Construction is under way on the first resident-owned home at Alpine Mountain Ranch, just south of Steamboat Springs. The developers also have begun framing a market home that is for sale.

Photo by Tom Ross

Construction is under way on the first resident-owned home at Alpine Mountain Ranch, just south of Steamboat Springs. The developers also have begun framing a market home that is for sale.

April showers bring building flurry across Routt County, so to speak

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The first home being built by a future resident at Alpine Mountain Ranch will be 10,000 square feet. Architected by Miller Hull Partnership, of Seattle, Wash., it has views of North Routt and the Flat Tops from its site on Golden Eagle Drive.

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— A spring flurry of building permits for single-family homes may not signal an enduring recovery of the Routt County building market, but it breaks a trend.

The Routt County Region­al Building Department reported issuing three permits for new single-family homes in April with an aggregate permit value of about $2.8 million. Another permit for a $2 million home was issued during the first week in May.

Throughout the entire first quarter, the county had seen a total of just four permits for single-family homes. Those included two permits in January for a combined $1.7 million, another in January for $190,500 and one in March for $713,000.

Valuations assigned to new homes for purposes of issuing permits are lower than the eventual retail value.

The outlook for single-family homes being built this spring inside Steamboat Springs city limits is even quieter: Through April, just one permit for a single-family home had been issued, and it was an anomaly. The permit was issued after the fact for a very small, existing home in Fairview valued at just less than $75,000.

Of the four new permits in the county, one that stands out is for a 10,300-square-foot home (including a large covered deck) on 5 acres in Alpine Mountain Ranch, just south of the city.

Fair and Square Construc­tion is building the home for a couple from Virginia, Steve and Karen Speer.

Alpine Mountain Ranch and Club Chief Operating Officer Bill Reid said he thinks the renewal of some home building is a sign that prices in the mountain markets have stabilized and that people who have been planning on building realize that contractors and their subcontractors are eager to secure projects.

Steve Speer said this week that he had not planned on beginning construction this year but that the opportunity to engage contractors in a competitive environment prompted him to move forward ahead of schedule.

“I really wasn’t going to pull the trigger this soon, but I’ve been around the area for 25 years and had friends who (in the past) got in line and waited a year or two for a contractor. I realized that I had an opportunity to bid this out and get two or three bids and be competitive.”

Construction on the Speer home is under way this week with the garage framed and about to be dried in so the builders can use it as an office. Another new home nearby that isn’t among the four new permits this spring is in the same stage of construction.

The Alpine Mountain Ranch developers are moving ahead with plans they first made public in late fall 2008 to build a market home that will be offered for sale.

The general contractor will be Corporex, the construction firm of one of the Alpine ranch principals, Bill Butler.

Brian Beck, who owns a local building framing company, has been retained as project manager, Reid said. A local firm, KSA Architecture, designed the home.

The six-bedroom, 6.5-bath home is due to be completed in mid 2011. It is listed for sale for $5.25 million.

Other homes on the horizon include a 7,100-square-foot house planned for a building site on Rolling Ridge Road by a Steamboat Springs couple. It is valued for building permit purposes at $934,000. In addition, a Minnesota couple is planning a $1.66 million home on Timberridge Drive in Big Valley Ranch.

The general contractor is Gary Cogswell, of Cogswell Construction, and the architect is Joe Patrick Robbins.

Cogswell said as soon as word got out that he had landed the contract, he was inundated with calls from people in the building trades seeking work. He added that the list of bidding subcontractors has been finalized and that he can’t accept any more into the process.

“It’s been a rough experience for me to dole out a very limited amount of work here,” Cogswell said. “I feel very fortunate to have a job.”

One of the factors affecting the local construction industry is the fact that people looking for homes in most price points often can find better values on a price-per-square-foot basis in existing homes for sale, some of them distressed.

Generally, one could not build a home today for the price one would pay for an existing home of comparable quality.

“We looked at a lot of the mountain communities for a long time and decided Steam­boat is where we want to be,” Speer said.

Even with competitive pricing, he said, “you can’t pencil it out — building a new home doesn’t make sense in some ways. But I’m here for the long haul. We don’t have a timetable, but my wife and I want to retire here.”

The Speers had their home designed by a Seattle firm, Miller Hull Partnership, in part because of a family relationship. But they consulted with Bill Rangitsch, of Steamboat Architectural Associates, and Speer said he wants to keep the employment created by his project in the valley.

“Pretty much everything is local — for me, personally, that was important,” he said.

— To reach Tom Ross, call 871-4205 or e-mail tross@steamboatpilot.com

Comments

Scott Wedel 4 years, 3 months ago

Was this a story lifted from The Onion in which the editor failed to recognize the sublime satire? A flurry of activity is 3 building permits in a month? seven for the year?

And it cannot be easy to write a story like this and resist the urge to compare this year to some previous year. Any comparisons to previous years would result in a "Down 90+%" headline, but now apparently zero new construction is considered the norm so any activity constitutes a flurry.

