Jessica Lynch, ABR, Your Lifelong REALTOR

ECONOMIC INDICATORS:

· Metro Denver added 10,400 jobs between February and March; year-to-date employment dipped very slightly to 1.9% over March 2007. National job growth has slowed to a 0.6% growth rate. In Denver, Finance sector employment is down 2.5% year-to-date due to ongoing challenges in the credit and mortgage while Education and Health Services still have job growth rates near 4%.
· Colorado ranks third in the nation for month-over-month employment increases. 5,100 new jobs were seen here in March.
· The national economy lost 20,000 jobs in April, the fourth consecutive month of decline, but a significantly smaller total than most analysts had predicted, leading some to even declare that the current downturn will be "mild and short-lived." With the dollar gaining a little strength and unemployment dipping, the economy
is showing signs of strength.
· Metro Denver's unemployment rate held at 4.7% - higher than the year-ago 4.1% figure but better than the national average of 5.2%.
· Manpower's Employment Outlook Survey now says 22% of Denver-area employers say they expect to add workers in Q2 2008 - down from 27% in Q1 and 42% a year ago. If there's a positive side, the percentage of employers expecting layoffs fell from 14% to 7% for Q2 2008.
· Of the seven metro counties, 2007 retail spending increased the most in Boulder (+15.3%) and Adams (+14.6%). Growth elsewhere in the metro area ranged from 6% in Jefferson to 9.3% in Broomfield. Restaurants and household goods are two retail sectors experiencing slower consumer spending.
· Early April retail returns at the national level indicate spending increases in health and beauty care, building materials, garden equipment, sporting goods, discount stores, electronics and appliance stores. But throw auto sales into the mix and
total U.S. retail sales have fallen for the third time in the past five months.
· A survey of sales tax collection data for six metro malls shows that while sales are slowing, Denver stores are still performing slightly better than the national average. Park Meadows and Cherry Creek have actually posted increases.
· In fact, Colorado ranks fourth in per capita spending at shopping malls: $7,573 compared to the national average of $4,969.
· Consumer Confidence in the Mountain Region has fallen 22.8% YTD, and down from 102.1 in February to 96.5 in March - now second-highest among the nation's nine regions after a long run in the top spot. By comparison, the U.S. Consumer Confidence Index fell further to 64.5 - a five-year low for March.
· In a related measure, Consumer Sentiment (a measure that includes more impact from food and fuel prices) has fallen to its lowest level since 1980.
· Consumer borrowing rose in March at the fastest pace in four months, more than double the increase of the previous month, a sign of rising economic stress.
· Inflation moderated in April. The core Consumer Price Index (which excludes food and energy costs), was up 0.1% in April after rising 0.2% in March. Food prices, however, rose 0.9% - the largest gain since 1990.
· While the DOW increased 4.9% from March to April (-3.4% YTD), the Bloomberg Colorado Index gained 4.3% (-3.8% YTD). (The Bloomberg Colorado Index is a price-weighted index that includes 115 Colorado companies.)
· Colorado venture capital is up. 10 deals worth $98.7 million hit the books in Q1 2008 compared to 8 deals worth $70 million a year ago.
· Even though home sales are 11.1% below a year ago, Metro Denver home sales increased 23.6% from February to March. Unsold inventory has dipped and selling time has declined. Nationally, home sales declined again and stand 19.3% below a year ago, with pending sales at a new low in March.
· In a national survey, Johns Manville found that 24% of U.S. homeowners are considering using federal economic stimulus payments to upgrade or remodel their homes. Metro Denver has seen an increase in home improvement projects.
· Three other national surveys indicate that a growing number of consumers will dedicate their stimulus checks to paying down debt and buying gas and groceries as opposed to spending at restaurants, fashion stores and electronics retailers as the program had hoped.
· PMI Mortgage Insurance Company research forecasts Denver home values have only a 1% chance of falling below Q4 2007 values by Q4 2009. By comparison, Riverside has a 93% chance, Las Vegas 93% and Orlando 85%.
· The latest Genesis Group report emphasizes Denver's stable job growth, welleducated work force and quality of life as factors that will continue to help us weather the housing downturn more smoothly than most of the nation.
· Nationally, median home prices have fallen to a level 7.7% below a year ago. With a 5.5% decline over the prior year, Denver ranked among only a handful of cities with more moderate price declines. Only Seattle, Portland, Dallas, Charlotte and Boston fared better than Denver. On an annual average (all of 2007 vs. all of 2006), Denver prices are off only 1.6%. The bad news is the April
to April median price data - Denver prices are down 10.2% by that measure. Clearly, there are plenty of different measures from which to choose.
· Metro Denver's foreclosure count increased 16.8% in March, but foreclosures are now growing at a slower rate for the third month in a row. Our Q1 foreclosures are about 19% over Q1 2007. The state currently ranks 5th in the nation.
· In a certainly related development, bankruptcy filings rose to 4,205 in Q1 2008 compared to 3,083 in Q1 2007. Business bankruptcies also rose 28% over the same period of time.
· The Census Bureau reports that 2.9% of U.S. homes (2.28 million properties) are vacant and for sale - the highest quarterly number in records going back to 1956.
· Here's a scary number: Nationally, 51.6% of homes bought in 2006 are now worth less than their mortgage.
· Even though local building permit activity has increased, the totals are still 43.6% below a year ago at this time. Nationally, new home sales fell 8.5% between February and March and stands 36.6% down to a year ago - a new 17-year low. Early April returns at the national level show an 8.2% increase in housing starts,
led by a 36% increase in multi-family units.
· Metro Denver's rental vacancy rate increased slightly to 6.1% in Q4 2007, but the overall vacancy rate remains the lowest recorded since 2001. Averaging $860, rental rates remain relatively stable overall, up only 0.8% from the 2006 average.
· Metro Denver's office market vacancy rate remains unchanged so far in 2008 at 11.5%. Average lease rates are up slightly to $20.66 per square foot.
· An offshoot of downtown building activity: monthly parking rates in downtown Denver are rising an average 8 to 9 percent since 2006 as parking lots give way to new buildings and more companies move offices to downtown.
· Tight credit, construction costs and sluggish contract activity has several hotel projects on hold. The DIA Westin, Greenwood Village's Renaissance Hotel and two local Embassy Suites properties are among the more notable projects facing delays, scale-backs or even cancellation.
· Industrial vacancy rates have increased slightly as of Q1 2008 - up from 5.6% to 6.2%. Lease rates also increased to $5.11 per square foot.
· CB Richard Ellis reports that weakness in credit and housing is having an impact on the retail market. Q1 2008 has seen negative absorption, but 4.4 million sf of new retail space is currently under construction. Direct vacancy rates and lease
rates are still stable - 5.6% vacancy and $16.67 per square foot.

Source: The Denver Newspaper Agency Marketing Department (To view the entire Mile High Market Watch report, visit
http://www.denvernewspaperagency.com/adcenter/collateral/Mile%20High%20Market%20Watch%20May%202008.pdf. Monthly reports are only available for a certain period of time before being updated. I have archived previous monthly reports. Please email me at JessicasHomes@msn.com should you wish to obtain a copy of a prior month's report.)

Jessica Lynch

Your Lifelong REALTOR®

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