November 2007
Housing woes continue to impact regional economic growth
Housing challenges including foreclosures, home sales, and new housing starts continued to impact Metro Denver's economy in October, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for November 2007.
Existing home sales in Metro Denver declined 25 percent between August and September, from just over 5,000 homes sold in August to just over 3,700 homes sold in September. The total inventory of unsold homes decreased almost two percent over the month, suggesting that a slower market could be affecting some homeowners’ decisions to sell.
On a year-to-date basis, Metro Denver home sales were down 0.5 percent from the same period last year, and inventory levels were down almost four percent through the first nine months of 2007.
Still, Denver ranked No. 1 among 20 metro areas in the highly regarded S&P/Case-Shiller Home Price Indexes national report, which showed that Denver had the highest home appreciation rate, with an index increase of 0.3 percent, between July and August. Analysts say the Denver market showed earlier symptoms of the nationwide housing downturn and could be one of the first to recover. They caution, though, that additional positive readings are needed to determine if Metro Denver has truly entered a real estate recovery.
"We certainly feel that difficulties on the housing front continue to challenge the region when it comes to consumer confidence and the health of the lending industry," explained Tom Clark, executive vice president of the Metro Denver EDC. "We are optimistic that that we're not as bad off as some of the regions that we compete with for job growth."
There is good news, however, on the commercial real estate front. A recent report by the Urban Land Institute and Price Waterhouse-Coopers lists Denver as the only non-coastal city among top-tier spots for commercial real estate. Metro Denver’s commercial real estate market ranked eighth among the 15 markets tracked in the report, and analysts gave special recognition to the city’s redeveloped urban core and the transit system that links downtown with suburban communities.
Employment in Metro Denver grew by 3,000 jobs between August and September, a gain that is consistent with seasonal patterns in the Denver-Aurora and Boulder-Longmont metropolitan areas.
The Denver-Aurora MSA lost 1,000 jobs over the month, and the Boulder-Longmont area gained 4,000, bringing Denver-Aurora job growth to 1.6 percent year-to-date, according to the Colorado Department of Labor and Employment. The Boulder-Longmont area reported year-to-date growth of 2.9 percent.
Metro Denver job growth has flattened over the past three months, with year-to-date growth of 1.8 percent recorded each month from June through September. Colorado had a two percent employment growth through the first nine months of the year, outpacing the U.S. job growth rate of 1.4 percent.
Recent economic data for Metro Denver reveal that eight of 18 indicators moved in a positive direction for the month, down from 12 positive indicators last month. Twelve of 18 indicators moved in a positive annual trend, down from 13 last month.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.