University of Denver Community Residential Real Estate Trends
Economic Summary September, 2009
1. S E P T E M B E R 2 0 0 9
Economic Summary
Consumer confidence vs. spending will complicate quick recovery
Many analysts agree that recovery from the the largest percentage declines in natural
recession in coming quarters will be slower resources and construction, manufacturing,
than recoveries from previous downturns, and professional and business services.
partly because consumer spending seems Still, recent monthly increases in professional
unlikely to rebound quickly, according and business services employment could
to data collected by the Metro Denver indicate a stabilizing job market. The indus-
Economic Development Corporation (Metro try includes temporary and contract worker
Denver EDC) in its Monthly Economic employment, and an increase in these jobs
Summary for September 2009. tends to foretell a better labor market.
Improvement in the Mountain Region Metro Denver’s unemployment rate was
Consumer Confidence Index suggests 7.8 percent in both June and July. Despite
local consumers have an increasingly pos- recent increases, Metro Denver’s current
itive economic outlook, although survey unemployment rate is roughly two percent-
respondents are still voicing concern over age points lower than the nationwide rate.
uncertain job prospects and less-than-stellar
The decline in residential real estate seems
income growth.
to be slowing. According to the National
“Consumers are largely anticipating better Association of Realtors (NAR), a 7.2 per-
conditions, but that optimism has yet to cent increase in U.S. existing home sales
change their willingness to spend,” stated between June and July was the largest
Patty Silverstein, chief economist for the reported gain dating back to 1999.
Metro Denver EDC and president of
Metro Denver existing home sales increased
Development Research Partners. “This will
more than 6 percent between June and
hold recovery back, as consumer spending
July but remained 13.3 percent below sales
drives 70 percent of U.S. economic activity.”
from July 2008. The region’s average home
Consumers’ ability to spend is also in prices—while still below the prior year’s
question as the economy recovers, because levels—are beginning to firm as home sales
consumer wealth and access to credit has accelerate.
declined significantly. These factors are
Joe Hubert Looking ahead, consumer behavior indica-
certainly weighing on Metro Denver retail
tors and other economic drivers are likely
Office 720-529-1616 sales, which were down more than 13
to show mixed signals. Slow improvement
Cell 303-550-7989 percent year-to-date through May.
from one month or quarter to the next will
jhubert@ltgc.com
Metro Denver employers cut 9,400 jobs likely still result in weakened trends from
5690 DTC Blvd. between June and July, but seasonally prior years, at least until positive labor
Suite 650E adjusted data suggest the loss was market prospects and improved financial
Englewood, CO 80111 smaller than expected for this time of year. markets give consumers and businesses the
Office 303-770-9596 Year-to-date growth rates remained nega- resources they need for growth.
Fax 303-290-9040 tive in Jully for each of the 11 Metro Denver
Economic indicators for Metro Denver are
industry supersectors except education,
www.LTGC.com currently showing this mixed behavior.
health services, and government, with