Strong Colorado Economy

by Larry Hotz,
Luxury Home Specialist

Well, it’s time to celebrate! Let’s break out the beer and have a toast to the fact that Colorado has finally regained its position as it the leading manufacturer of beer in the country. We are best known for Coors beer but now it is only a part of Colorado brewing. Plus, retail sales are up. Residential and commercial vacancy rates are down and Denver and Colorado are outperforming the nation in most economic areas.

When I was in college, Coors beer became the popular rage all over the country. Before it was nationally available, my friends would ask me to bring them a case of Coors beer when I would visit. Well, now Coors is nationally distributed, it is a joint venture along with Molson of Canada and Budweiser has moved into Colorado to brew beer as well.

This combined with all the micro-breweries throughout the state has brought the Colorado production above California for the first time in more than a decade.

Metro-Denver unemployment has increased 1.8% over the year go period. This is a stronger job growth than the national average of 1.4%. Job growth is strongest in professional services, health and education. The metro-Denver unemployment is now 3.7%. A year ago today was 4.6%. Now, our unemployment rate is among the lowest in the nation. Then power says that 23% of Denver area employers will add workers in the 4^th quarter of 2007. 26% of those same metro-Denver employers added employees during the 3^rd quarter.

Retail sales in the metropolitan Denver area have increased 9% for the 1^st half of this year. Retail sales overall are running ahead of the same period last year.

Residential rental homes and apartments have become difficult to find in this Denver real estate market.  The Denver vacancy rate has dropped to 4.7%. Average rental prices have increased over 10% from the same period last year. Many landlords now are not listing their properties with rental agencies because it is extremely easy to rent a property in this Denver market. More and more investors are beginning to look at Denver as an investment property opportunity.

Vacancies in commercial office space are also down. The market average is now 12.9%. Leases for office space now average $19.60 per square foot. That is the highest since 2002. More office space is coming onto the market. 1.7 million square feet will be available within the next 9 months. Industrial space is becoming more plentiful with 1.87 million square feet for industrial space under construction.

Overall the Denver economy is very healthy. Then gross product for the Denver metropolitan area is now at 3.9% for the year. And person income is up over 3.5% for the year.

The Denver and Colorado economies are healthy. That bolds well for the future of the Denver residential real estate market. Overall, our activity has not slowed down as much as the major markets which have experienced “the boom” such as in California, Arizona and Florida. We’re crossing our fingers. We’re hoping that because we did not have such a housing boom we won’t go through bust here either.