Pearl Street in Boulder, Colorado

Pearl Street in Boulder, Colorado

Downtown Berthoud businesses. (Photo: Rachel Rose Boucher/Shutterstock)

Downtown Berthoud businesses. (Photo: Rachel Rose Boucher/Shutterstock)

Tom Kalinski, RE/MAX of Boulder

Tom Kalinski, RE/MAX of Boulder

The outlook of Colorado business leaders on the state’s economy took a positive turn in the Q2 2024 Leeds Business Confidence Index (LBCI), following two consecutive years of negative business confidence ratings. 

The upswing bodes well for the state, including local residential real estate markets to continue to maintain and grow their value. Colorado’s housing market has long been noted for strong performance in growth and stability, with Boulder and Fort Collins ranking in the top five housing markets for growth and stability in the 2023 SmartAsset report.  

One key factor that impacts the housing market is the overall health of the economy, including employment data, according to Investopedia. The latest LBCI report reveals that business leaders across Colorado express positive perceptions across all six economic components measured by the index, including the national and state economies, industry sales, profits, hiring plans and capital expenditures, which all registered an uptick in confidence levels. 

Survey respondents attributed their positive outlook to several primary influencers, including general economic conditions, politics and interest rates at 32%, 31% and 27% of respondents, respectively. 

For the state economy, 38.8% of respondents are neutral on the outlook, while 38.2% expect a moderate-to-strong increase and 23% expect a decrease. On the national level, 34.8% expect an increase versus 31.5% projecting a decrease and 33.7% remained neutral.

Several critical economic metrics underscore the current situation. Inflation in the Denver-Aurora-Lakewood metropolitan area improved to 3.5% in January 2024 and is projected to remain above 3% in 2024, according to the Business Research Division’s (BRD) forecasting model.  

In construction starts, the nominal value rose 18.7% year-over-year in February 2024, with both residential and non-residential posting increases, according to Dodge Data and Analytics. The gains are a welcome improvement over 2023’s 11.2% decrease.

Statewide employment growth increased 2.5%, or 72,700 jobs, in 2023 and continued into 2024, with 60,300 jobs added in February 2024, growing 2.1% year-over-year.  Colorado’s per capita personal income increased 4.2% year-over-year in 2023, ranking Colorado 7th.  

Nationwide, expectations for a softening labor market are waning. The May jobs report showed more than 272,000 new jobs were added during the month, which outpaced expectations, reported the U.S. Bureau of Labor Statistics (BLS). Employment continued growing in several industries, led by health care, government, leisure and hospitality, and professional, scientific and technical services.

Colorado’s February unemployment rate was 3.5%, 0.4 percentage points below the national average, putting the state in a tied position of 27th in the country. The state had the fourth-highest labor force participation rate in February, at 68.1%.  

The national unemployment rate was less encouraging, ticking up to 4%, a high mark from February 2022 through April 2024, when the nation’s unemployment maintained historically low levels ranging between 3.4% and 3.9%. 

The rising business confidence in Colorado and favorable national employment trends paint a promising picture for the value of residential real estate continuing to hold steady. As economic conditions continue to improve and employment opportunities expand, the demand for housing is likely to remain robust.

Read the complete Leeds Business Confidence Index report at colorado.edu/business/brd/publications/2024/04/02/leeds-business-confidence-index-lbci-q2-2024.

By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, e-mail Tom at [email protected], call 303.441.5620 or visit boulderco.com.