National Economic News
On the national front, the stock market advanced strongly in October, surging upward in tandem with strong economic and earnings reports. The Labor Department reported that layoffs are slowing, while solid retail sales reports from Walmart and Gap contributed to the positive outlook. IBM's positive third quarter earnings release fueled the stock market even higher. (The Denver Post, October 10, 2003, October 16, 2003)
Apartment vacancies in the West declined, signaling a reverse in the upward trend for next year. Rents continued to lag inflation in the third quarter but analysts predicted a upward movement next year. September vacancies declined from June levels everywhere in the West but Arizona and dropped by at least a full percentage point in 13 of 19 markets. A study interpreted the statistics as a positive economic indicator, because people are reluctant to sign leases if their employment prospects are in jeopardy. (The Denver Post, October 17, 2003)
The Commerce Department reported that home building jumped in September at the second highest rate since 1986, attributed to low mortgage rates and construction companies working to fill backlogs. (The Denver Post, October 18, 2003)
Regional Economic Picture
Colorado is finally seeing some positive news on the jobs and economic fronts. Layoffs decreased in the third quarter and some indication of hiring emerged in the retail and healthcare arenas. This follows two consecutive years of job losses. (Denver Post, October 2, 2003) The Colorado jobless rate declined from 5.7 percent in August to 5.6 percent in September, the lowest rate since last February. 138,800 Coloradoans were looking but unable to find work in September. (The Denver Post, October 22, 2003)
In a sure example of how one economic condition leads to another, metro-area foreclosures jumped more than 46% from over a year ago. Experts attribute the rise to job losses and lax credit standards that allowed people to over extend. Further, bankruptcy filings in the state are on track for a record year, with 19,480 cases to date this year, compared to 15,686 over the same period last year. The increase of 24% puts the state on track to break the record it set last year of 21,216 filings. (Denver Post, October 2, 2003)
Denver's apartment vacancy rate dropped for the first time since late 2000, primarily due to concessions: steep discounts on rents. The market continues to belong to the renters. Boulder/Broomfield Counties reported a 7.1 percent vacancy rate with rents averaging $864 for one bedroom properties, $1032 for two bedrooms, one bath and $1,085 for two bedrooms, two baths. (The Denver Post, October 31, 2003)
Xcel Energy prices continue to rise. On top of a 73% increase in the heating portion of energy bills, the company requested a 2.5% increase in electric rates to take affect in March 2004. This follows an electrical hike last June. (Rocky Mountain News, October 4, 2003) Denver area home prices are up compared to a year ago, but many brokers say that the market is starting to struggle. Homes priced over $200,000 are sitting on the market and brokers believe that sellers are coming down sharply in order to save the equity they may have in a property. (Denver Post, October 29, 2003) The bottom line is the Denver metro area is behind the rest of the nation in terms of economic recovery. There are many positive signals, but Colorado has a long way to go.
