National Economy
Sale of new homes set a record in April for the year. Sales were up 4.9% for the highest level since December 2005 (Daily Camera 5/25/06). However, the number of unsold homes set an all time record last month. Most analysts see this as further depressing sales in the future.
Rising interest rates and falling demand is leading many developers to the lowest confidence level in almost 11 years (Denver Post 5/16/06). In addition, a record number of new homes on the market is dropping overall sales and reducing profits.
The rental market in the West is improving. It is being driven by the increases in interest rates and more jobs. According to the Daily Camera (4/20/06) the average rent in 20 western markets is up about 4%. the biggest increases were along the West Coast markets. In addition, landlords are seeing some improvements as interest rates climb and fewer people can afford to buy homes.
Regional Economy
Colorado is second among all states for foreclosures and Denver ranks fifth among the 100 largest national metro areas (Denver Post 5/23/06). this is just in the first quarter 2006. In March and April Colorado ranked first. There were one out of every 105 homes in foreclosure. Many analysts blame this on the high use of adjustable rate mortgages and the increasing interest rates.
On a very positive note, the unemployment rate for Boulder and Broomfield counties continues to drop due to more jobs (Daily Camera (5/20/2006). while the overall Colorado rate is down about 4.3% the rates are down to about 3.6% and 4.3% respectively. The increase in jobs appears to be in the higher paying professional and business services areas.
However, while the Denver rental market is improving, rents are only up only about 0.7%.
