Summit’s building boom comes with at least 150 fewer contractors
The days when Summit County’s contractors had to plow snow to make ends meet might be a memory, but as business rebounds from the Great Recession, at least one lingering effect remains.
That is, for those local contractors who did survive the economic downturn, many are now fielding more requests for work than they could ever satisfy, and as a result projects are taking longer to complete.
It’s no secret Summit County is in the midst of a record-breaking building boom with the county recently announcing it issued more building permits last year than any other year prior to the recession.
The permits cover everything from spec homes to the luxury housing market and commercial builds. Regardless of the project, however, the number of permits issued in Summit County throughout 2017 skyrocketed to 852 after the county OK’d 710 in 2016 and just 644 the year before that.
“During the recession, many of (the local contractors) were doing small remodels and plowing driveways to keep their businesses going, but now we are seeing lots of new starts and spec homes back in the mix,” states the Summit County Building Inspection Department’s 2017 summary, released at the end of January.
What’s more impressive is the local building community that’s shouldered much of the weight from the building boom has done it with reduced numbers compared to what they were seven years ago.
That’s because there were 720 registered contractors in Summit County in 2010, but only 562 remained in 2017, according to Scott Hoffman, the county’s chief building official.
It came as somewhat of a surprise, but Hoffman said the department didn’t have figures prior to 2010. Still, based on what information the county does have, Summit has lost almost one out of every five of its contractors since 2010.
“There is definitely less of a subcontractor base then there was seven years ago,” said Matt Mueller, director of development at Summit Sky Ranch. “During the recession it appeared that some of the subcontractors chased other opportunities in different industries, like the oil and gas industry or moved to other markets.”
Whatever the reason, Mueller notes that the local building community is feeling the effects, but he’s been “lucky” and “experienced very little attrition with regards to our contractor base.”
Mueller said the initial selection of subcontractors, along with being organized and having open lines of communication about the work happening on-site, helps ensure “a high level of efficiency, which equates to more profitability for the crews in the field.”
At the same time more than 150 local contractors have vanished from the landscape, Summit County’s housing market has shot up across the board in virtually every measurement.
Compared to 2016, the total monetary volume for all real estate transactions rose by 18 percent in 2017, for example. Meanwhile, the overall number of sales jumped 5 percent, and the price of the average single-family residential home rose 16 percent, according to figures previously provided by Land Title Guarantee Company of Summit County.
It doesn’t stop with housing sales and prices, either. In Silverthorne and Breckenridge, estimated sales tax receipts related to building retail and construction were both up between 5 and 10 percent in 2017.
Despite all of that, though, the average sale price of vacant land in Summit County was actually down 8 percent last year compared to 2016.
Many factors are pushing on the market, according to local experts, but one likely reason for the price drop of vacant land is the limited number of local contractors to build on it.
“There is much greater demand than we have people to do the work,” said Chris Renner, owner of Pinnacle Mountain Homes, a Breckenridge-based builder that accounts for roughly a third to a fourth of Summit County’s luxury home builds.
Renner tracks the average length of construction projects in the county through his business, and he said he’s noticed it’s taking longer now to see a project through than it previously did.
“I can tell you projects are going on today across the country, and there are not enough people to do the work,” he said.
A local electrician who asked not to be identified has noticed some of the same problems Renner has.
From the electrician’s observations, pretty much everyone in Summit County struggles to stay fully staffed, and he too sees a serious shortage in the number of workers in the building industry that’s not just limited to builders, plumbers, masons and electricians but runs “the whole nine yards.”
Renner’s company is unique among builders in the sense Pinnacle Mountain Homes creates custom homes with the ability to design, build, furnish and even manage the home as a vacation rental all in-house at Pinnacle.
Explaining how the shortage of workers has affected one of the many aspects of his business, Renner explained that Pinnacle’s design studio has grown from two interior designers to eight in the last 12 months alone.
However, because he’s struggled to find good, qualified designers in Summit County, Pinnacle had to hire four that live and work out of a satellite office in Denver.
Renner said he thinks the problem with finding good labor is directly related to local housing issues, and the rise of short-term rentals has greatly exacerbated the issue.
The leading short-term rental website, Airbnb.com, recently released a list of its top 10 markets in Colorado, and Breckenridge was second only to Denver. Additionally, Keystone and Silverthorne also cracked Airbnb’s top 10, giving Summit three of the 10 most-visited destinations in the state.
For Renner, the rise of short-term rentals here has put a much greater pressure on the housing market.
In turn, the scarcity of available housing affects almost every other sector in the community, including retail establishments, restaurants and even the people who build them.
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