help the market, he said.

• Why it matters: The industry employs thousands, and several builders, contractors and subcontractors have laid off workers because of the construction slowdown. Fewer homes being constructed has hurt city government, which relies on sales tax revenue, including that collected from the purchase of building materials.

• Foreclosures: Filings totaled 434 in October, down from 449 in October 2008, according to the El Paso County Public Trustee’s Office. For the first 10 months of the year, filings totaled 4,540.

• Outlook: It’s mixed, said El Paso County Public Trustee Tom Mowle. The slight reduction in filings might indicate the county’s foreclosure problem is leveling off, he said. Also, in a growing number of cases, homeowners have come up with money to resolve their problems or have worked out deals with lenders to keep their homes. Still, by week’s end, foreclosure filings for the year likely will top 4,602 — surpassing 2008’s total and setting a record for the third straight year.

• Why it matters: Rising foreclosure filings are often a sign of a weak economy;  jobless homeowners can’t make their mortgage payments. Also, foreclosed homes typically come back on the market at discounted prices, which tend to lower values for nearby properties, economists have said.