Colorado Economy Resurges, Adds Thousands More Jobs

Colorado’s economy continues to expand in 2018, even after signaling a slowdown at the beginning of the year. Job growth was revised upward to 2.4 percent growth for the year, according to the mid-year economic report from the Leeds Business Research Division at the University of Colorado Boulder.

The rebound follows a slowing of employment growth last September to less than 1.9 percent – the lowest level in almost six years. In June 2018, job growth increased 2.8 percent year-over-year.

The increase means about 15,000 more jobs than expected will be added through 2018, bringing the total to 62,000 new jobs by the end of the year.

The state’s gross domestic product also rose 4.5 percent year-over-year for first quarter 2018. The increase shows Colorado’s economy is continuing to grow after slowing to just 1.4 percent in 2016— the lowest level since 2010. Economic output rose to 3.6 percent in 2017.

Meanwhile, Colorado still has one of the lowest unemployment rates in the nation, logged in June 2018 at 2.7 percent. While fewer people have been moving to Colorado – dropping from 67,781 in 2016 to 46,626 in 2017 – more Coloradans are going into the labor force. The increase in workers has enabled continued employment growth, despite the decrease of people moving to the state.

Sectors leading the way in job growth are natural resources and mining, and construction.

Natural resources and mining have shown strong employment growth, according to Business Research Division Executive Director Richard Wobbekind. “Energy prices are obviously factoring into it,” Wobbekind notes.

The construction industry is “finally back to the same level of employment that they were at pre-recession.  They are really mostly constrained by lack of available workforce,” he says.

While a shortage of skilled labor continues to challenge the construction industry, Bureau of Labor Statistics data shows construction employment across the state was 171,200 in June 2018, a 5.2 percent year-over-year increase. This surpasses the last peak of 170,100 in July 2007. Average annual pay for construction workers was $59,446 in 2017, slightly above the average Colorado pay of $56,916.

Agriculture’s outlook is not as robust, however. Drought, wildfires, and low prices are slowing growth. For example, corn prices have declined more than 30 percent from five years ago.

“It’s a tough road to hoe in some of the rural areas,” Wobbekind said.

Read the full Mid-Year Economic Update at https://www.colorado.edu/business/2018/08/17/state-economy-adding-thousands-more-jobs-expected-report-predicts

 

Originally posted here by Tom Kalinski Founder RE/MAX of Boulder on Wednesday, October 31st, 2018 at 11:01am.

 

Posted on November 2, 2018 at 11:10 pm
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Proposition 110 better serves Boulder Valley

Since Boulder’s anti-growth sentiments seem not to be going anywhere anytime soon, the condition of our roadways has become increasingly important to our economy in general and to commuters in particular.  The worse the condition of our roads, the longer commutes take and the more money commuters have to spend on auto maintenance — and the less attractive Boulder Valley becomes to workers (and employers). If you have spent any time traveling around Boulder and Broomfield counties, you know our roads are in a sad state of disrepair.  As much as I cast a skeptical eye at many of the proposed tax increases we are asked to consider, something must be done to fix our roads and support the continued vitality of our region.

There are two transportation funding propositions on the ballot this fall, and one of them — Let’s Go, Colorado (Proposition 110) — deserves your vote.

If Proposition 110 passes, there would be a 0.62 percent sales tax over 20 years to provide money for both state and local transportation priorities.  Projected revenue from the tax is $767 million for the first year, and while that sounds like a lot of money, it pales in comparison to the $9 billion transportation funding shortfall that we are facing.

