Economic Picture

National: There are finally signs that the economy is starting to pull out of the slump it has been in for the last three years. The Commerce Department reported on July 29 that the U.S. economy grew at a pace of 2.4 percent in the second quarter of 2003. This is the best growth rate in over a year. Economists are hopeful for more growth through the second half of the year. Lower unemployment claims in July reinforced their optimism, with new claims reaching their lowest level in five months. (Boulder Daily Camera, July 31, 2003; Denver Post, July 31, 2003).

Mortgage rates are finally inching up from historic low levels. (Denver Post, July 13, 2003). As of the last week of July, rates were at their highest levels in 2003, breaking through the 6 percent mark. Economists cite several factors in the rise, including signs that the economy is improving.

If rates continue to rise this will probably result in a drop in sales prices. If this comes to pass we will have to wait to see how extensive it is and how that will affect the rental market.

Regional: Broomfield County is one of the 10 fastest-growing counties in the nation. Statistics show that Broomfield had 14,651 homes in 2000 (single family residences, town homes, condominiums, apartments, and mobile homes), with growth to 15,217 in 2001 and 16,284 in 2002. (Denver Post, July 18, 2003).

The median home price for a home in metro Denver rose to $238,000 in July, a 5.8 percent increase. The number of homes for sale also set a record, rising 20.4% from last year (22,233 in 2002 vs. 26,764 this year) according to the Denver Post (7/23/03) In the words of economists, the two statistics fly in the face of basic economic theory, and are a result of the historic low mortgage interest rates.

According to Economy.com, an online provider of economic analysis, the Colorado economy remains in a slump months after the official end of the U.S. recession. The analysis relies on employment growth to measure economic health and the job loss in Colorado is starting to moderate, it is by no means reversing. Colorado appears on track to lose jobs for two years in a row. (Denver Post, July 24, 2003).

One of the local indicators is stock prices for local companies. While the market is still deciding what to do overall there are indications that the local companies are making some progress (see table below)....