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aichempty 4 years, 3 months ago

Scott,

I think this is much more like a giant bug on the windshield of the real estate market collapse.

This isn't about housing people. It's about a few people who can afford to build their dream homes.

If rich people can still afford to build homes here, then some less successful people will also be able to buy the more affordable homes (like mine) which are practical for retirees or people who want a second home in the mountains. We are fortunate to live in a place where people still want to buy in when they can.

I was once told that the "idea" is to own the most affordable home in the nicest neighborhood in town. Those who didn't get caught up in the bubble will still make some money in the long run once the "blizzard" of foreclosures melts in another 3-4 years. In the meantime, Steamboat is still a nice place to live compared to 99% of the other towns in the United States. People will want to move here. We'll be okay, except for the realtors, construction workers and most others who have been living on the "churn" in the housing market for the past few years.

A super secret fact upon which we all rely is that living in an expensive town tends to keep out the riff-raff. Compare our murder rate to the small towns where it's cheap to live, and the differences are readily apparent. So far, it's been worth it to put up with all the local socialism and liberal silliness, because violent crime is not an issue. Outsiders looking for a refuge from the squalor elsewhere will always want to live here, and in a town of only 10,000 or so residents, there are plenty of other Americans among our 300,000,000 citizens who will have the money to move in.

It's been a long time since I sat up all night with a loaded shotgun to protect my home following a drug-related murder in the unit directly over mine. The people who left for the night -- some to escape talking to the police or having to come up with an excuse for why they could not invite the detectives inside while answering questions -- returned the next day to find their doors broken and their apartments ransacked. I moved out (it was the end of the month) and the building manager quit, and nobody ever mentioned the lease to me after that. People around here who have not dealt with these issues in their own lives don't appreciate what they have, but take it from me, there's a family somewhere that can afford to buy your house for what it's worth today, and would do so except for the job that keeps them elsewhere.

As our prices fall due to foreclosures, new people will move in to absorb the inventory in the more affordable and desirable areas. The market is going to recover faster than we think, but not in time to avoid changing the fundamental makeup of our population. Money talks, fair or not, and things are going to be different from now on.

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John Fielding 4 years, 3 months ago

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Aich,

Your points are important, valid and well presented.

I agree almost completely

And including the firsthand account was very compelling..

I am glad you have not stopped contributing.

.

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Ken Reed 4 years, 3 months ago

Nice post and perspective Aich. I hope you're right about the market recovering faster than we think. I can't think of a better place to ride the market out than Steamboat. I also think part of the "fundamental makeup of our population" changing will be from folks who are still working but can live anywhere (location neutral types like myself) and people who are looking for second homes like Speer in this article. It's still hard to see people landing jobs here and being able to afford a home for quite some time. If you can live anywhere and can afford it, this is a great place to be.

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aichempty 4 years, 3 months ago

I was living in the east after leaving the Navy when I decided to move to Steamboat. Peace had broken out, employment for defense related work was in question, and property values were falling.

Out here, you could buy a house in Steamboat II for between $100,000 and $130,000 at low interest rates. The cost of utilities and taxes combined with lower purchase costs enabled a number of people I knew at the time to purchase second homes here in anticipation of early retirement, or to relocate and try something new. The annual outlay just for the house I lived in back east was equal to my annual cost of living here. It was a very attractive situation at the time for people who had saved enough money live on while getting established out here. The "down payment" which reduced the cost of housing was the thing that made it possible to relocate here and go into business. The thing which did not turn out to be true was that people in Steamboat were honest and supportive of each other. The local culture was not supportive of local business. Substance abuse in the workforce eliminated a lot of productivity, and many employees regularly stole from the business. You live and learn.

However, where there's a will, there's a way, and I had to leave for a while before coming back, sadder and wiser.

There were two events which originally convinced me to take the plunge. One was a carjacking near the place I worked, where the 'jackers killed a woman trying to hang on to the outside of the vehicle and threw her infant out of the car. The other was an armed robbery in the nearby strip mall as hoodlums from the inner city branched out to the suburbs. Even then, more than a year after moving out here, a friend from back east was stabbed to death in his office downtown (he was a landlord with many rental properties; he was robbed the day most people came in to pay their rent in cash).

So, yeah, we have our tiny little problems around here, most of them due to weaknesses of human nature, but at least the drug use hasn't led to violence around here -- yet. High prices for homes, the cold climate, and our remote location have helped keep us safe despite our drug problems. You can't live on the street here during the winter.

Steamboat is evolving into a place where working people can't afford to live, but the same thing has happened in other towns all over the country. It's the course of nature.

So, our population is going to change, whether for the better or the worse, because people with money will compete to live here. That's just how it is.

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Scott Wedel 4 years, 3 months ago

But there are not that many people living in an apt below dangerous drug dealers that can buy here in this difficult job market.

