Colorado 2006 Economic Forecast Local Market Report Rising FED Rates & Katrina's Impact on Prices & Growth

Colorado 2006 Economic Forecast

The Adams Group recently issued a 2006 Colorado Economic Forecast. I urge you to read the entire publication (the link can be found below). This report represents highlights in population growth, employment, income and housing permits. Colorado's population growth has averaged 2.3% - 3.3% for a decade, and will grow by 1.5% or 70,500 residents in 2006. In-migration will account for 32,000, up almost 10,000 from its nadir in 2002. The unemployment rate will average 4.9% in 2006. Personal income will increase by 5.9% in 2006. The statistic provides a rough measure of the improvement in the average standard of living for Colorado residents. Retail sales growth will slow to 5.9%, down from 8% in 2004 and 2005. New housing permits will fall to 38,888, down 8.1% over 2005. The Adams Group calls this a "glass half-full forecast." The unknown variables are: 1) whether long-term rates will rise. Currently an unusually high level of foreign investments in U.S. Treasury securities is keeping the long-term rate low; 2) If consumers begin to reduce spending, the economy will slide into recession; 3) Housing prices are predicted to fall nationwide, but forecasting a "bubble" is an impossible task; 4) Oil prices may fluctuate because of supply disruptions, even with growing demand. More 2006 Forecast »

Local Market Report

Colorado housing permits declined 3.7% through July, with all of the losses in the multifamily sector. Single- family permits increased 0.6%. Colorado Springs had the largest overall gain, 14.8%, while metro Denver had the biggest single-family increase, 7.5%. Sales of existing homes plunged 25.4% through July in metro Denver, with the biggest decline, over 7,700 units, in the single-family arena. Colorado Springs sales, in contrast, surged 11.3% through August, but the median price declined from June. It was up 10.6% relative to a year earlier. In Denver the median price continued to climb in June and was up 4% relative to the first seven months of 2004. Sales in the Evergreen/Conifer Area are as follows: Conifer: 270 homes have sold at an average price of $368,149. These homes were on the market an average of 96 days. North Evergreen: 222 homes have sold at an average price of $541,689. These homes were on the market an average of 110 days. South Evergreen: 154 homes have sold at an average price of $415,276. These homes were on the market an average of 107 days. Good News for Sellers This summer was a record breaker! Our Evergreen realtors sold more of our own listings than in 2004 or 2003. www.ColoradosRealEstate.com »

Rising FED Rates & Katrina's Impact on Prices & Growth

As widely expected, The Fed raised short term interest rates for the eleventh consecutive time this week by 1/4 point to 3.75%. Local mortage companies are still quoting 5.5% fixed 30-year mortage with 1 origination fee. Without the origination fee... 5.75% The Federal Open Market Committee (FOMC) acknowledged the devastation caused by Hurricane Katrina in the Gulf region, the disruption of economic activity and the spike in energy prices that could set back spending, production and employment. Nevertheless, the FOMC believes these effects are trasitory, but higher energy prices do have the potential to feed inflationary pressures. www.HomesInColorado.com »