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Monday, July 7, 2014

Colorado Pioneered the Art of Rejecting Olympic Games

I know that we're supposed to regard the rejection of the 1976 Olympic games as a mean and dastardly deed of the rubes who didn't want to pay millions through the nose for a luge and bobsled track that would never be used again. Personally, I always viewed it as a sign of the fierce independence of Coloradans. That is, we don't care if the cool kids like us or not. We're too busy enjoying our awesome state to care what some plutocrat on the the IOC thinks.

It turns out now that Colorado was just ahead its time. Krakow, Poland just joined the list of cities that have voted against their governments making a bid for the winter Olympics. (German and Swiss voters have also recently rejected the games.) Voters have finally figured out that hosting the Olympics - the Winter Games, at least - adds a lot more to the bad column than the good column. There's so little demand to host the 2022 games, in fact, that among the three finalists is Almaty, a city in Kazakhstan. Yes, Kazakhstan. The competition was that fierce. The other finalists are Oslo and Beijing. Even though winter sports are basically the national pasttime of Norway, Oslo may yet pull out, meaning the choice may be between two cities run by authoritarian dictatorships. Why are those cities so enthused about hosting the games? For one, their citizens aren't allowed to vote on it.

Wednesday, July 2, 2014

Initial unemployment claims in Colorado down 13 percent in May

Initial unemployment claims in Colorado fell to 2,713 during May 2014, dropping 13 percent, year over year, from 3,132 during May 2013. The first graph shows the general trend, which is clearly downward since the large surge during the most recent recession began in late 2008. May's initial claims were also down from April 2014, which reported a total of 3,133.

May's decline was the third month in a row during which initial claims dropped, year over year. Overall, May's drop at a level commonly seen during non-recessionary periods.
To check for seasonality, we compare to other Mays, and we find  that May 2014's total was the lowest May total since 2008, before the financial crisis. Claims are at a seven year low for May. 



New home sales in US West hit highest total since 2007

New single-family home sales in the U.S. West were up 30 percent from May 2013 to May 2014, coming in at 13,000 new homes sold, which was the highest total reported since August 2007.   

According to the most recent Census Bureau report on new home sales, new home sales in the West grew, year over year through 2012 and during much of 2012 and 2013.  For most of the first half of 2014 in the West, however, new home sales were down year over year in each month, but during May, new home sales surged to near an eight-year high. 

The report, which monitors sales activity for newly constructed houses, nonetheless showed that new home sales in the West remain down 65 percent from peak levels. 

The first graph shows monthly new home sales totals totals since 2000: 


Comparing monthly totals, we find that the first 4 months of 2014 were below or equal to the same month of 2013. In other words, 2014 was a lackluster year compared to 2013. Whether or not May's surge represents a new trend remains to be seen.



Meanwhile, the number of new homes for sale (as opposed to soldwas up 35 percent in May, year over year, rising from 31,000 during May 2013 to 42,000 during May 2014.  This reflects growth in new home production, which we know has increased throughout the region, including Colorado, in response to significant growth in home prices during 2013.  

But is new construction outpacing sales? We can guess at this by comparing actual sales with new homes for sale. 

To do this, we calculate inventory by subtracting the number of new home sales in a given month from the number of new homes for sale at the end of the previous month. We see in the graph that the inventory bottomed out in 2012, but has come up a little over the past year.  Inventory went back down with May's big month of sales. At this time, there does not appear to be a large inventory building. 

Colorado bankruptcies hit 8-year low in May 2014

According to the US bankruptcy court in Colorado, there were 1511 foreclosures filed in May 2014, which was the lowest May total filed since May 2007, and eight-year low. This puts bankruptcy activity back at pre-financial crisis levels.

The first graph shows foreclosures for each month compared to the same month in previous years:



There were 2,151 bankruptcy filigs during May 2013, and 1,527 during April of this year. 

We can also see form this graph that bankruptcies generally peak in March and decline through the rest of the year. 

