“Build it and they will come” seems a philosophy best left to corn farmers and the ghosts of ball players. In construction, the reality is closer to “they come, therefore we build.”
Will Colorado’s Front Range construction boom continue through 2018? Here’s our construction predictions.
WHAT DRIVES THE GROWTH?
While oil and gas exploration and development fuels economic growth across the state of Colorado, the Front Range attracts more diverse industry. Glen Kelman, CEO of the web-based real estate company Redfin notes that Silicon Valley can no longer afford itself, and many tech companies have launched themselves at Texas and Colorado. Even Amazon sees the value of planting a second headquarters in the Denver metro area.
The University of Colorado at Colorado Springs actively courts and incubates cyber security start-ups, drawing more tech jobs to the region. Colorado Springs plans to renovate the downtown area around their City for Champions development scheme. In advance of an Olympic museum and other attractions yet to be built, an increase in hotel and condo construction has commenced with more projects on the drawing board, according to the Gazette.
Furthermore, the Colorado Front Range continues to attract many military-industrial contractors specializing in engineering, manufacturing and software solutions.
Growth in the health care industry affects the entire Front Range, top to bottom, but especially El Paso County. The Colorado Real Estate Journal reports: “With over $1 billion proposed and under construction in the health care and medical industry in El Paso County, health care has become one of the fastest-growing industries in the region, currently employing approximately 11,000 people.”
Let’s not underestimate population expansion as a result of legalized marijuana, something the economic experts carefully avoid discussing. The fact is, much of our growth, for better or for worse, springs from this turn of the law. The people who migrate here still need places to live. Which brings us to the incredible housing market.
According to the Denver Metro Association of Realtors, in 2017, Denver alone issued over 74,000 new development permits. As remarkable as that is, the entire Front Range, from Fort Collins to Colorado Springs, still hosts more buyers than residential homes for sale, says the Denver Post. Ben Marcus, of Colorado Public Radio reports that about 1,000 people per month continue to move to the Denver metro area. With too few existing single family detached homes available, many newcomers end up looking for new construction, condos or seek to rent. Similar conditions apply to the Colorado Springs metro area, as well.
COMMERCIAL BUILDING AND NEW INFRASTUCTURE
When asked, “Compared to 2017, do you expect the available dollar volume of projects you compete for in 2018 to be higher, the same or lower?” 59% of the Colorado general contractors surveyed by the Associated General Contractors of America anticipate all types of commercial projects to be “higher,” with public buildings and private offices topping the list.
Local Realtors, general contractors and economic watchdogs believe that the Front Range is ripe for a construction slowdown, but not until 2019 or later. However, almost all believe that the demand for affordable real estate remains unmet. Unaffordable prices will continue to spur new construction even as many who can’t meet the current prices levels make the decision to locate further afield of the Front Range.
Thus, a plateau becomes visible in the not-too-distant future, but by no means will new housing or commercial starts face a steep decline any time soon. Rather, the huge construction boom is poised to flatten into a steady, though not accelerating, condition after 2018.
Until the West Coast disgorges its overflow of technology firms and finds its own economic balance; and until other states relax their own marijuana statutes, we can expect the influx of new residents to continue.
As the boom continues, Barton Supply is here to provide construction materials and support along the Colorado Front Range with locations in Longmont, Aurora and Colorado Springs. Contact us today for help on your construction projects.