After years of having at least one development, if not two or three, on the list of the 50 best-selling planned communities in the country, Colorado has failed to make the cut in 2022, according to a annual update from real estate consultancy RCLCO.
Making the list reflects both a community’s popularity in attracting new residents and its ability to house its population. In some ways, it is a measure of an area’s residential building capacity. Many states never make the cut.
Metro Denver and other Colorado metros remain attractive destinations for immigration, so the lack of a hot-selling community should not be taken as an indication of weak residential demand, a said Karl Pischke, vice-president of the RCLCO. But it appears the state is struggling to license large-scale communities, making it difficult to replace large communities that sell out.
Unlike Florida, Nevada, and Texas, Colorado never topped the list of mega-communities, but it was a contender. RainDance in Windsor tied for 20th 2021 with 683 sales, but it is largely built and has only achieved 100 sales this year. Ban on Lewis Ranch in Colorado Springs upheld at 26th in 2020.
Stapleton, now Central Park, claimed the 15th place in 2019 with 604 sales and three others in Colorado also qualified that year – RainDance, Banning Lewis Ranch and The Meadows at Castle Rock. In 2018, Stapleton ranked 10th and Green Valley Ranch was 46th on the RCLCO list.
So what has changed? One of the reasons communities in Colorado aren’t making the cut is that many of them were builtand for a variety of reasons, builders are finding it harder to build a single community on such an epic scale as they have in the past.
Sterling Ranch in Denver just missed out on this year’s rankings with 326 total sales. That pace represents a drop of about 30% from 2021’s 471 sales. Sales in the 50 largest communities fell 20% last year, mostly due to higher interest rates, according to the RCLCO .
The common sense institute estimates that builders in Colorado need to obtain between 20,000 and 46,000 permits per year through 2025 to close the gap in the state’s housing stock and keep up with future population growth. They finally started to come together in 2021 and last year, but have fallen back sharply in recent months.
Pischke said the housing shortage has contributed to much stronger price increases in metro Denver than in other places where builders are better able to meet demand. New home price increases have been so out of whack that they have effectively killed demand to a greater extent in Colorado, particularly after interest rates began to climb in the second half of the year.
Buyers were already pushed to the limit and higher interest rates made them snap and terminate contracts for the purchase of new homes In large numbers. As a result, builders fell sharply in the second half of the year. Colorado’s inability to build enough new homes in the past, which has contributed so much to rising prices, could make it harder to build enough new homes in the future unless people stay home. state gap due to a lack of affordability or falling house prices, which they are starting to do.
Pischke also suspects that the difficulties developers have had in allowing large blocks is also at play. Colorado has gone from mega-developments like Highlands Ranch and Central Park to smaller communities. And because they all compete with each other for sales, it’s harder for a community to make the top 50 list.
“Securing a significant amount of rights, especially in metropolitan areas such as Denver, can be a difficult hurdle to overcome. So in a market like Denver where demand far exceeds supply, prices can rise significantly, making it difficult to achieve significant sales volume,” Pischke said.
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