Hard truths behind the housing shortage
Entitlement approvals are slowing things down, stated Jeff Whiton, CEO of the HBA

“Timescales in development and home building are long enough and cost change is happening so fast that it’s difficult to model our projects accurately,” said David Sinkey, founder and president of Boulder Creek Neighborhoods.

Inventory shortages in the residential real estate market have plagued metro Denver for years — shortages that drive up prices, frustrate would-be buyers with a lack of options and create bidding wars over the few homes there are on the market.

In February, the number of active listings in metro Denver dropped to a record low of 3,878, according to the Denver Metro Association of Realtors. The busy spring and summer selling seasons boosted that number back up over 7,000 by September. But in a market with this much demand, it’s still not enough to satisfy people looking to buy.

So, with record high pricing and record low inventory, why aren’t builders putting up homes as fast as they can to meet this demand?
It’s expensive to build a house, they say, and getting pricier all the time.
Also, available land is limited, and when it can be found, it costs a lot of money and the “entitlement” process — the legal steps needed before construction can start — is slow. In addition, materials costs are unpredictable, and construction labor is hard to find, especially in a state with some of the lowest unemployment rates in the nation.
Builders are finding ways around these challenges, but the extra time and expense it requires means that even though the metro area is poised to build more homes this year than last, the number of homes underway is not enough to meet demand.
And, the homes are more expensive to build, which increases the end cost for homebuyers.
10 years to break ground
Nearly 10 years after home building came to a screeching halt during the recession, builders are back in action...Read more in Denver Business Journal

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