Updated: Feb 20, 2019
Colorado’s housing market has benefited over the past several years from in-migration, job growth and limited housing supply. However, recent market trends highlight that this robust period of growth is beginning to moderate.
For two years in a row, new housing units have outpaced household formation. We expect this trend to continue in 2019. Consider the chart below highlighting the overall change in household formation compared to the number of housing units being added. When formation is greater than units constructed, demand is greater than supply.
After the Great Recession, Colorado had a large surplus of housing. Fortunately, people began moving to Colorado in waves. It didn’t take long for the surplus to turn into a deficit. In the chart below, you can see the impact of supply and demand on prices. Notice that prices are still increasing, albeit at a slower pace.
Colorado has one of the fastest growing economies in the US and demand for housing is still strong. The chart above highlights the shrinking housing deficit, but it is important to remember that it is still a deficit. While prices may go higher, the probablity of a modest decline in prices is also increasing. Regardless, the days of double-digit price appreciation are probably behind us for the time being. For more detailed perspectives on how Colorado’s housing market impacts municipal bonds, please call us at (970) 963 - 5810 or email me at firstname.lastname@example.org.
This report is for informational purposes only and should not be considered a solicitation to buy or sell any security. Past performance is not indicative of future results. Neither Equus Private Wealth nor any other party guarantees its accuracy or makes warranties regarding results from its usage. Nothing herein is intended to provide enough information to make an investment decision. Investing in securities exposes the investor the risk of loss of principle. Redistribution is prohibited without the express written consent of the Equus Private Wealth Management, LLC. Data for this report comes from St. Louis FRED Economic Database, State of Colorado Demography Office and internal estimates that are subject to change at any time.