If you have lived in Boulder for a considerable time, you may well remember with consternation how we were taxed with the promise of light rail connections from Boulder Valley to Denver, only to see that money spent on building out the South Metro area’s light rail system, while we were left with nothing.  You would be forgiven for responding with an expletive the first time you heard about these new funding proposals.  However, since the light rail tax debacle, a new advocate — Commuting Solutions — has risen to champion transportation causes in our area and has worked in this case to ensure that money will be allocated to address our most important needs.  In fact, if Proposition 110 passes, Commuting Solutions (and its coalition partners) has ensured that our key local needs are included on the CDOT approved project list, with up to $915 million for the following projects:

• Colorado Highway 119 (Boulder – Longmont)

• Colorado Highway 7 (Boulder – Brighton)

• U.S. 287; Colorado Highway 66 (Longmont – Broomfield)

• 28th Street/Broadway (Boulder)

• Colorado Highway 95/Sheridan (Westminster)

• Colorado Highway 7/I-25 Interchange (Broomfield/Adams)

While I understand and appreciate the sentiment behind “Fix Our Dam Roads” (Proposition 109), our local needs are not guaranteed to be addressed and this $3.5 billion bond measure is not paid for; that is, the legislature would likely be forced to cut the state budget in other areas, causing trade-offs that many citizens might not want to make.

Our roads are in a dire state, which will negatively affect our economy, housing values, and quality of life, if not addressed. I support Let’s Go, Colorado (Proposition 110) because the time has come to repair our roads and Commuting Solutions and its partners have succeeded in ensuring that money will be allocated to projects critical to Boulder Valley if it passes.

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on October 18, 2018 at 3:29 pm
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Boulder Performs Well Among Top Innovation Cities

Boulder stands tall when compared with much larger metropolitan areas that excel in innovation and entrepreneurship.

A report produced by the Boulder Economic Council compares Boulder with leading innovation centers including Silicon Valley, San Francisco, Austin, Boston, Seattle, Portland, Denver and Raleigh.  Though these metropolitan areas have a much larger population than Boulder, they were selected as peer communities following input from local focus groups and ranking reviews published by Inc., Forbes, and others.

To get a meaningful comparison, data was normalized for population size and other measures in analysis by CU-Boulder’s Leeds School of Business Research Division.

And the news is good, according to findings published in the Boulder Innovation Venture Report. Boulder compares favorably in key success metrics from education and jobs to quality of life. The area is challenged, however, by a lack of affordable housing to supply its workforce with a place to live.

The Boulder metro area ranks first among the peer communities for the percentage of population 25 and up who hold a bachelor’s degree or higher. Over 60 percent of residents have a bachelor’s degree, which is among the highest in the United States.

In the jobs ranking, the City of Boulder has about 100,000 jobs, a number two or three times larger than almost any other U.S. city comparable in population size. Among those jobs, Boulder has the second highest concentration of science, technology, engineering and math (STEM) occupations among all the peer regions.

Boulder has the second-highest per capita venture capital investment in comparison to the peer communities.

In fact, Boulder is ranked number one nationally in the “Bloomberg Brain Concentration Index,” which tracks business formation as well as employment and education in the sciences, technology, engineering and mathematics.

Drilling down into the creative services industry – advertising agencies and web and app developers – outdoor recreation and food manufacturing, Boulder’s concentration of local businesses was significantly higher than peer communities.

Even in coffee shops the Boulder area percolates, achieving a tie with the Seattle-Tacoma-Bellevue metro for the highest concentration of coffee shops among peer communities. Boulder outranked all the peer cities on restaurants per 1,000 residents.

While any amount of time stuck in traffic is too much, Boulder drivers spend less than all but one of the peer communities with 10 percent of total driving time in congestion. Boston drivers spend the most time driving in congestion.

The challenge for Boulder is housing affordability, according to the report. Measured by median metro area home values, Boulder has the third highest housing costs among its peer communities, behind the San Jose and San Francisco regions and just ahead of Seattle and Boston. But the city is not alone – its peer communities face the same challenge. All but one of the metro areas studied for this report ranked among the 25 most expensive housing markets in the U.S.

For the full Boulder Innovation Venture Report, visit: http://issuu.com/boulderchamber/docs/innovation_venture_report_v26?e=33607933/61913820

 

Originally posted here by Tom Kalinski Founder RE/MAX of Boulder on Tuesday, September 11th, 2018 at 3:05pm.
Posted on September 17, 2018 at 6:58 pm
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The danger of Boulder’s CAVE people thinking

Let’s face it, what happens in Boulder affects the rest of Boulder Valley in terms of housing, transportation, economics and myriad other dimensions.  If you want to know where your neighborhood is headed, it’s informative to know what Boulder is doing, even if you live in say, Erie.  And, if you even casually follow Boulder politics these days, you might be perplexed and concerned by the (seemingly) increasingly bizarre actions coming from Boulder’s City Council.

