McData, a Broomfield firm, is being purchased by Brocade Communications in San Jose, California.  Jobs losses are expected at the 570-employee Broomfield location.

Fort Carson in Colorado Springs began overseas training for over 200,000 part-time troops from 21 states in August.  This is likely to bring dozens of new jobs to the area.

A tighter labor market in Colorado means employers are offering various inducements to retain hourly workers, according to a Denver Post story.  Language Classes, transit passes, recruiting bonuses, free meals, gift cards and paid vacations are being offered.

 

 

Inflation: 

Inflation in the Denver/Boulder metro area averaged 3.8% in the first six months of 2006, the same as the national rate for that period.  Housing costs, up 4.1% nationally relative to July 2005, increased 1.6% in Colorado.  Over the last two years, this component as been falling in Colorado.  Apparel posted the biggest increase in the state, up 14.1%, followed by a 9.4% rise in transportation costs and a 6.6% increase in medical care.  From 2001 to 2005, inflation in Colorado averaged between 0.1% and 2.1%.

 

Education: 

Colorado has the third lowest state funding per pupil for higher education of any state, according to the National Center for Higher Education Management Systems.  Neighboring Wyoming ranks first, providing $12,354 per student.  Colorado provides a state appropriation or $127 per capita, up 3% in the last ten years; Wyoming provides $434 per capita, up 71%.  That is $3 per $1,000 of personal income in Colorado and $12 per $1,000 in Wyoming.

 

Poverty: 

The number of Coloradans falling below the poverty level rose from 8.5% in the 1998-2000 period to 10.4% from 2003-2005.  The state averages two to three percentage points below the national poverty rate.  Sixteen states had a lower poverty rate than Colorado over the past three years; the U.S. average was 12.6%.  Colorado’s child poverty rate was unchanged at 13.2% and black and Hispanic poverty rates were also unchanged at 24.8% and 21.8 percentage respectively.  The white poverty rate was 8.3%.  Median household income dropped slightly, from $52,792 in 2003-04 to $51,518 in 2003-05, above the national median of $46,071.  In 2004, the poverty level income for a family of three was $16,090.

 

Population: 

New reports from the Census Bureau show that Colorado’s population grew to 4,665,177 in 2005.  The median age rose from 34.4 to 34.7, as the large baby boom cohort ages.  The average household size inched up to 2.51 from 2.46, but family (64% of households) and married couple (50%) households declined.  The foreign-born population increased one percentage point to 10.1%.  83% of Coloradans speak only English and more than half of the rest speak English very well.  More Coloradans had high school (89%) and college (36%) degrees.

 

Tourism: 

The outdoor recreation industry in the eight-state Mountain Region contributed $61.5 billion to the U.S. economy in the 2001-02 season and added $8.9 billion to state and federal tax receipts.  It accounted for 617,000 jobs in the region, according to the Outdoor Industry Association.  Three-quarters of Americans participate in outdoor recreational activities.

The American Automobile Association reported that Labor Day travel in Colorado was up 10% in 2006, although people were vacationing closer to home.  About 84% of Coloradans traveled by car, while 11% traveled by plane.  Grand Junction, Colorado Springs, Denver and Aspen were the top in-state travel destinations.

The state’s hotel occupancy rate was up 2.3 percentage points to 63.4% through July.  The 75.4% occupancy rate for the month was identical to a year ago, although the average daily rate was up 7.2% to $113.94.  Durango, Aspen, Grand Junction and Glenwood Springs all had July occupancy rates above 80%, according to the Rocky Mountain Lodging Report.

$100.14 million in gaming funds were distributed in Colorado in 2006.  Since 1992, almost $1 billion has been distributed.  During the year casinos paid $106.1 million in gaming taxes on $765.4 million in adjusted gross proceeds.  July was the casinos’ best revenue month ever, a record $74.2 million in AGP, with 69% in Black Hawk.

 

Housing: 

There was little good news in the housing sector last month, either nationally or in Colorado.  Even though mortgage rates dropped a bit, mortgage applications to buy a home or refinance an existing loan dropped 1.2% to a four year low.  The monthly principal and interest costs per $100,000 are up 10% to $640 relative to a year ago. Closing costs averaged $3,024 with Colorado in 23^rd place at $2,988. Sales of existing homes fell 21.6% relative to a year ago and sales of new homes also declined, down 21.6%.  The monthly builders sentiments index fell to a 15-year low.

Locally, housing permits fell 5.4% through July, with single-family permits down 14.2%.  A record number of homes were for sale in metro Denver in July.  The median single-family home price fell, although sales of high-end homes pushed the average price up 3.6%.  It is important to keep the housing inventory in perspective; although record numbers of homes are for sale, the market is much larger than it was in the 1980s when the previous record was set.  For example, between 1990 and 2000, the number of housing units in the state increased 22.4%.   

The most useful survey of home prices is conducted by the Office of Federal Housing Enterprise Oversight, which looks at what happens to the price of the same house over time rather than the average or median price of all homes.  Nationally, price appreciation slowed to 1.17% in the second quarter from 2.2% in the first quarter, the sharpest deceleration recorded since the index began in 1975.  In Colorado, Weld County home values fell 0.35%, while value growth in other Front Range communities slowed with the exception of Grand Junction.

 

	Quarterly Change From 2005:2
Boulder	3.6%
CO Springs	5.9%
Denver	2.7%
Fort Collins	1.2%
Greeley	-0.35%
Grand Junction	14.1%
Colorado	4.2%

 

Sales of existing single-family homes fell 0.7% through August, according to the Denver Board of Realtors.  Condo sales were up 0.2%.  Sales of homes in the $200,000-$499,000 price range have declined, while sales in the lower and upper price ranges have increased.  The middle price ranges accounts for over two-thirds of sales.

Meanwhile, Colorado’s overall foreclosure rate continues to be three times the national average.  In the second quarter, metro Denver had the fourth worst foreclosure record in the nation, one foreclosure for every 128 households.  Colorado Springs had the 12^th worst record.  In August, Colorado Springs foreclosures increased 39.3% relative to a year ago and over the first eight months of the year were up 17.4%.  2006 is on pace to have the most foreclosures in 17 years.

The apartment vacancy rate in metro Denver decreased to 6.9% for the first quarter, down from 8.0% a year ago.  The rental rate increased 2.1% to an average of $843.85, according to Gordon von Stroh.  In Colorado Springs, the vacancy rate was 10.3% and the average rental rate was $687.44, up 4%.

 

Nonresidential Construction : 

The value of nonresidential construction in Colorado increased 12.1% through July.  Metro Denver contracts declined 13.05, while Colorado Springs contract value more than doubled.

Frederick Ross Research reported that the Denver office vacancy rate continued to decline in the first half of 2006, for the third consecutive year.  The Northwest Denver market, which saw its vacancy rate soar to 53.3% in 2001 from 11.4% a year earlier, now has  21% vacancy rate.  The retail vacancy rate of 5.0% is the lowest in ten years, while the 7.9% industrial vacancy rate is the lowest since 2001.

Cushman & Wakefield reported a 13.1% office vacancy rate for Denver’s Central Business District in the second quarter, down from 16% a year ago.  Class A lease rates increased 5.8% to $23.15 per square foot, while Class B rfates rose 8.9% to $19.12.

Grubb & Ellis reported that Denver has experienced record-breaking capitalization rates and price-per-square-foot values for office and retail properties of every class and size.  Private equity investors are the driving force.