Friday, December 14, 2012

Single family permits in Colorado up 41 percent, multifam up 85 percent

Through October 2012 in Colorado this year, building permits issued for multifamily construction were up 85.1 percent, year over year, while permits issued for single-family construction were up 41.5 percent for the same period. 

During October 2012 alone,  371 multifamily permits were issued in Colorado, and 1,252 single-family permits were issued. 

During October 2011, there were 614  multi-family permits issued, and 695 single-family permits issued. The first graph shows permit activity for the first nine months of the year since 1999. Through October of this year, there have been 11,273 single-family permits and 6,174 multifamily permits issued.

For October alone,  multifamily permits are down 39.5 percent and single-family permits are up 80.1 percent, compared to October 2011.

The first graph shows cumulative totals from January through November of each year:

The second graph shows that multifamily permits dropped off significantly in September and October following several months of robust growth. There is not necessarily a new trend being established here since MF permits are volatile. Single-family permits, however, tend to have a more reliable seasonal pattern. Single-family permits were fairly resilient for a October total and continue to show growth over recent years' activity. 

During October 2012, the number of new multifamily permits was still down from August's very high total, although the October total was up considerably from the October totals from 2009 and 2010. 

Single-family permits for October were at a five-year high and were inching back toward the levels seen during 2007.  This suggests that even single-family construction is beginning to see some real signs of life for the first time since 2008.  

In this report, single-family permitting has behaved as expected, showing slow ongoing growth. Multifamily permitting is up considerably this year overall, but has seen a couple of months of slow growth following a very active summer. 

The third quarter's report on apartment vacancies and rents in the metro Denver area suggest that demand for apartments continues to be strong, which is likely to lead to continued multifamily construction for now, although some regions of the state are more active than others.