Denver continues to be a destination for people seeking a high quality of life with ample sunny days, year-round outdoor activities, concerts and sporting events, and world-class skiing. Several tech and aerospace companies have recently announced plans to relocate or expand their workforces in Denver including Karman+, RevGen Partners, PointsBet, and HNA Live.[1]
Denver’s employment metrics saw positive movement in 2022, with 3.4% job growth. As of November 2022, Denver had an unemployment rate of 3.3%, which is a year-over-year (YoY) improvement from 4.0% in November 2021 and a marked improvement over the unemployment high of 12.4% in May 2020.[2] Denver’s unemployment rate rebound was mostly driven by employment gains in trade, transportation & utilities (7.0k jobs or 2.4% YoY), education & health services (9.2k jobs or 4.8% YoY), and their largest industry, professional and business services (26k jobs or 8.8% YoY).[3]
RealPage estimates that slightly over 19,000 new apartment units will be delivered in Denver-Aurora-Lakewood in 2023. However, RealPage also estimates that approximately 18,000 units will be absorbed in the same period which could put slight downward pressure on occupancy. Annualized effective rent growth saw respectable gains of 5.3% as of 4Q 2022 while occupancy rates dipped slightly from 96.8% in 1Q 2022 to 94.4% in 4Q 2022.[4]
Denver’s economy is expected to slow in 2023, however job growth is projected to remain positive. Higher mortgage rates paired with low housing affordability should keep multifamily housing as an attractive alternative to homeownership.[5]
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Disclaimer: The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor. Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.
References:
[1] https://www.metrodenver.org/about/news-and-deals
[2] RealPage 4Q22 Denver Market Performance Summary (Pg. 3)
[3] https://data.bls.gov (https://www.bls.gov/regions/mountain-plains/data/employmentandunemploymentandwages_denver_table.htm)
[4] RealPage 4Q22 Denver Market Performance Summary (Pg. 1)
[5] https://www.cpr.org/2022/12/05/colorado-economic-forecast-inflation-rising-interest-rates/