The second graph shows the total number of bankruptcy filings in this time series from 2006 to May 2014.  We can see that, in the latest business cycle, that bankruptcy activity peaked during 2010 and 2011, and has been declining since. 



Bankruptcies have been declining, year over year, for the past 40 months. They were down 29.7 percent from May 2013 to May 2014. The final graph shows YOY drops: 



Overall bankruptcy activity continues to fall as employment remains relatively stable and interest rates remain relatively low, thus making debt service easier for consumers. 

Employed persons and labor force now back to peak levels

According to the household survey, the labor force in Colorado and total employed persons, are now back to peak levels, first reached during mid-2008. The establishment survey, which measures employer payrolls, has shown total payrolls back at peak levels for several months, but the household survey, which measures how many people who wish to be employed are actually employed, now shows that it took almost five years for the labor force to reach the old peak, and it took almost six years for total employment to regain its former peak.

The unemployment rate, which is calculated using the household survey, during May was 5.5 percent.  See here for more. 

According to the household survey, total employment peaked during July 2008. During May 2014, total employment is now 0.07 percent above the former peak.  The labor force size peaked during June 2009, and is now 1.9 percent above that level.

The first graph shows the trend over time:



From 2008 to 2010, Colorado employment fell 84,000 jobs, and then very slowly began to move back to the former peak over almost six years. 

Labor force size did not fall nearly as far, which of course, contributed to the very high unemployment rates following the 2008-2009 recession. 

To help remove seasonality and to let you compare each month, year over year, I've broken out the numbers by month in the second and third graphs: 




We can see that in recent months, the purple bars, which show the months of 2014, are well above the previous year (the dark blue bars). Both labor force growth and employment growth have accelerated in 2014. If we look at 2013's labor force, however, we see that growth was very small in much of 2013, which helped to push down the unemployment rate, but 2013's rather substantial declines in the unemployment rate did not reflect robust employment growth. For the month of May, we can see that May 2014's total for both labor force and employment were at new peak levels.

Finally, I'be graphed year-over-year growth to compare growth in labor force and employment. Note that employment has consistently outpaced labor force growth. This is not because employment growth has been so wonderful, but because labor force growth has been so lackluster. This has been a matter of discussion at the national level for some time, which labor force participation at 30-year lows. While healthier in Colorado than many places, the labor force does nonetheless reflect a significant number of discouraged workers and premature retirements in the face of a still-lackluster labor market. For comparison's sake, check out the situation at the end of the last expansion when labor force growth greatly outpaced new employment. At that time (early 2008) workers were still hopeful about the economy and considered themselves still in the labor force in spite of a slowly faltering economy. Today, potential workers are less sanguine about their chances.


1st Q 2014 vacancy survey for metro Denver single-fam houses, townhouses, condos



Tuesday, July 1, 2014

Central and northern Colorado 'doing better'

The NYT reports that, not surprisingly, people in some counties in the United States are struggling far more than others. Clay County, Kentucky was identified as one of the hardest counties to be in right now. As you can see, however, central and northern Colorado is doing relatively well by this metric. If you click on the link, the map there is interactive.

Here's the methodology:

Annie Lowrey writes in the Times Magazine this week about the troubles of Clay County, Ky., which by several measures is the hardest place in America to live.
The Upshot came to this conclusion by looking at six data points for each county in the United States: education (percentage of residents with at least a bachelor’s degree), median household income, unemployment rate, disability rate, life expectancy and obesity. We then averaged each county’s relative rank in these categories to create an overall ranking.


Colorado's 2013 GDP vs. US numbers

Last month, the BEA released new GDP data for each state. I've pulled out Colorado's numbers and compared them to the national GDP trend.

The first graph shows GDP totals indexed to base year 1997. We see that in terms of GDP growth, Colorado has been generally tracking with the nation overall, although performing a little bit better.

