Colorado Permits Reveal New-Home Construction Trend

Single-family construction permits increased 7.6% from 2019 to 2020 statewide in Colorado, and breaking down the permits per county reveals a trend for new-home construction. Nationally, permits increased by 14% annually, and Colorado’s construction activity was the ninth highest in the country. But its increase in permits last year was much lower. The reason? Permits dropped in three prime counties: Denver, Boulder, and Broomfield. The Denver Post notes that if these counties kept their permits up at pre-pandemic levels, Colorado would have seen a much higher annual increase in permits. It shows a trend away from urban infill areas and into more landlocked areas.

Combined, metro Denver only had a 1.4% gain in single-family home permits last year, one of the weakest showings among large U.S. metros. Houston, Dallas and Phoenix all saw permit activity rise by more than 25%, according to NeighborWho. If it’s any consolation, metro Denver at least matched Seattle, which was also up only 1.4%.

“The underlying story is that the shift from the urban infill areas like Denver, Boulder and Broomfield and to some degree Jefferson County, the more landlocked areas, accelerated,” said John Covert, regional director for Zonda, a housing market research firm.

That shift was underway before the pandemic, and it has favored suburban counties like Adams, Arapahoe and Douglas, as well as other counties up and down the Interstate 25 corridor.”

El Paso County, up by 997 permits or 25.3%, and Larimer County, up by 610 permits or 38.6%, had the biggest gains in single-family construction. Weld County, long a hotbed of home construction, was off by one permit as its economy coped with a big drop in oil prices and drilling activity.

Metro Denver’s eastern edge was home to the next three hot spots after El Paso and Larimer. Arapahoe County added 542 permits, for a 22.7% gain, while Adams County increased the number of single-family permits by 523 or 23%, and Douglas County added 174 more permits for a 6.6% gain.

Although smaller than those suburban counties, Elbert County added 100 permits, a 51% increase. Of Colorado’s 64 counties, 36 recorded an increase in single-family home permits, four remained flat and 24 had a decrease last year.

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