Springs housing starts up over last June

Good news on the local housing front has been about as hard to find as a Broadmoor mansion built with just a two-car garage.

But after months of tough times, the Colorado Springs area saw some encouraging signs on home construction and foreclosures in June.

Single-family home building permits in the Springs and El Paso County - a yardstick to measure construction activity - totaled 146 last month, a 50.5 percent increase when compared with the same month a year ago, according to a report Wednesday by the Pikes Peak Regional Building Department. It was the first year-over-year gain in monthly building permits in a little more than 3 1/2 years.

The surge in activity was welcomed. Not only does the housing industry employ thousands of people, but the Springs and El Paso County rely on sales tax collections from building material purchases to pay for roads, parks and other basics - services that have been slashed as the city and county grapple with declining revenues.

Economist Fred Crowley, who tracks area housing statistics, said he believes Colorado Springs home construction hit bottom in December and has been climbing, for the most part, since then.

"Things are looking a little bit better," said Crowley, of the University of Colorado at Colorado Springs. "It's not quite champagne time, but maybe it's Miller High Life time."

The federal government's $8,000 tax credit for first-time home buyers, along with additional troops arriving at Fort Carson, have helped boost construction, said Bruce Martin, division manager for Aspen View Homes, a Texas-based company that builds in the Pikes Peak region.

Aspen View has seen strong activity recently in Fountain, near Fort Carson, signing contracts to build homes and selling some of its speculative inventory - homes already built on the expectation buyers will come later, he said.

Scott Baughman, director of sales and marketing for Pueblo-based Premier Homes, said his company already had reduced its speculative homes inventory, meaning it's had to "restock its shelves" and start building. Mortgage rates, while still low, have inched up lately and prompted some buyers to purchase now on the fear rates will go higher, he said.

Springs economist David Bamberger of Bamberger & Associates, however, expects local housing to "wobble along at the bottom" before there's a significant rebound. Single-family permits for the first half of 2009 totaled 519, down nearly one-third from the same period last year and the lowest first-half total since 512 permits were issued in 1991.

"I don't think the message we saw emerge in June means that we're going to see dramatic increases over the coming months and that the market's clearly on the road to recovery," he said. "We're still seeing a lot of weakness. Job losses rising, mortgage rates increasing (and) foreclosures are all signs that say we have a ways to go."

When it comes to foreclosures, Public Trustee Tom Mowle saw some positive signs last month. The number of releases - property owners who avoided foreclosure by selling their home, refinancing or paying off their loan - totaled 4,342 in June. It was the third straight month releases topped 4,000, and was the best three-month stretch since late 2005, he said.

New foreclosure filings totaled 380 in June, down nearly 18 percent from the same month last year. However, Mowle said, his staff devoted more time to releases last month and less time to processing foreclosure filings, which resulted in the reduction in foreclosure actions. Foreclosure filings for the first half of 2009 totaled 2,679, and Mowle said El Paso County remains on pace to break last year's record of 4,602.