The trend is most pronounced in the inventory of lots with price tags that allow homes to be priced in the low-$200,000s, according to Don Marostica of Loveland Commercial, LLC.
His company typically purchases lots under $20,000 in order to sell its homes at prices between $190,000 and $225,000, Marostica said.
Loveland Commercial has about 60 lots left in its possession, and is building between four and six homes per month. In other words, it'll run out of lots in about a year.
Low-priced lots are also becoming harder to find in Fort Collins, Marostica said, though Greeley still has plenty of lots at that price.
Marostica considers the homes his company builds to be "affordable," but worries that it won't be able to continue doing so for much longer, at least not west of Interstate 25.
"(Selling homes at) $300,000 to $400,000 is not what we do," he said. "But maybe that is the new affordable."
In all of Loveland, 820 lots were permit-ready as of Feb. 17, according to the city's tracking reports.
The city's report doesn't include pricing information, but Marostica estimated there were fewer than 200 lots that he considers "affordable" in Loveland.
Demand, of course, has played a role.
The housing market in Loveland has picked up in recent months, with home prices and number of homes sold both on the rise. Existing inventory is shrinking, so new homes are once again becoming a necessity.
At the end of 2011, new construction was up 20 percent in Loveland and the market had experienced a 207-percent increase year-over-year in lot sales, according to Ceri Anderson of The Group Inc.'s Centerra office.
Another developer of affordable homes, Jammie Sabin of Aspen Homes of Colorado, said that his company has just about 20 lots left.
Building economical homes is becoming more and more difficult to do, Sabin said.
Sabin defines an affordable home as one costing $250,000 or less. The average price of a home in Loveland in 2011 was $232,801, according to The Group.
Aspen Homes' affordable development in Loveland is called Enchantment Ridge, Sabin said. Homes there can be found for as little as $168,000.
The increase in the price of lots in Loveland is a result of the market recovering from the recession, Sabin said.
When the recession began and builders were forced to abandon projects, many banks ended up with the properties on their books. Those properties were later sold out of foreclosure at rock-bottom prices, also depressing the prices of other lots that were not in foreclosure.
Now, inventories and foreclosures are headed back down, so prices are bouncing back up.
Nathan Klein of Loveland Commercial echoed some of these sentiments at a recent panel discussion at an event sponsored by CSU's Everitt Real Estate Center.
Klein estimated that within 12 to 18 months, more lots will have to be developed from what is raw land now in order to build speculative homes for those who need a home without delay.
"It's much easier to sell a house than it is to sell a lot," Klein said.
The increase in home sales in Loveland has resulted in more competition for lots, which also contributes to driving up prices. While the number of homes sold is nowhere near the numbers seen in 2004 – when 2,162 homes were sold in Loveland – the number did increase 5 percent in 2011. That increase represents the first uptick in sales since 2005.
Year-to-date as of April, the number of homes sold in the metropolitan statistical area of Loveland and Berthoud was up 12.7 percent compared with the same period a year earlier.
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