The second graph shows the year-over-year change in GDP for both Colorado and the US. After the 2008-2009 recession, Colorado failed to outperform the US, and really only began to pull away from the national growth rate in 2013. Not surprisingly, however, growth rates in neither case are rivaling the growth rates seen during the dot-com boom. National growth is more lackluster than that seen during the last expansion (2003-2008) although Colorado's growth appears to be getting back to growth rates experienced near the end of the last expansion.
 Colorado's growth from 2012 to 2013 was largely propelled by growth in the agricultural and mining sectors. Economic activity in mining, which includes oil and gas extraction, was up 33.9 percent in Colorado, compared to only 4.5 percent nationwide. Agriculture was up 33.7 percent nationwide and 37.4 percent in Colorado, from 2012 to 2013, and construction was up by 10 percent in Colorado while it was up 5.2 percent nationwide. Manufacturing growth in both cases was small.
The above analysis uses Gross Domestic Product in current dollars from the BEA. Not seasonally adjusted.

Compared to all other states, Colorado, like most other oil and gas producing states, showed strong growth rates, and was in the top category for growth. North Dakota which is in the midst of an enormous oil and gas boom, outperformed all other states.


Note: The map shows different growth rates because it uses the BEA's real GDP percent change in 2009 chained dollars.

CoreLogic: Home price index up 8.6 percent in Colorado

The latest CoreLogic home price index data, released today, shows declining growth rates at the national level, but little movement for Colorado. The index for May 2014 showed the year over year change for the nation at 8.8 percent, which is down significantly from Feb 2014's growth rate of 12.2 percent. Meanwhile the Colorado year over year change was 8.6 percent, which was the lowest in six months, but isn't a big change when compared to the last year's worth of growth rates. The graph shows both Colorado and the nation:


With a growth rate of 8.6 percent,  Colorado HPI growth continues at a steady pace, and only 11 states showed higher year over year changes in their HPIs. Only California, Florida, Georgia, Hawaii, Michigan, Minnesota, Nevada, New York, Oregon, Texas, and Washington reported larger increases. The largest increase was in Hawaii (13.2 percent) and the lowest was in Arkansas (1 percent).

RADCOS Completes $95.3M Buy, Colorado’s Largest for 2014

Denver—Opportunistic investment firm The RADCO Cos. has grabbed a 512-unit community in the Denver suburb of Lakewood, Colo., for $95.3 million from a local developer. The sale of Parc Belmar represents the company’s entrĂ©e in Colorado and is the largest multifamily transaction in The Centennial State this year.

Monday, June 30, 2014

Pending Homes sales drop 14 percent in US West region

The National Association of Realtors released May's pending home sales data today.



The US West region reported the largest year over year decline in pending home sales with a drop of 14.3 percent. The Northeast reported the smallest decline, with a 2 percent drop. Nationwide, the year over year drop was 6.9 percent.

Jusy eyeballing the graph, we see that the West region has seen some lackluster totals the past six months, while the midwest and south have remained rather robust. But overall, there's been little growth over the past year.

April NAR Summary: List price in metro Denver up 20 percent

The monthly housing summary from the National Association of Realtors for April 2014 is now available. Metro Denver and northern Colorado show price increases and sizable inventory declines. Pueblo, on the other hand, showed a decline in the median price, year over year, while the Colorado Springs median price was flat over the same period.

MSA_CityMedian List PriceMedianPrice_YY ListingsListings_YY
Denver  CO$340 00020.6% 6,088-12.7%
Colorado Springs  CO$253,9508.1% 4,7316.7%
Boulder-Longmont  CO$405,339-3.4%   2,075-4.9%
Fort Collins-Loveland  CO$298,9158.7%   2,198-6.5%
Pueblo  CO$154,4501.3% 937-1.9%

Listings are generally down which would make sense since a year ago, rocky bottom interest rates produced something of a buying frenzy and people were more easily able to move since they could get financing at cheap prices. Things have moderated a little bit, but are hardly collapsing. Home prices continue to move upward.

Not surprisingly, Pueblo shows some of the least home price growth.