Patty SilversteinPresident, Development Research Partners
Economist, Metro Denver EDC
Cycles:2018 Economic Forecast for Metro Denver
January 31, 2018
© Can Stock Photo / kgtoh
In Partnership with:Prepared by:
Employment Gains/Losses by Year
-120-100
-80-60-40-20
020406080
100
Thou
sand
s of J
obs
Recession Colorado Metro DenverSource: U.S. Bureau of Labor Statistics.
2017e=DRP estimate; 2018f=DRP forecast
2018fCO +50,500
Metro Denver +31,400
Employment growth varies across the state
-0.3%
1.1%1.9%2.0%
3.2%3.9%
1.9%1.5%
-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
Grand JunctionPueblo
Colorado SpringsMetro Denver
GreeleyFort Collins
ColoradoU.S.
Nonfarm Job Growth Rates by Metro Area, preliminary 2017
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics.
2016 Jobs Relative to Pre-Recession Peak Recession Years: 2007-2009
Source: Colorado Division of Local Government, State Demography Office.
Key Metro Denver and Northern ColoradoIndustry Clusters
• Aerospace• Aviation• Beverage Production• Bioscience
• Medical Devices & Diagnostics
• Pharmaceuticals & Biotechnology
• Broadcasting & Telecommunications
• Energy• Fossil Energy• Cleantech
• Financial Services• Banking & Finance• Investments• Insurance
• Healthcare & Wellness
• IT/Software
Metro Denver and Northern ColoradoIndustry Clusters, 2015-2016
Source: Development Research Partners.Full reports at www.metrodenver.org
Consumer Activity Cycles
© Can Stock Photo / Kzenon
© Can Stock Photo / photograffics
Metro Denver Annual Change in Population
-10,0000
10,00020,00030,00040,00050,00060,00070,000
1990 1995 2000 2005 2010 2015 2020 2025 2030
2018 Population = 3.22 MillionNet Migration Natural Increase
Source: Colorado Division of Local Government, State Demography Office.
Percentage of In-Migration by those ages18-34 years (roughly, the Millennials)
0%
10%
20%
30%
40%
50%
60%
Atlanta Austin Dallas Denver Phoenix Portland Salt LakeCity
Seattle
Source: U.S. Census Bureau, 2016 American Community Survey.
Consumers Are Confident & Spending
-15%
-10%
-5%
0%
5%
10%
15%
0
20
40
60
80
100
120
140
160
Reta
il Tr
ade
Grow
th R
ate
Cons
umer
Con
fiden
ce In
dex
Metro Denver Retail Trade Growth Mountain Region Consumer Confidence
Sources: Colorado Department of Revenue; The Conference Board.2017e=DRP estimate; 2018f=DRP forecast
Metro Denver ranked #14 and Boulder #7for highest median home price in 3Q 2017
$197 $172 $173 $166 $177 $197 $209 $224 $236 $247 $260$219 $220 $232 $231 $252 $281 $310
$354 $384 $413 $433$360 $346 $358 $353 $384 $372 $391
$454$512
$563$602
$0
$100
$200
$300
$400
$500
$600
$700
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018f
Median Home Prices (in thousands)
United States Metro Denver Boulder
Source: National Association of REALTORS.2017e= DRP estimate; 2018f=DRP forecast
Apartment Vacancy and Rental Rates
$800
$900
$1,000
$1,100
$1,200
$1,300
$1,400
$1,500
3%
5%
7%
9%
11%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f
Monthly Rental Rate
Vaca
ncy
Rate
Metro Denver Vacancy Rate
Source: Denver Metro Apartment Vacancy & Rent Survey.2018f=DRP forecast
Multi-family represented 52% of new construction in 2017 (30+ year average = 28%)
0
5,000
10,000
15,000
20,000
25,000
30,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018f
Metro Denver Building Permits*Multi-Family (5+ units)
* The Census Bureau tracks building permits by the number of housing units in the structure.Source: U.S. Census Bureau, Building Permits.
2017e = DRP estimate; 2018f=DRP forecast
Commercial Real Estate Cycles
© Can Stock Photo / photostocker
© Can Stock Photo / joreks
Cycle Monitor – Dr. Glenn Mueller,Black Creek Group
4Q 2017
Vacancy Rate: 9.8%
Full Service Rent: $26.24
Completed: 3.0 MSF
Under Construction: 5.1 MSF
Source: CoStar Group
Source: Black Creek Group, Cycle Monitor, Third Quarter 2017 Analysis.
Denver Office at 7 for past five quarters,up from 4 during 3Q 2014
4Q 2017
Vacancy Rate: 3.9%
NNN Rent Direct: $7.61
Completed: 5.3 MSF
Under Construction: 5.8 MSF
Source: CoStar Group
Source: Black Creek Group, Cycle Monitor, Third Quarter 2017 Analysis.
Denver Industrial moved to 13after being at 11 or 12 since 1Q 2014
4Q 2017
Vacancy Rate: 4.3%
NNN Rent Direct: $17.95
Completed: 1.6 MSF
Under Construction: 1.5 MSF
Source: CoStar Group
Source: Black Creek Group, Cycle Monitor, Third Quarter 2017 Analysis.
Denver Retail moved to 11after being at 10 for past six quarters
New Commercial Real Estate Added in Metro Denver
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018f
Mill
ions
of S
quar
e Fe
etOffice Industrial Retail
Source: CoStar Realty Information
Influences on Metro Denver’s Economic Cycles
Challenges• Hard to find workers• Rising interest rates• Rising inflation rate• Affordable housing
funding, availability• Infrastructure needs
> funding• Anti-growth
initiatives
Opportunities• Continued job growth• Tax Cuts and Jobs Act
influence in CO• Confident consumers• Some tempering in
residential markets• Active commercial real
estate market• Technology driving
major changes
Questions?
Development Research Partners10184 West Belleview Avenue, Suite 100
Littleton, Colorado 80127(303) 991-0070
www.DevelopmentResearch.net
Patricia Silverstein, [email protected]
Thank you!Wishing you a prosperous 2018!
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