2017 Ends on a Positive Note
Could Colorado's hot market overheat?
Colorado’s monthly indicators ended on a positive note, especially with the non-farm wage and salary job growth rate increasing to 2.2 percent in December 2017, compared to December 2016. The job growth rate had been trending down since late summer. The year over year (YoY) growth in the December unemployment rate is welcomed as more people are joining the labor force, but the news is tempered by a sharp decline in job openings and a dramatic increase in the wages offered for those job listings that report wage levels.
The single-family new housing market is responding to housing shortages with a 22.8 percent increase in December building permits relative to December 2016 while the apartment market appears to be peaking in terms of new construction with a steady vacancy rate. It will be interesting to watch vacancy rates and median rents this coming spring/summer as rents tend to increase and vacancies decline during moving season.
Given the number of units under construction, will the normal seasonal pattern prevail?
This month’s other indicators include transportation activity at DIA. The only thing more impressive than the 4.6 percent increase passengers traveling through DIA is the volume of freight and express shipping, up 9.5 percent. The other airports around the state are also seeing positive trends, with Colorado Springs reporting a 19 percent YoY increase in passenger traffic.
The bottom line: Colorado’s economy is firing on all cylinders – so much so that housing and wage pressures put the engine at risk of overheating.