Beginning of the Year Economic Update
Thursday, February 21, 2019
In an Economic Update in January by Tatiana Bailey, Director of UCCS Economic Forum, we heard some news on National, State and local levels. Some information was limited due to the partial government shut down but the presentation was still very informative, and over all, optimistic for our area.
Our main takeaway was that we are not headed for another crash like we saw a few years ago. However, we are in the midst of some uncertain times: government shutdowns, trade wars, higher interest rates than we’ve seen in the last couple of years, relatively low unemployment, higher wages, aging workforce, etc. which might result in a slowdown. The partial shutdown we experienced at the beginning of the year is over and it seems that things are settling down now. Trade issues have yet to be resolved between the US and China. Interest rates are increasing but are still relatively low; this is slowing the housing market some, but not alarmingly so. Unemployment continues to fall and wages are increasing to attract qualified workers, the labor pool is changing as millennials enter and older generations retire. However, consumer confidence is still pretty high and businesses are still hiring and expanding, and while interest rates are rising, they’re still low.
On a state level, Colorado is one of the more robust economies in the country. We have a variety of industries contributing to the growth and diversity. Businesses are forming and growing here, especially in the tech industry. Our unemployment rate is low and our labor force participation rate is rising, meaning more people are entering the workforce. The Colorado unemployment rate bumped up slightly at the end of 2018 as graduates and reentrants came into the labor market, but the increase in job postings absorbed most of those who joined the labor market.
Locally, our economy continues to grow. We experienced the same increase in the labor force as the state did, and our unemployment is low as well. Wages in El Paso County are a little lower than in the rest of the state and in the country.
Our median home price is about $315,000. Sales in 2018 were about 15,500 and are expected to be slightly higher in 2019. But, even with the higher prices and increased sales, El Paso County is still cheaper than surrounding areas and we are seeing some migration from Denver to Colorado Springs to take advantage of this.
According to a market update from Pikes Peak Association of Realtors, a comparison of January 2019 to January 2018 shows that Single Family and Townhouse-Condo prices are higher; Inventory, and Days on Market have gone up very slightly; and while the Months Supply of Inventory has only increased from 0.7 to 0.8 months for Condos and Townhomes, it has increased from 1.1 to 1.4 months for Single Family. Sellers are still receiving over 99% of list price for their homes. Overall, we feel that this is a sign of growth that is sustainable for our area.