Jump in permits 'encouraging'

The local housing market sent mixed signals last month.

Single-family building permits - a measure of home construction activity - totaled 180 during May in Colorado Springs and surrounding El Paso County, the highest one-month total since June of last year, according to a report released Monday by the Pikes Peak Regional Building Department.

"It's encouraging," said Fred Crowley, a University of Colorado at Colorado Springs economist. "It suggests housing may, in fact, be picking up a little bit."

Building permits could total about 1,800 for the year, which would be better than the 1,500 to 1,600 he had expected, Crowley said, after adjusting the latest monthly figure for seasonal ups and downs. Annual permits had topped 5,000 a few years ago.

Mortgage rates hovering around 6 percent for fixedrate, 30-year loans, aggressive builder incentives and an increasing population are a few reasons for the strong showing of permits in May, Crowley speculated.

Todays Homes, a Colorado Springs builder, is offering cash incentives that buyers can use toward home upgrades or closing costs, said Joe Kaiser, the company's sales and marketing director.

The incentives might total $10,000 in the new Banning Lewis Ranch development on the Springs' east side, or $20,000 in Fountain, where there's a large supply of homes for sale.

"They're very significant in getting people to buy," Kaiser said.

Yet, the area's housing slump is hardly over, Crowley and other analysts said.

The number of singlefamily permits issued in May declined a little more than 25 percent when compared with the same month a year ago. For the first five months of the year, the number of singlefamily permits is down about 40 percent from the same period in 2007.

"Sure, we're encouraged that there's a few more permits," said Bobby Ingels, a Springs developer and board president of the Housing and Building Association of Colorado Springs. "But I wouldn't take it as a sign."

At the same time, El Paso County foreclosures totaled 372 in May, a onefourth increase over the same month a year ago, according to figures prepared by the El Paso County Public Trustee's Office.

Year to date, foreclosure filings totaled 2,068 in El Paso County, which puts the area on pace to break last year's record of 3,556.

In Colorado, a foreclosure filing is the start of the legal process by which a homeowner could lose a home for failing to make mortgage payments. Every filing doesn't necessarily result in the loss of a house; some homeowners catch up on missed payments or work out payment plans with lenders.

In addition, El Paso County foreclosures are spread out over a greater number of households because of the area's growth. Even as foreclosure filings have risen, the rate of foreclosure per household is lower than it was during the area's last real estate downturn 20 years ago.

Daily foreclosure filings have remained steady since mid-March, said El Paso County Public Trustee Tom Mowle. And the number of foreclosure filings that are resolved, or "cured," is lagging behind last year's pace, he said.

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