Colorado Outperforms U.S. Economy, State Outlook Strong

Posted by RE/MAX of Boulder on Wednesday, August 23rd, 2017 at 10:36am.

Colorado’s economy is among the strongest in the nation, in fact outperforming the nation as a whole in 2016, report analysts with the Business Research Division at the CU Leeds School of Business.

Given the state of the nation’s economy, that is saying a lot. The United States is currently experiencing the longest economic expansion following a major economic contraction in its history, according to the Mid-Year Economic Outlook published in the Colorado Business Review by CU Leeds Business Research Division.

The nation’s economy overall is strong: the country is at full employment with an unemployment rate of 4.3 percent personal income grew 3.4 percent in 2016 and asset values are up.

Colorado's unemployment rate underscores the robust economic data. Colorado’s 2.3 percent unemployment rate is the lowest the state has seen since data were recorded in 1976, as well as the lowest in the nation. Cities across the state with the lowest unemployment rates are:

-          Fort Collins-Loveland, 2.1 percent

-          Boulder, 2.3 percent

-          Greeley, 2.5 percent

-          Denver-Aurora-Broomfield, 2.5 percent

The low unemployment rate does have a downside – few people looking for jobs make finding skilled workers a challenge for businesses. In fact, finding employees is the number one challenge facing Colorado’s economy in 2017, reports the Q3 2017 Leeds Business Confidence Index survey.

In 2016 real GDP, Colorado was the tenth fastest-growing state and the eighteenth largest overall with an annual real GDP growth rate of 2 percent. The report concludes the three largest industries for GDP were Financial Activities at 19.1 percent; Trade, Transportation, and Utilities at 15.7 percent; and Professional and Business Services at 2.3 percent.

The top three fastest-growing industries in 2016 were Information at 8 percent, Construction at 5.3 percent, and Education and Health Services at 4.9 percent. Real GDP decreased for Natural Resources and Mining.

Though fast growing, the construction industry—including residential, nonresidential and nonbuilding—shows a 0.4 percent year-over-year decrease as of June 2017. But experts say the issue is one of the timing of the data, rather than one of weakness.

Key contributors to the current construction lull in residential include the tightening of lending for multifamily homes. The Mid-Year Economic Outlook found that lenders are concerned that multifamily housing is oversaturated, especially high-end multifamily properties. In 2016, permits issued for multifamily totaled about 17,000. Of these new permits, 40 percent were issued in Q4 2016 and approximately 88 percent of these were in the greater Denver-Boulder area.

In addition, construction experts affiliated with the Mid-Year Economic Outlook say fewer units are being planned. Expectations are for residential construction to decrease in early summer 2018. Factors affecting the slowdown include:

- Millennials are beginning to look for properties to purchase

- Property values have decreased as construction moves from prime downtown locations to the edges of the city where property values are less.

- Total construction activity, as measured by dollar value of projects, will not increase in the next few years.

Data suggest a slowdown in single-family home construction began in June 2017. Experts say this can be attributed to the timing of the data currently available: closed contracts on future permits increased by 8 percent as of April 2017. The expectation is that those future permits will lead to an increase in single-family construction. The CBR report says overall the construction industry in Colorado remains strong.

As in other industries, the main restriction on growth for the construction sector is a shortage of skilled labor.

The Colorado Business Review is a quarterly publication of the Business Research Division at CU Boulder. For the full report visit http://www.colorado.edu/business/sites/default/files/attached-files/cbr_2017_issue_2.pdf

3 Responses to "Colorado Outperforms U.S. Economy, State Outlook Strong "

Colorado Cities Rank High in Best Housing Markets Analysis wrote: [...]Thirteen Colorado cities – including two in Boulder County – ranked among the Best Housing Markets in the U.S., according to WalletHub’s report released in August, 2017.
The report compares 300 small, mid-size and large U.S. cities across 21 key indicators of “Real Estate Market” – which ranked housing-market attractiveness and “Affordability and Economic Environment.”

Each dimension was evaluated with weighted metrics, listed below, and then graded on a 100-point scale, with a score of 100 representing the healthiest. The cities were then rank-ordered.
Most of the metrics fall in the real estate market category.
Real estate market metrics are: home value forecast, median home-price appreciation, average days for selling, share of homes selling for a gain, share of ‘underwater’ homes, home sales turnover rate, ratio of rent price to sale price, foreclosure rate, share of delinquent mortgage holders, number of bank-held homes, vacancy rate, buy vs. rent breakeven horizon, share of young homes, and building-permit activity.
Affordability and economic environment metrics are: housing affordability—which is the only metric that received double weighting, maintenance affordability, population growth rate, job growth rate, unemployment rate, underemployment rate, median credit score.
Longmont ranked 13th and Boulder 104th in the real estate market. Both areas have seen steady price appreciation that outpaced the national rate. Boulder, in fact, tops the nation for strong and stable price appreciation, according to SmartAsset’s annual analysis of best housing markets for growth and stability.
Boulder ranked No. 5 in the category of lowest foreclosure rate following Bellevue, WA; New York, NY; Sunnyvale, CA; and Ann Arbor, MI in the No. 1 position.
But both cities ranked lower for affordability and economic environment, with Longmont at 160 and Boulder at 271. Affordable housing is an ongoing topic for city and county government, which has become more challenging as home prices have risen. However, the area—and entire state— is noted for its strong jobs market and sound economy. Colorado’s economy is among the strongest in the nation, outperforming the nation as a whole in 2016, report analysts with the Business Research Division at the CU Leeds School of Business.

Source: WalletHub, Washington, D.C.-based financial analyst site, https://wallethub.com/edu/best-real-estate-markets/14889/ 
You can read:

Full WalletHub report at https://wallethub.com/edu/best-real-estate-markets/14889/,
Article on Boulder topping the nation for strong and stable price appreciation is here: http://www.boulderco.com/blog/boulder-no-1-for-most-stable-housing-market-three-years-running.html
Article on Colorado’s economy is here: http://www.boulderco.com/blog/colorado-outperforms-us-economy-state-outlook-strong.html[...]

Posted on Tuesday, September 26th, 2017 at 10:35am.

Colorado Cities Rank High in Best Housing Markets Analysis wrote: [...]
 Article on Colorado’s economy is here: http://www.boulderco.com/blog/colorado-outperforms-us-economy-state-outlook-strong.html

 
 
[...]

Posted on Monday, October 16th, 2017 at 3:11pm.

Colorado Cities Rank High in Best Housing Markets Analysis wrote: [...]
 Article on Colorado’s economy is here: http://www.boulderco.com/blog/colorado-outperforms-us-economy-state-outlook-strong.html

 
 
[...]

Posted on Monday, October 16th, 2017 at 3:11pm.

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