For a council that purports to support the environment, public safety, and inclusivity, its recent actions don’t seem to match its rhetoric.  In my opinion, however, its actions make sense when you understand the true underlying motivations and desires — and to do that, you have to understand Boulder’s CAVE people.

Who are Boulder’s CAVE people and what do they want?

Simply put, I call these people “Citizens Against Virtually Everything” (CAVE), and they seem to have the ear of the majority of the current council.  It appears that the plurality of Boulder’s CAVE people arrived in Boulder in the 1960s and ‘70s as students, hippies, ski bums, etc.  They decided to stay, bought homes here, and have become relatively well off as Boulder’s home price appreciation outstripped virtually everywhere else in the country.  At the same time, they seem not to like the multiple dimensions of growth Boulder has enjoyed over the last several decades; indeed, their strongest desire is apparently to see Boulder return to as it was “back then,” with fewer people, fewer businesses, less crowding, etc.  Their apparent goals, then, are to slow, stop, or reverse growth of all kinds in Boulder.  Their tactics appear to be to (disingenuously?) cloak themselves in the rhetoric of environmentalism, populism, and liberalism in order to achieve these goals.

Recent examples of CAVE people tactics and their effects:

1. South Boulder Flood Mitigation Plan.  The 2013 flood brought the issue of flood mitigation to the front of everyone’s minds in Boulder Valley, but the study of how to best deal with this issue in South Boulder goes back well before then.  After nearly a decade of study, and more than $2 million in fees and environmental studies, and extensive public engagement, the City Council had a few feasible flood mitigation plans, one of which (500-Year Variant 2), had the support of the University of Colorado (the property owner), the city’s Water Resources Advisory Board, and general public.  One would think, then, that it would be an easy decision for the City Council to support.  One, however, would be wrong.

Recently, the Boulder City Council voted to proceed with a different flood mitigation plan, one that is opposed by CU, disregards expert testimony, the preferences of the city’s Water Resources Advisory Board, and general public sentiment. 

Why would the council disregard science, experts, reason, common sense and nearby residents?  Using the lens of CAVE people logic, it may be because they believe that taking a position in opposition to all of these things will greatly slow the process of CU developing that land, which fits the goals of “slow, stop, reverse.”

2. Sales Tax Revenue. Cities like Boulder depend on sales tax revenue as an important component of their budgets.  Earlier this year, Boulder reported a $4 million budget shortfall, attributable primarily to flattening sales tax in the city — at a time when nearby cities are enjoying double digit growth in their sales tax revenues.  Members of the City Council held a study session on the topic on July 10 in which some members declared that they apparently want fewer visitors to Boulder (both tourists and locals from neighboring cities).  They expressed these opinions even with the knowledge that locals already visit downtown Boulder an average of seven times per month, but tourists spend several times what locals do per visit.

Why, in a city that prides itself on being welcoming and at a time when sales tax revenues are falling, would members of council declare an apparent desire for fewer tourist (and accompanying tax dollars)?

3.  Increased housing density. Council members often voice their support for efforts to provide inclusive housing, reduce Boulder’s carbon footprint, and improve our city’s environmental sustainability; however, when it comes to increased density — the thing that would arguably go the farthest toward achieving those aspirations — the council’s words do not match their deeds.  Boulder’s draconian housing restrictions, including the 1 percent cap on annual residential growth (which we’ve never actually hit), blanket height restrictions, severe occupancy limits, among other measures, has forced our workforce to largely live outside the city.  This, in turn, causes the more than 60,000 daily commutes into and out of Boulder. By simply ameliorating some of these harsh policies, and allowing a modicum of sustainable and smart development, Boulder could include more of its workforce within city limits and could considerably lessen its environmental impact.

