Rumors have been circulating that the housing market is heading for a downturn, but industry insiders said they feel comfortable with the pace at which houses arebeing built and bought.ìThings are going along OK in the residential housing market,î said Doug Woods, vice president of GTL Development in Meridian Ranch. ìItís not a boom; itís not dead. I see no signs of it stopping or slowing down. Itís just steady.îWoods said that GTL is currently grading 375 lots in Meridian Ranch and preparing vacant lots to sell to builders. He said he anticipates an acceleration in the housing market toward the end of 2014 and into 2015, which is when the new homes heís preparing for should be ready.Jody Heffner, Falcon real estate agent, said there is a good market for houses priced at $250,000 or less. ìCustom homes under $250,000 ó those homes will move so builders can build more of them,î he said. ìWhat we have going on right now is a pretty good thing, up to a certain price range.îHeffner said houses above $250,000 arenít selling as quickly. ìIn the Falcon area, Iím seeing things in the area of $250,000 to $300,000 doing some movement, but Iím not seeing a bunch of people putting houses under contract over $300,000,î he said. ìWhat people make and their salaries donít allow them to buy $300,000 and $400,000 homes right now. Builders are doing studies and demographics, so theyíre not just going to be a bunch of homes in that range.îMasterbilt owner Jim Stiltner said he agrees with Heffner that the market is better for homes under $250,000, which is the price point at which his company is building homes. ìUnder $250,000 in the Falcon area, I donít see a lot of specs (speculation homes) out there in the market,î he said. ìI donít think thereís enough houses on the market now. I think itís more of a perception that thereís a lot of houses out there.îStiltner said, as a general rule of thumb, his company and many of the other builders he knows donít build a bunch of spec homes without having buyers on the wings. ìHereís how every builder I know works their stuff: They are continuously trying to keep a certain number of homes going,î he said. ìThey may need to keep 17 to 20 houses going at all times no matter what. You may see houses or a phase of development sitting for six to eight months, but what you donít see is that some other houses have already been bought in another area that theyíre working on. As soon as they have a contract on a house, they start another one.îStiltner said there could be some builders who have backers with money, which allows for aggressive building and multiple homes. However, he said thatís not the standard operating procedure for the majority of the industry.Part of the reason the market for the lower-priced homes appears better than higher-priced homes in the Falcon area is that the overall income level of the area hasnítchanged that much, said Brenden Zahl, president of Peopleís National Bank. ìThe bulk of the highest percentage of the market is not in that high end of the price point,î he said.Zahl said that right now, a personís purchasing power is relatively high. ìBy and large, the federal agencies that guarantee a lot of the loans ó FHA (Federal Housing Administration), Fannie Mae, Freddie Mac and other enterprises ó they have loosened some of their credit criteria to make credit more available for more potential homeowners,î he said. ìThe overall underwriting standards have loosened a little bit in the last year, as people start to try to support housing growth.ìThe flip side is that as interest rates start to increase, we think itís going to inch some of the purchasing power of the buyers and may slow the housing market. As their purchasing power is reduced, it may have an impact on home values. We will continue to see steady sales, not rampant increases in prices; and people will be able to get loans but may have some headwinds there.îZahl said he has noticed that builders are buying lots for building homes at a slower pace, especially in the Falcon area. ìCertain markets like Denver, thereís a lot of demand (for new homes) because jobs are being created,î he said. ìThat job creation is making it, so the market is robust for new builds and existing home sales. The Colorado Springs area is a little slower because jobs arenít created as fast.îWith the national average for interest rates on a 30-year fixed home loan of $200,000 to $250,000 sitting at about 4.25 percent, Zahl said now is as good a time as any to buy a home, especially since there will probably be some upward pressure as jobs are created and the economy recovers, he said.
