Denver Economy
Denver Colorado Economic Indicators
By: Larry Hotz
Population for the state of Colorado is expected to hit 5 million people in the year 2008. That´s just 11 years after it hit the 4 million mark. While the nation is growing under 1 percent a year, Colorado´s growth rate is 1.4 percent and is forecast to be 1.8 percent shortly.
Of course, that iscausing all of this expansion in Colorado. Obviously there are many factors. Colorado is no longer an energy-centric economy like it was in the 1970’s and 1980’s. While technology and telecommunications companies are still prevalent, the state’s economy is not dependent upon this sector either. We are broadening our horizons.
For example, Lockheed Martin and Boeing have announced the "United Launch Alliance" with an expected thirty-eight
hundred workers in five states and it will be head-quartered here in Jefferson County. About 1,000 technicians and engineers will be transferred from other facilities around the United States into the Denver Metropolitan area over the next two years according to the company. This unique joint project was approved at the end of last year by Justice Department which ruled anti-trust concerns were trumped by national defense needs. High level executives, technicians and engineers will be seeking housing in the Denver area. My firm, The Kentwood Company, has been chosen to be among those firms that will be assisting in this massive relocation effort.
Overall, Metro Denver job growth is running at almost two percent per year. And, Colorado ranked 15th in the country for the percentage of jobs added during the second quarter of 2006. Denver´s unemployment rate in September decreased to 4.3 percent. That´s 1% below the same period last year and the national rate of 4.7%.
Federal Express has selected Commerce City, a Denver suburb, for the creation for the second largest rate distribution center. The 170,000 square foot facility will be completed by November of 2007. That will provide even stronger employment in the northern suburbs of Denver.
The Metro Denver Convention and Visitors Bureau has booked this year 842 future meetings and conventions. This puts 2007 on a pace to become the best year ever for the convention business in Denver. Of course, Denver will host the National Democratic Convention in 2008.
Still, home sales are soft in the Denver Metropolitan area. Sales were down about 5 percent in 2006 compared to the previous year. The average price of a single-family home in the metropolitan area decreased to $309,000, but that is 3.7 percent higher then a year ago. It´s not that home prices are actually increasing. Rather the mix of homes is now being skewed toward higher end homes. Our firm, the market leader in home sales over 1 million dollars, has seen homes in that price range actually increase this year over all previous years. Homes priced below $700,000 had been hit the hardest in the metropolitan area.
The new $700 million dollar "RidgeGate Town Center Complex" will begin construction in February 2007 in Lone Tree, a south Denver suburb. It will feature retail, lofts and office space. Patio homes, town homes and some single-family homes are being completed and sold there now. It will be connected to the light rail system by 2009.
All in all, the economic future for Denver remains bright. Whilehousing market is still only fairand good values exist in the Denver housing market, the question is when will housing rebound? Inventories of single family homes have declined by 20% since September, 2006. If this trend continues then Denver could see a rebound in the housing market in the near future.
Overall, Denver housing has not suffered as much as "bubble" markets in California, Florida, Arizona and the east coast.
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