New Home Builders call Denver a Sweet Spot

New Home Builders call Denver a Sweet Spot

For the first time in years, builders have something to smile about in the coming market; Denver's a 'sweet spot'

Posted: 01/06/2012 01:00:00 AM
By Mark Samuelson

Oakwood Homes President Pat Hamill shows his new Fairway Villas models at Green Valley Ranch Golf Club. Designed for 55-and-older buyers, they re bringing us unbelievable traffic, he said.

Builder Dave Mandarich, with 35 business years and 167,000 homes behind him, is putting a pencil to Colorado's indicators for 2012 and likes what he sees. "People are more confident," he said from Richmond American's headquarters in the Denver Tech Center. "They really don't want to be renters, they're feeling better about jobs, and rates are at a career low." Adding those up, Richmond American is launching a new model series -- and opening the throttles a little at master-planned locations such as Banning Lewis Ranch near Colorado Springs.

With lots of depth in markets that are bigger than Colorado's even in a bad year, Richmond American is sensing a "sweet spot" here - and other builders are nodding their heads in

Richmond American Homes American Dream collection will be priced from $199,950, with a large bedroom count and lots of standard features, including granite

"We're fortunate having a market that's stabilized," says Pat Hamill, whose Oakwood Homes ranks third behind Richmond in total sales, but is Colorado's largest privately-held builder and highest seller-per-community. That includes Thompson River Ranch, a master-plan in Loveland's I-25/Centerra corridor, which Hamill says is top-seller in northern Colorado, benefitting from new NASA jobs and other arrivals.

"The whole housing market got the swine flu," Hamill reflected; "but now local markets are emerging. We're seeing lower inventory, net in-migration of around 38,000 (in Denver metro), and huge positive job growth -- the first in four years. Consumer indices show people are starting to feel better."

In addition to some job growth, all builders are focused on the favorable inventory side - down drastically over 2010 according to market analyst Jack O'Connor with The Denver 100, whose latest report shows metro Denver's 8,854 active homes-for-sale as having dropped a whopping 36.5% over the year. They're also, adds Hamill, noting the fact that the so many builder-competitors disappeared during that four-year drought - around 40% to 45% of the competing market, he says.

For Oakwood, that's expected to render around 40% more sales in 2012, showcased from nine new communities Hamill expects to open (a few will also close as they reach sell-out). But while Richmond's Mandarich sees the best opportunities at the low end where inventory is lowest (his new American Dream series is priced from just $199,950), Hamill and other builders are watching for openings in the pricier move-up and move-down product ranges, as well.

"We view re-sales as our primary competition," says David Bracht, Lennar's Colorado Division president, adding that many homes for sale in the supply-side have terrible energy bills and other deficiencies that could eventually cost a buyer between $10,000 and $30,000 in remediation. "We're trying to have homes available for anybody in the market," Bracht added. That includes in Denver's Southeast corridor, where Lennar is feeling good about its offerings that edge into the $300,000 to $500,000 range, many with upgrades such as hardwood floors, fancier cabinets and smart-home features included in the price.

Dan Nickless, president of Ryland's Colorado division agrees, showing new offerings around Boulder-Louisville, northern Colorado, and Castle Rock. "Some of the inventory you see out there are marginal properties. The more people can move from their existing properties, the more that gives them the opportunity to get into a new home, with a more livable floorplan as well as more energy efficiency."

Mark Samuelson writes on real estate and business; you can email him at

Read more: For the first time in years, builders have something to smile about in the coming market; Denver's a 'sweet spot' - The Denver Post
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