Colorado Springs Building Permit Statistics

At first glance these numbers may seem a little dismal. However, while they are definitely not good news for the short term profitability of home builders, this correction is actually very good news for the overall health of the housing market. Why?

Because it allows the balance of supply and demand to correct itself from the oversupply we had experienced. So while the news recently celebrated an increase in housing starts (nationally), the lower these numbers are temporarily, the quicker prices will rebound.

This data shows building permits for the past 3 years. By looking at “year over year” change you can more accurately decipher the market since this takes the seasonal fluctuations out of consideration.

The “6 month rolling average” is a calculation I use personally to see how many homes are being added in the short term which will affect our overall supply and demand paradigm.

As you evaluate building permit numbers and what they mean for the market you have to remember that they are very much seasonally driven. If building permits drop from August to September that is normal – certainly nothing to get excited about.

However, if building permits dropped from February to March that would indicate very unusual market conditions.

It’s normal for building permits to peak around April or May and then decline gradually until starting to pick up in December or January. They will then normally spike quite quickly in the spring to provide inventory for the higher sales numbers in the summer months.