And location neutral people have a huge variety of options because most all resort areas are selling at a discount. Many location neutral people, such as consultants, are quite sensitive to the general economy and it was easier for them to move here during the boom than now. Some of them are pulling back now and leaving the area.

I think location neutral people will be important part of any local recovery, but I do not think it is going to be quick.

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aichempty 4 years, 3 months ago

Scott,

My experience with the murder was during my senior year of college. Still, something like that sticks with you. We've had worse around here with affluent families involved, but it was one in ten years, not ten a month.

Valley boy,

Oh, you are right. Our market is nowhere near recovery. I was saying that when people are able to buy again, we're in a great area to lead the resort home recovery. No hurricanes, no violent crime, etc.

$200 a square foot is well under replacement cost. $250 might be competitive if there was a demand. Prices for new construction are not going to fall because wages and building material costs, fees, etc., are not coming down. They can't. It's not worth supplying the labor and materials for less than the return to the builder.

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Scott Wedel 4 years, 3 months ago

Aic, Local replacement cost is a funny number. I do not understand why replacement cost in Stagecoach or Oak Creek is quoted as being $50 a sq ft more than it is for Craig. Material and labor costs should not be that much different.

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aichempty 4 years, 3 months ago

Replacement costs, for insurance puposes, are based on "average construction cost" in the area.

Several things apply which may affect the cost. Foundations are a big one. Routt County's "expansive clay soil" may not be as big a factor in Craig. Since clay holds water and then expands when the soil freezes, it puts tremendous pressure on foundations and requires them to be more heavily reinforced with steel, use a stronger mix (more "sacks" of portland cememt per yard to increase strength), and be significantly more expensive than a foundation which does not have to stand up to the same "side" pressure. Sandy soil which drains better and holds less moisture requires a less robust foundation design.

Snow loads are also important to consider. Everything from the foundation up has to be built stronger to hold the snow which is assumed to fall and then stay on the roof.

A typical interior floor load factor is 40 pounds per square foot. The Moffat County building department website lists 40 psf for roof loading, but "can be greater at higher elevations." Roof loadings can range from around 90 to 120 from Steamboat up past Clark. Just the difference in roof snow loads is plenty to account for differences in construction costs. Footers have to be wider, walls have to be thicker, studs have to be larger and spaced more closely, roof trusses have to be built more heavily and spaced closer, roof decking has to be thicker.

Craig sits at 6186 feet above mean sea level (MSL). Both Stagecoach and Oak Creek are about 7,400 MSL.(7450 and 7414, respectively). A difference of 1200 feet in elevation is significant because of the temperature lapse rate, meaning that for every 1000 foot change in elevation, the air gets 3 degrees Centigrade colder. It's easy to see how this makes a difference if you drive from the Clark Store to Hahn's Peak, where the elevation changes from around 6,500 feet to 8000 feet and up in the three miles of CR-129 just north of Clark. So, a system that rolls through and drops rain on Craig can easily drop snow on Stagecoach, Steamboat, Clark, Hahn's Peak and Oak Creek and lead to more build up of snow loads. When it's 32 F in Stagecoach, it should be more like 39 F in Craig. Snow loads are based on historical data also, and Craig is obviously more arrid than Stagecoach or O. C. when it comes to snowfall.

So, there's much more to the issue of cost than meets the eye, and aside from aesthetic concerns in a resort area that lead to higher costs and so to higher average replacement costs for insurance puposes, foundation design and roof loading can easily account for the difference in cost.

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aichempty 4 years, 3 months ago

valley boy,

I think the word you are looking for is, "prejudice."

Appraisers are under pressure to lower their valuations because of the housing bubble bust. That still has nothing to do with actual costs for construction, and reasons why it's more expensive in Routt County than Moffat County.

Perhaps the reason we're only seeing luxury home permits is that the people having them built are paying cash or using private financing. Right now, just about anyone who would want to build a new-construction home in areas of Routt County with high snow-load requirements would be unable to finance the cost because market values are below the cost to build.

Material costs in the past have been about 1/3 the final market price. The split is 1/3 material, 1/3 labor and 1/3 profit. Material and labor are not getting cheaper; they're just becoming unavailable at a cost that will allow builders to make a decent profit.

While the situation is currently bad for homeowners with low equity and high mortgage rates, it will eventually result in fewer "affordable" (middle class professional) second and retirement homes, which will bring a shortage and higher prices down the road. The period between when prices start to rise from demand and when builders start to have units ready for sale will be the time for current owners to sell.

FYI, I have no current interest, financial or otherwise, in what it costs to build or buy a house around here. I know what I know about the costs because I have built houses in Routt County and been as shocked by them as you are, but the physical characteristics of homes which will be safe to occupy in this area have nothing to do with appraisals or market prices. Things are cheaper in Craig and on the Front Range because they don't have to be built to hold the snow loads and deal with the poor soil (which is why we have to have 36 acres to support a well and septic tank system in the county). If you could build exactly the same house in Routt County that you can build in Craig, then you're right; the costs would differ mostly because of the cost of the land underneath.

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