Friday, December 14, 2012

82 percent of multifamily permits in Colorado issued in five counties

Year-to-date through October of 2012, 82 percent of all new multifamily permits issued have been issued in Denver, Broomfield, Larimer, El Paso and Douglas counties. 45 percent were issued in Denver county alone.

According to new county-by-county multifamily permit data for Colorado, 6,836 multifamily permits have been issued from January through October of 2012. 5,630 of them, or 82 percent, were issued in Denver, Broomfield, Larimer, El Paso and Douglas counties. There were 3,104 permits issued in Denver County alone, during the same period.

Recent multifamily permit data shows that new permit activity is largely confined to counties that have recently showed either stronger job growth, such as Larimer County, or overall higher incomes, as in Douglas County.

El Paso county, which has a relatively high unemployment rate, is nevertheless experiencing a fair amount of multifamily construction following a long period of small amounts of multifamily construction.

Downtown Denver and the northwest corridor of the metro area, which includes Broomfield, have reported significant rent growth in recent years, and developers appear to be capitalizing on high demand in those markets.

Total multifamily permits issued, Jan-October 2012
Adams 220
Arapahoe 470
Boulder 349
Broomfield 668
Denver 3,104
Douglas 590
El Paso 597
Jefferson 40
Larimer 671
Mesa 7
Pueblo 92
Weld 28

With so little demand for new condominiums right now, it is safe to assume that the lopsided majority of new multifamily permits being issued are for rental housing. The apartment vacancy rates in Colorado continued to decline into the third quarter, and this will lead to sustained demand for additional construction.

Year-to-date totals are little changed since September, as October was not an active month for multifamily permits. Larimer County was an exception, as 262 new multifam permits were issued in that county during October. Pueblo also added a significant number of new permits for the first time in more than a year.

Change since 2011

Many counties have reported much more activity this year than last year. There was no multifamily permitting from January to October of last year in Adams, Broomfield, Pueblo and Weld Counties, while there was far more activity this year in all those counties.

From January-October 2011 to the same period this year, multifam permit activity increased 150 percent in Arapahoe County, 238 percent in Boulder County, 145 percent in Denver County,  708 percent in Douglas County,  and 47 percent in Larimer County.

Declines in permitting: Permitting over the period declined 92 percent in Jefferson County, 9 percent in El Paso County, and 89 percent in Mesa County.