Denver Unemployment

As anticipated, the number of people counted as officially unemployed in the Denver area rose to 7.5% in December.  A consensus among local economists is that the unemployment rate will continue to rise slowly  during the first during the first half of 2010 before receding in the second half of the year.  The local unemployment picture remains considerably better than the national scene. The unemployment rate affects the housing market by both reducing the number of actual home buyers, and by diminishing the confidence level with the average consumer that you need to sell your home in Denver.

Denver Housing Inventory

The Denver area resale housing inventory remains below the same time last year, creating unusual stresses on the market.  Sales under $300,000 remain strong in light of the Federal Tax Credit due to expire on homes purchased after April 30 of 2010 and the very low interest rates available to first time buyers.  New home starts remain mired in the quick sand of unsaleable inventory, but builders are adjusting by offering new lower priced models. The local new home market will improve slightly during 2010. There is also consensus among most economists that the recession ended at the end of the third quarter of 2009.  Fro those without a job, that is a somewhat meaningless statistic, but it does indicate that things are getting slowly better.  Most economists agree that the nation is over indebted, while Congress votes to increase the debt by another few trillion.

Key Economic Statistics

• New Home Starts: YTD* Dec. 2009:  2710   (down 31% from 3950 YTD December 2008)  ↓

• Mortgage Rates:       4.97%. down from 5.01 the week before, and from 5.16 STLA*  ↓

• Average Single Family Home Price up 12.85% from STLA         ↑

Jan. 2010            $260,530 Jan. 2009            $230,878

• Employment Statistics from Dec. of 2009    Unemployment rate up to 7.5%    ↑

Dec. 2009 Labor Force:  1,357,177               Employed:   1,255,678 Dec. 2008 Labor Force:  1,396,492               Employed:  1,307,858

• Consumer Price Index: National index at 215.949  up 2.7 from December of 2008.  ↑

The Denver area local index stood at 207.44 a the end of the first half of 2009.  New Index  numbers will be available in the second half of February. * STLA means “same time last year” *YTD means “year to date”

A very low active resale inventory coupled with an extraordinarily low number of new home starts has combined to reduce the total homes available for purchase, and home prices in the Metro area began to increase in the latter half of 2009. The Denver market is bifurcated, as is much of the nation, with most home sales occurring in a price range below $300,000.

Statistics for the Metro Denver Real Estate Market

• Consumer Price Index:     .09%  down from 3rd quarter 0f 2008                     ↓

• New Home Starts  Nov. 2009:   2440   (down 35% from 3770 in 2008)          ↓

• Employment Stats Nov. 2009:     unemployment rate at 6.8% ↑

2009    Labor Force   1,365,749                   Unemployed      1,272,288

2008    Labor Force   1,404,928                    Unemployed     1,326,390

• Mortgage Rates (1-15-2010)     5.1% virtually unchanged from STLA*        ↔

December 2009                 $255,847

December 2008                 $225,257

*STLA is “same time last year”