Population BOOM in Colorado

Posted on March 28, 2016 by Jessica Meeker

There is a population BOOM in Colorado. No surprise there. We all see it: in the traffic, on our hiking trails, at the dog park – the fact that there are so many dog parks, at our favorite restaurants and in our housing prices. This has been happening for decades – ask anyone with a NATIVE sticker on their car. Thing is, the largest generation since the Boomers has come of age. The Millennials are leaping out of the nest and fluttering off to more inspiring locals. Like Denver.

Interestingly, the Boomers are coming to a certain age also. Retirement time. These super active adults are seeking mostly the same things they’ve taught their Millennial children to prefer: limited home maintenance, nearby amenities, pet friendliness, access to quality restaurants and entertainment, high quality home finishes, access to a certain lifestyle, close approximation to like-minded people, and much more. All these qualities come at a price, especially when one accounts for greater demand than there is supply.

Across the nation, newspapers are almost tired of running the same headlines – or at least the writer suspects readers are starting to get bored with them – telling us how hard it is to come by a good, cheap dream home. Fact of the matter is, such a thing is not realistic. It’s not realistic for a number of reasons: that the supply is significantly less than demand, that it’s harder to obtain financing than ever before, that wages have not kept pace with inflation, and because it’s just plain expensive by common standards to build a high-quality new home in a desirable, densely populated location.

As an introduction, supply and demand were noted. People are moving into Colorado far faster than we can organically provide low-priced, high quality homes that meet all the hopes and wishes of said new citizens. The Recession of 2008 caused numerous builders and construction companies to leave the market. In addition, it was reported in fall of 2015 that Colorado’s unemployment rate reached an incredible low of 3.3%. That means despite the huge influx of people, they all have jobs and there really aren’t many people available to build housing, at least, not affordably. According to the Colorado Bureau of Labor Statistics, construction worker compensation was up over 13% from 2013 to 2014. There were only 11 other employment categories out of 764 that experienced the same or better improvement. (http://www.bls.gov/oes/current/oes_co.htm)  It is anticipated that this trend will continue. There are currently fewer construction companies and fewer construction workers in the market than there were before the Recession and that means higher prices for the general population.

Beyond the additional costs of construction labor, one must also consider the increased costs of construction goods which have increased at a steady rate since about 2011. (http://www.architectmagazine.com/design/construction-costs-in-the-us-are-rising_o) All around companies are seeing external pressures on their bottom lines making it more and more difficult to provide a quality product, quickly and affordably. Something has to give.

So now we look to the consumer. According to a 2014 study performed by the PEW Research Center, the average American’s purchasing power in 2016 is approximately the same as it was back in 1979. Fact of the matter is, if it were 1979 the average home price in Colorado would be about $105,000 and not $301,900. (http://www.economist.com/blogs/graphicdetail/2015/11/daily-chart-0) So we are trying to use 1979’s resources to live in a 2016 economy.  With that in mind, one can do quite well in many of the Midwestern communities from which many of us have migrated. Property values have remained somewhat stagnate making the dollar stretch quite a bit further there. But we’re not there, we’re here and we are working hard to achieve the dream here, in Denver.