New Home Construction and Wall Street

Tied to the economy as a whole, new home construction and wall street ebb and flow in a similar pattern.  When home building is hot, the economy soars – creating jobs, creating stability, and creating happy Americans.  When the economy is weak, fewer people are able to buy homes and fewer home builders are able to get financing to build homes.

New Home Construction in Northern Colorado

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In Northern Colorado, we are certainly on an upswing with new construction.  New home communities have been popping up from Berthoud to Wellington, Loveland to Greeley and everywhere in between.  A lot of the major national home builders have come in and bought huge developments with 300+ soon to be built lots.  Meritage Homes (MTH) is active in the Fort Collins markets with a large developments at Kechter and Strauss Cabin road in south-east Fort Collins and a massive project at Zeigler and Drake in east Fort Collins. Company wide, Meritage has added 24 new communities nationwide in the first quarter of 2013, and has 168 active communities.  Year to date their home price is up 35%.  Ryland Homes (RYL) is also a large player in the Northern Colorado market with communities in Johnstown at Pioneer Village and new to Fort Collins at McClelland’s Creek.  As a company, their completed sales are up 60.4% in the first quarter of 2013 with an increase in orders of 54.4%.  Similarly to Meritage, Ryland’s stock price is up 35% this year.  DR Horton (DHI), the area’s largest national home builder is in several communities across Northern Colorado including Buckinghorse and Trail Head in Fort Collins, Summerfields at Timnath Ranch in Timnath, along with Windshire and Water Valley in Windsor.  DR Horton’s home building revenues are up 48% compared to 2012 and DR’s stock price has followed suit with the rest of the home builders, up 38% year to date.  New home construction and wall street are closely tied.

Because the federal reserve has kept interest rates so low, the financing of new home construction has been loosening and even regional homebuilders are able to take advantage of cheap money.  In Northern Colorado, we’re seeing local builders securing lots and building new homes, although spec homes and model homes are few and far between still.  Private equity firms are getting in on the recovering housing market, and leveraging cheap money as well.  These firms have operatives out buying houses at foreclosure sales for cash, or finding good deals and leveraging a big bankroll.  With consumer confidence at the highest levels since 2006, and stock prices up 35%, it wouldn’t be difficult to see that we’re in full recovery mode.  To learn how you can get into the game, contact us and leverage our experience.

The NoCo New Home Team is committed to bringing you useful information, timely advice and expert service whenever you need it.  Whether it’s Fort Collins, Loveland, Windsor, Greeley or anywhere in between, we’ve got Northern Colorado covered.  Feel free to contact the NoCo New Home Team or subscribe to our newsletters and market reports.  We’re always taking and responding to your questions and inquires!

Posted in 2013, Developments, Financing, Market Reports, New Construction, Real Estate Investing Tagged with: , , , , , , , , , , , ,