COLORADO SPRINGS, Colo. (KRDO) -- With more than 4,100 permits issued for single-family home construction through November in El Paso County, the area has reached a 15-year high for homebuilding.
The area's housing market, which has been at record levels for several years now, remains hot despite the COVID-19 pandemic.
But with available existing homes in short supply and demand from buyers showing no signs of easing, homebuilders are scrambling to fill the void.
"Our inventory of homes is around 26,000 short of where it should be," said Todd Anderson, past president of the Housing and Building Association of Colorado Springs. "We don't know how long this demand will last. If we build too many homes, we'll get what happened in the 2008 recession and no one wants that."
Along with the shortage of available new and existing homes, other factors in the home construction increase include: The area's continued popularity as a place to live; and historically low mortgage rates of below 3% that have dropped 2% since 2015.
Such low rates make monthly house payments more affordable and provide better value to buyers, even as home prices keep rising.
The pandemic has affected the construction industry by causing labor shortages and making building materials harder to get.
The question is: How long must the area sustain a significant increase in construction before it meets the demand from homebuyers?
Renee Zentz, the association's CEO, said the costs of building houses are higher that we realize.
"Because of the pandemic, we have labor shortages and supply chain issues," she said. "The cost of lumber has risen 200% in the past year. There also are regulations the industry has to deal with. It's harder to build a home in a vacant lot within the city because of ownership and infrastructure issues."
Anderson said the increased costs have added between $10,000 and $20,000 to the price of a new home.
"Buyers have to ask if themselves if they can find something they can afford, then ask if it's something they want to afford," he said.
Zentz said the housing crunch wouldn't be so bad if more condominiums and townhomes were built, and if accessory dwelling units were more accepted.
"People aren't building enough of them because of regulations, opposition from neighborhoods and the threat of lawsuits," she said. "That has to change if we're ever going to resolve the housing situation."
The number of home construction permits in El Paso County set a record in 2005 with more than 5,300 issued. However, the recession in 2008 forced many builders and developers to declare bankruptcy or go out of business.
The local housing market began a strong recovery in 2016, after two major wildfires and other natural disasters had reduced tourism. As more people visited the area, the number wanting to move here increased significantly.
The area also has benefitted from high rankings in several quality-of-life surveys, downtown improvement projects and major improvements to Pikes Peak and the Manitou Cog Railway.
Michelle Cantu feels lucky to have recently moved into a new house with her husband on Gold Hill Mesa, in southwest Colorado Springs.
"We probably looked for a good 6 to 9 months, just looking at all the neighborhoods that are around here," she said. "Definitely more than we were willing to spend, but that just seems to be the name of the game nowadays."