Thursday, January 29, 2004
Spurred by low mortgage rates and an unexpected building boomlet in October, Routt County quietly assembled a robust construction season in 2003.
Routt County Regional Building Department head Mark Marchus said Thursday that the combined permit valuation of new construction in Steamboat Springs and Routt County last year totaled $128 million. That compares to $104 million in 2002.
"We actually went up 20 percent," Marchus said. "It's a huge jump. The norm is that, in late April or early May, we begin to see activity. Last year, nothing happened until June, and then we just got hammered."
The biggest single category of construction activity last year was single-family homes with 212 permits issued for a total value of $71.6 million. That compares to 174 permits valued at $61.1 million in 2002.
In January 2003, Marchus said he was anticipating that permit valuation could come close to $100 million, but he didn't expect construction activity to roar by that number.
Permit valuation doesn't necessarily represent the retail value of buildings that were permitted. Instead, it approximates the amount it costs contractors to put up the buildings, Marchus said.
Marchus said the $128 million valuation is impressive when compared to the record year of 1999. Valuation that year was about $204 million.
"We didn't have a huge project this year like we did then," Marchus said.
Most of the $75 million attributed to the Steamboat Grand hotel came in 1999, Marchus said. Other projects in that era included the newest tower on the Sheraton hotel and the Yampa Valley Medical Center.
Marchus believes mortgage rates in the range of 5 percent for fixed-rate loans and as low as 3 percent for adjustable-rate loans had much to do with the number of construction starts last year.
He anticipates that if rates stay in the range of 6 percent to 6.25 percent, Routt County could have another strong construction season in 2004. If they edge toward 7 percent, prospective home borrowers could become more tentative.
Favorable economic conditions were part of the reason for a permitting spurt in October that caught Marchus by surprise.
"It will never happen again," he said.
The building department issued 71 permits in October 2003, nearly double the number it issued in October 2002. Marchus said at the time that favorable economic conditions prompted developers to launch their projects and, in some cases, pour concrete late in the year to be in full swing when the snow melts this spring.
One notable construction start last fall was the Chadwick condominium tower. Marchus said the $1.5 million of permit valuation for the Chadwick's foundation is on the books for 2003. The bulk of the project, with a $10.5 million permit valuation, will be attributed to 2004.
Of the 212 single-family homes permitted in 2003, just 66 were in the city limits and the remaining 146 were elsewhere in the county. The average permit valuation per single family project in the county last year was $338,000, down from $351,000 in 2002.
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