Why, then, has the city actively resisted efforts that would address these critical housing and environmental issues?  One possibility — CAVE people logic: if it is extremely difficult to add housing density, not only will it slow population growth, it will force workers into longer commutes and growing frustration.  Over time, businesses will relocate to areas more accessible to their workforce, and there will be fewer people, fewer jobs, less congestion… like it was “back then.”

What’s to come?

Rather than building a bridge to the future, Boulder’s CAVE people seem intent on digging a trench to the past.  In fact, their efforts seem to be achieving results — not only did Boulder run a budget deficit, but its population actually decreased between 2016 and 2017.  There is no stasis for cities — they are either growing or dying.  It seems the CAVE people are succeeding at pushing their agenda of “slow, stop, reverse,” through council.  And if they win, all of us who are truly for the environment, public safety, and inclusivity will lose.

 

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on September 2, 2018 at 6:11 pm
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Boulder valley real estate: Parsing fact from ‘fake news’

Boulder County Single-Family Listings 2012-2018

In this day and age, one could be forgiven for wondering if facts no longer matter or actions no longer have consequences. Whether one watches the national news or a local city council study session where members declare that they want fewer visitors (both tourists and locals from neighboring cities), it is clear we are living in strange times.

Despite all of the uncertainty, there are still a few facts left out there (at least where real estate is concerned), and from them we can draw some reasonable inferences.

The Facts:

1. Home prices throughout Boulder Valley are reaching all-time highs.

At the top of the list, the average single family home in:

  • Boulder now costs over $1,250,000
  • The suburban plains now costs almost $850,000
  • Louisville and the suburban mountains now cost over $750,000
  • Boulder County now costs $767,000

Likewise, the average attached home in:

  • Boulder now costs over $540,000
  • Louisville now costs over $400,000
  • Longmont now costs over $350,000
  • There are no places left in Boulder County or Broomfield where the average condo is less than $340,000.

2. Local housing inventory is at historic lows

The inventory of homes throughout Boulder County is at or near historic lows..

At the end of June, there were 858 single family homes on the market in Boulder County.  To add some perspective, the inventory of homes on the market at the end of June 2006 was 2,763, more than three times as many homes as there are now.  There are many reasons for this, including the fact that people are choosing to stay in place longer, increasing prices/lack of affordable places to move to, strong anti-growth policies, etc. Looking at the economic, political and structural factors at play, it appears that this scarce inventory is going to be the new normal. 

3. Despite the high prices and low inventory, demand remains high

We gauge the strength of demand for homes using several indicators, including months’ of inventory, the average time a home spends on the market, and the number of expired listings (homes that failed to sell on the market). 

Economists say that a balanced housing market has about six months’ of inventory, with more inventory being a buyer’s market and less being a seller’s market.  At the end of June, Boulder County had about 3.3 months’ of inventory, compared to 3.8 at this time last year. In the first half of 2016, the average home spent 65 days on the market (from listing to closing).  So far this year, that average is 57 days, 12.3 percent faster. Last year at this time, there were 33 expired listings, compared to only 26 this year, which is a drop of 21 percent.

Taken together, these factors demonstrate that demand is getting stronger, even in the face of rising prices and declining choices. And when you consider net migration to our area and plentiful jobs, it also appears that demand will keep increasing and homes will continue to appreciate until . . . when?

What is it that will cool our market and when will it happen?

There are several issues that have the potential to slow our market.  First, interest rates continue to rise and as they do they will drain buyers’ purchasing power.  Second, as prices have risen faster than wages over the last decade, there may come a point where home prices have to stall in order to allow buyers’ savings to catch up.  Third, a macro-level event, such as a recession, international war, etc., could cool the entire economy and affect our market.

The set of variables is too complex to predict accurately what the precise cause(s) will be or when it will come, but it will come.  The good news (if you own real estate here) is that there is no better place to invest in real estate than here — even in a downturn.

 

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on July 1, 2018 at 12:02 pm
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