By Will McDermott
What the locals say
Business is good in Colorado.
By just about any measure, Colorado’s economy is thriving. The Centennial
State — the nickname Colorado earned by becoming the 38th state in 1876,
100 years after the signing of the Declaration of Independence — had the
third-lowest unemployment rate in the nation as of this past October and the
third-fastest growing home prices as of second-quarter 2017, according to the
most recent quarterly business report from the Colorado Secretary of State.
In addition, the annual economic outlook published by the Leeds School of
Business at the University of Colorado, stated that Colorado ranked fourth in
the nation in real GDP (gross domestic product) growth in 2015 and eighth in
employment growth in 2016. It’s no wonder that U.S. News and World Report
ranked Colorado No. 1 in terms of its economy in its most recent rankings of
best states. The Centennial State came in No. 9 overall, with top- 20 rankings
in infrastructure, health care, education and government, in addition to its
According to Colorado Governor John Hickenlooper, the state’s booming economy comes from efforts to make Colorado business-friendly
“We worked very hard to reduce red tape to try to attract young entrepreneurs,” said Hickenlooper during an interview on CNBC this past June.
Those efforts have definitely paid off for the state. Over the course of the
12 months ending this past September, a total of 115,313 new businesses filings
were recorded in the state, according to the Secretary of State report, a 6. 7 percent year-over-year increase. From 2010 to 2014, 36.2 percent of all Colorado
businesses had been in business for five years or less, according to the Leeds
report, the seventh-highest concentration of “young firms” in the nation.
New businesses bring new jobs. The state added about 45,800 jobs in the 12
months ending in August 2017, according to the Secretary of State report,
which is just shy of the average of 47,000 jobs added per year from 2010
to 2014, according to the Leeds report. The banner years for Colorado job
growth, however, were 2015, when 76,300 jobs were added, and 2016, when
54,900 jobs were added, according to the Leeds report.
A large percentage of these jobs are being added in the educational and
health services and in the leisure and hospitality sectors, according to data
from the U.S. Bureau of Labor Statistics. Employment in these two sectors
— the third and fourth largest nongovernment employment sectors in the
state — increased by 34. 7 percent and 22 percent, respectively, between
2008 and 2017.
All of this job growth and prosperity is putting pressures on population trends
and prices in the state. Colorado’s population increased by nearly 100,000 in
2015, according to the Leeds report, with about 70,000 of that increase coming from migration — people moving into the state looking for opportunities. Colorado prices rose by 3.1 percent in the first half of 2017 according to
the Secretary of State report, with shelter pricing increasing by 5. 3 percent as
demand for housing continued to outstrip supply in the state. n
Home sales and prices
The number of single-family homes sold in Colorado and the median
sales prices of those transactions have risen dramatically over the past
seven years, according to data from the Colorado Association of Realtors.
Home sales went from 58,279 in 2011 to 83,329 in 2016 — a 43 percent
increase — and in 2017, as of this past October, were on pace to top the
2016 total. Annual median sales prices on single-family homes increased
58. 6 percent over the same time frame, going from $211, 175 in 2011 to
$335,000 in 2016. As of this past October, the annualized median sales
price on a Colorado single-family home was $356,860.
The average sales price of a Denver-area home in April 2017 topped
$439,000, according to a report by the city’s ABC News affiliate, Denver 7.
This price is 40 percent above pre-recession, bubble-era levels, according to the report.
Colorado Single-Family Home Sales
Source: Colorado Association of Realtors
Single-family homes sold Median sales price
*Y TD through October 2017
President, Firelight Mortgage Consultants
“Home prices are on the high end here in the Denver metro, and
when working with a typical blue-collar worker — you know a
teacher, police officer, or firefighter — they are being asked to
spend a pretty good chunk of their monthly or annual income
on housing. So, working on getting attainable housing that is
priced appropriately for our workforce is something we’re trying
to work on and tackle that issue.”