Buildable lot supply in Boulder County

At a recent real estate conference I attended, I heard John Covert from Metrostudy speak and it was fantastic.  Metrostudy deeply analyzes the homebuilding industry and some of their data is very interesting and can be used to forecast the contribution of soon to be built single family homes to the tight supply we’re experiencing in our market.

Here is a chart from the data in John Covert’s presentation showing the number of New Home Starts in each community, the number of Vacant Buildable Lots in each community, and the Months of New Home Lot Supply for each community.

               Let me give some definitions before we start discussing the contents of this chart.  Annual & Monthly Starts are the numbers of new homes being “started” in each community or the number of homes being built each year or month.  Vacant Buildable Lots are lots that are ready to be built upon with streets, curbs, gutters and utilities already in place.  A builder could dig a basement and start construction on these lots tomorrow and finish a home anywhere within the next 5-12 months.  What this column doesn’t count are sites that the earthmoving equipment has just stared tearing up, places like Superior Town Center or the Trails at Coal Creek.  The Months of Lot Supply column is a best guess of new home supply in months for each community, assuming that there aren’t any large projects about to enter the market.  The one missing piece that I’m still trying to obtain is the amount of vacant land that could be developed into Vacant Buildable Lots for each community.

               The above chart is sorted by the Months of Lot Supply column.  It isn’t a surprise that the closer in communities of Louisville and Lafayette have very little supply for new homes.   There really aren’t any large new home projects currently selling in either area.  Lafayette does have the Trails at Coal Creek currently being developed, which will eventually contain 317 single family homes on the West side of Hwy. 287 just South of S. Boulder Road.  Lots should be ready for the builder Meritage Homes in 2016.  Since this project is currently being built, the lots don’t show up yet in Lafayette’s Vacant Buildable Lots column. I don’t know of any large projects left in Louisville, just smaller projects and infill.

               The City of Boulder is oddly far down on this list with 20.4 months of supply for buildable lots. I think this is due to a combination of factors, building in Boulder is rare, expensive and mostly done by custom home builders and due to these factors, the number that get started each year are smaller than in surrounding areas.  With the small number of starts and some vacant buildable lots, the supply in Boulder is larger than you’d expect.

               Another oddity to the data from the presentation was that there wasn’t any data for Superior.  I don’t have an explanation for its omission.  There is some small scale building going on in Superior south of the Super Target at Coal Creek Crossing and Superior Town Center is currently being developed.  Superior Town Center will have a large contingent of Single Family Homes once it is ready, but I’ve yet to see prices, details or the exact mix of single family homes, condos, townhome and apartments.

               The largest concentration of Vacant Buildable Lots in Boulder County is in Longmont.  A handful of projects make up this number.  Somerset Meadows, West Grange, Yeager Farm, Provenance, & Shadow Grass Park.  Interestingly, while Longmont currently has a large variety of Vacant Buildable Lots, they don’t have much additional, large-scale, vacant, developable land that I’m aware of within their governmental boundaries.

               The biggest number of lots available to be built on nearby but outside of Boulder County can be found down in Arvada.  1,255 lots, mostly in the two large developments of Leyden Rock and Candelas.  While this area has the most lots currently available, the long term future for the availability of new construction closest to the Boulder Valley will likely be in Weld County.  Erie and the Tri-Cities of Dacono, Fredrick & Firestone, all have long term availability of land to build upon and a governance that encourages new home construction.  Erie currently contains a large number of buildable lots, but most of those and most of the future building sites will be in the Weld County portion of Erie rather than the Boulder County portion.

With a 16 – 18 month timeline to go from vacant land to a ready to build community, Boulder County has very tight supply for new home construction without much relief in sight.  This tight new home supply is helping to push buyers further South and East if they insist on a new home to purchase or their price point isn’t attainable in Boulder County.  While we’ll see some new home relief from our tight inventory, that impact won’t be felt everywhere, mostly in Erie and Longmont.  Here’s John Covert’s slide from his presentation.