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Demand for new homes is growing across the county

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Photo by Pat Sunderland When the housing market bottomed out in 2008, Lynn Tallent began building custom homes like this new residence in The Meadows. Now he and other builders are venturing back into spec homes.

The City of Delta has issued 16 building permits for new single family homes this year, outpacing the combined total of permits issued in 2017 (six) and 2016 (seven).

Delta County is seeing a similar increase, although new homes in unincorporated Delta County are measured not by building permits, but by septic permits. Ken Nordstrom, environmental health director for the Delta County Health Department, reports a total of 109 permits in 2018, including 87 for new construction -- the most since 2008.

With 58 (30 new) permits in 2012, that year was the lowest since the permit process was instituted in 1972. The numbers have steadily been climbing since then -- 72 total in 2015, including 48 new; and 76 in 2016, including 51 new.

"Things are looking up!" Nordstrom said.

In Delta, Steve Gerow of SWG Enterprises decided to test the market with two new spec houses in Stone Mountain Village. "I had no idea what the market would be like, but we got quite a few lookers and contracts on them right away. That tells me there's demand for new housing so I'm going to build a few more."

He also builds houses in Grand Junction, which he says has a pretty active market. He's not sure what's driving the demand for new housing, but speculates Delta might be drawing the overflow from Montrose and Grand Junction. The two houses in Delta sold for about $250,000, which is comparable to prices in Grand Junction but a bit more affordable than Montrose.

Lynn Tallent started building homes in 2000 but moved away from spec homes when the recession hit in 2008 and the market was flooded with foreclosures.

"We evolved into custom homes and that's what kept us going all these years," Tallent said. "I think in 2008, we dropped from 30 to 40 homes a year to just three, but those three kept us going."

Now Tallent is venturing back into the spec home business with two houses going up in the Fox Hollow Subdivision. "We're starting to get back into spec homes because there's a lack of new home stock in town," Tallent said. "It's almost non existent."

Between projects in Delta and Montrose, he said he's doing about 70 percent custom houses and 30 percent spec houses.

Nearly all his custom clients are retirees who are coming from the Front Range and finding they can move into a new custom-built home that's a great value compared to what they sold in Denver.

His biggest challenge now is finding skilled workers. Due to a lack of qualified labor, the national average for a home build is now 8 to 10 months.

Tallent said he's fortunate to have a good crew that's been with him for years, but he recognizes that as the average worker approaches retirement age, the construction industry is facing a huge shortage. That's creating a competitive environment that's driving up prices for subcontractors -- and for the finished product.

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