Eagle County building activity should stay strong into 2021
Local activity continues despite iffy national outlook
Crystal balls are notoriously unreliable devices. Still, industry forecasters are expecting a mixed bag for the U.S. construction industry in 2021. The story is different in Eagle County.
A look through several industry journals published in the fourth quarter of 2020 shows caution about the year to come.
In a November post, Dodge Data & Analytics predicted a “slow and uneven recovery” through 2021 for the U.S. construction industry, with only residential housing starts exceeding 2019 levels.
That’s a national outlook, though. Smaller markets will show variations. Eagle County is one of those markets.
A quick survey of building officials in Eagle County and the four towns along Interstate 70 shows the local construction industry retaining a brisk pace.
Chris Evans, a co-owner of Avon-based Evans-Chaffee Construction, said that firm is mostly booked up through 2021, with project reservations extending into 2022.
Plenty in the pipeline
Construction starts with local government permission to build, and there seem to be plenty of projects either ready to launch or in the approval pipeline.
Vail Community Development Department Director Matt Gennett said projects there didn’t have much of a slowdown in 2020, despite COVID-19 restrictions.
Town building officials kept working through the pandemic, Gennett said, and applicants were allowed to submit paperwork remotely.
Looking into 2021, Gennett said a couple of large projects are expected to launch this year, including the Marriott Residence Inn and Highline hotel projects in West Vail.
Overall, Gennett said he expects building and approval activity at roughly 2020 levels into this year.
Avon Planning Director Matt Pielsticker said 2021 “appears to be a continuation” of much of the activity started in 2020. The Piedmont apartment project continues into this year, and the new year is likely to see work begin on the final phase of the Westin Riverfront project.
In Eagle, town community development director Chad Phillips said 2021 will bring a mix of individual jobs and larger projects, including single-family and multi-family work at the Haymeadow subdivision and work at the Reserve at Hockett Gulch on the west end of town.
Farther downvalley, Gypsum community development director Lana Bryce said work continues on projects including the Spring Creek Apartments, homes at Stratton Flats and the Patriacca townhomes in the Stratton Flats area. Bryce added that another application is expected for the Buckhorn Valley subdivision.
“People are still asking for approvals and we’re still issuing building permits.”
Prices are rising
Evans said one possible limiter for construction activity is “upward price escalation” on projects.
Increasing prices come from a couple of directions, Evans said.
Locally, the valleys construction labor force still hasn’t recovered from the national economic recession that began in 2008. During that time, the valley lost thousands of jobs, many of which were in the construction industry. Many of the people working those jobs left the valley and haven’t returned even as construction activity picked up, Evans said.
In addition, material prices are going through a “bit of a bubble” in prices, Evans said. That bubble was driven by the pandemic-prompted shutdowns in many industries, especially in the second quarter of 2020.
That resulted in a kind of “artificial lack of supply,” Evans said.
“I think the material cost issue will recover,” Evans said. But, he added, that’s going to depend on how quickly materials return to the supply chain, and whether companies want to completely refill those pipelines.
The material bubble isn’t the only one in play at the moment.
Gennett said he believes the valley’s construction industry is in a bit of a bubble, driven by demand for housing in the valley.
While the valley remains a hot spot, Gennett said “construction will try to meet the demand.”
.9%: Projected decline in U.S. demand for cement in 2021.
7%: Projected increase in value of U.S. housing starts in 2021.
2%: Projected decline in U.S. multifamily housing starts in 2021.
5%: Projected increase in the value of U.S. commercial building starts in 2021.
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