Report Written By:
Elliot F. Eisenberg, Ph.D.
Economic Overview
Nationally
By: Elliot F. Eisenberg, Ph.D.
The national economy turned in a strong performance in 2024, with GDP again exceeding expectations, although inflation remains somewhat elevated as a result. Third quarter GDP growth was impressive at 3.1%, although the fourth quarter is likely to be slightly lower but still solid at 2.25%. Wage growth has fluctuated over the past several quarters, declining from 5.9% to 3.6% but is projected to be 4% for 24Q4. Productivity was up a superb 2.2% in 24Q3, linked to continuing gains from investments in machinery during the pandemic, a large number of new firms, and higher personal productivity resulting from job shifts. December saw surprisingly strong employment growth, with the unemployment rate declining to 4.1%. Government spending is also driving GDP growth, but with an accompanying rise in the deficit, which has long-term implications for Treasuries, and thus also mortgage interest rates.
“...consumer spending remains strong due to surging household wealth, which hit an all-time high of $168.8 trillion in 24Q3, driven by huge gains in home equity and retirement portfolios.”
Despite mildly slowing income growth, consumer spending remains strong due to surging household wealth, which hit an all-time high of $168.8 trillion in 24Q3, driven by huge gains in home equity and retirement portfolios. However, lower-income families are increasingly facing difficulties as inflation continues to cut into household budgets, but this has not yet translated into a meaningful decline in consumer spending. Overall, 2024 was a year of consistent overperformance, driven largely by improved supply chains and strong consumer spending, and supported by relatively low unemployment rates.
While the Fed cut interest rates 100 basis points over the last three meetings in 2024, a response to a weakening labor market and declining inflation, markets pushed long-term rates back up, particularly the 10-year treasury and, as a result, the all-important 30-year mortgage rate. The rate reversal resulted from recent Fed signals suggesting a more cautious approach moving forward, reflecting concerns about still-toohigh inflation and the potential for inflationary impacts from some of President Trump’s key policy proposals. First, the implementation of tariffs is likely to raise inflation in the short run, as tariffs will increase the costs of imported goods, and this inflationary effect may persist for a year or two if there are retaliatory measures from other countries. Secondly, more restrictive immigration policies could lead to wage increases, as a shortage of workers in various sectors, such as restaurants, hotels, agriculture, and construction drive up labor costs, contributing to higher prices. Lastly, if Congress agrees to extend existing tax cuts, it will most likely worsen the federal deficit, leading to increased government borrowing, which will put upward pressure on interest rates.
Looking ahead to 2025, GDP growth is expected to moderate but remain solid. While fears of recession and stagflation have clearly lessened, the Fed’s ability to manage inflation remains in the spotlight. Dr. Eisenberg comments: “While the Fed will certainly lower interest rates in 2025, the real issue is how many cuts will there be. They have signaled two quarter-point cuts in 2025, but I suspect there will be more because inflation is weaker than it appears. For example, in the last six months, annualized PCE inflation is at the Fed’s target of 2%, but there are a multitude of variables at play with the new Congress and Administration. However, the economy enters 2025 very strong and can withstand many policy shocks.”
Housing Market Overview
Nationally
At the national level, November existing home sales reached a seasonally adjusted annualized rate of 4.15 million, which was a 6.1% increase year-overyear, the largest gain since June of 2021. However, closed sales are still at levels last seen during the Housing Bust, or prior to that, during the mid-1990s. The median sale price for existing homes rose to $406,100 in November, an increase of 4.7% over last year and the 17th consecutive month of year-overyear price increases. Nationally, the inventory of homes available for sale is 3.8 months’ supply, up from the lows following the pandemic, but still well
elevated because completions are up, household formation and rent growth have slowed, and vacancy and borrowing costs are up. The office space market, with a 20.4% vacancy rate, is also struggling due to remote work trends, but as more companies mandate return-to-office, there may be some recovery, and A-Class office space is doing well. Commercial lenders have mostly adopted a “pray and delay” strategy and we have not yet seen a meaningful level of commercial foreclosure activity.
“Dr. Eisenberg comments: “I expect housing sales activity in 2025 to be slightly better than 2024; a hoped-for decline in rates will help, but just as importantly,...”
below what would be considered a balanced market. This continues to push home price appreciation up, although at a slightly slower pace. Although high prices and a lack of available inventory play a part, the housing market remains constrained primarily due to high interest rates, which hover around 7%. Studies show that for a meaningful number of homeowners to be motivated to sell, interest rates need to be in the 5% range.
On the new housing front, single-family home construction is anticipated to remain at or slightly above current levels, despite high rates and challenging construction costs as demand remains solid. Builders have adjusted by building smaller, more space efficient homes and are incentivizing buyers with mortgage buy-downs. In the multifamily sector, Fannie Mae recently reported that the multifamily 60+ day delinquency rate is at the highest level since early 2011 (excluding Covid), when it was declining from the Housing Bust peak. The rate is
Dr. Eisenberg comments: “I expect housing sales activity in 2025 to be slightly better than 2024; a hoped-for decline in rates will help, but just as importantly, so will the pent-up demand of buyers, whether move-up or first-time, who can no longer wait for rates to come down. Additionally, if the job market remains as robust as it has the last several months, then we will undoubtedly see more housing demand. On the not-so-bright side, the escalating scope and cost of natural disasters, exemplified by the East Coast hurricanes and storms and the West Coast fire disasters, are certain to push home insurance premiums up across the country, and especially so in high-risk areas. This will add additional pressure to housing costs over time.”
Economic Overview
Colorado
The unemployment rate in Colorado in November was 4.3% compared to 3.3% a year ago and a peak of 11.7% in May 2020. For comparison, the pre-pandemic rate was 2.8%. Over the last year, Colorado’s unemployment rate has trended similarly to the national rate, which for November was 4.2%. Statewide, the December 2024 median price of a single-family home was $575,000, up from $549,000 a year ago, while the year-over-year average price gained 4.6% to $735,996. In the condo/townhome market, the year-over-year median price dipped 2.7% to $413,317, while the average price was almost unchanged at $596,425. For the year, closed sales across the state were unchanged from last year at 85,335, while new listings are up 10.8%
“Like an increasingly large number of areas around the country, the Centennial State is experiencing a normal market correction following a period of rapid price increases that outpaced income growth.”
compared to 2023. There were 19,459 active listings statewide at the end of December, up 8.9% compared to last year and representing 2.7 months’ supply of inventory. Across the state, the percentage of list price received at sale in 2024 was 98.7%, down from 99.0% in 2023, while the average home spent 55 days on the market until sale in 2024, up from 49 days in 2023.
In terms of the Colorado statewide housing market, most metrics point to a weakening one. Prices are mixed, with single-family prices generally up slightly and multifamily homes flat to down slightly. After accounting for inflation, however, prices are, at best, up slightly. Like an increasingly large number of areas around the country, the Centennial State is experiencing a normal market correction following a period of rapid price increases that outpaced income growth. Add in increased interest rates, a slightly weaker labor market, changing demographics, and now return-to-office mandates, and a slightly slowing market is unsurprising.
2023 vs 2024
2023 vs 2024
Dillon/Keystone
Single Family Homes
$1,495,000 $1,487,500 2023 vs 2024
Avg Sold Price per SF 5% $623 $594 2023 vs 2024
2023 vs 2024
2023 vs 2024
2023 vs 2024
2023 vs 2024
Frisco/Copper Mountain
2023 vs 2024
2023 vs 2024
Silverthorne
Park County
Property Collection
132 N Gold Flake Terrace, Breckenridge
6 BD | 8 BA | 7,446 SF Offered for $12,490,000
27 Boulder Circle, Breckenridge
6 BD | 8 BA | 5,260 SF Offered for $6,995,000
59 Gold Run Road, Breckenridge
5 BD | 6 BA | 5,880 SF Offered for $4,600,000
105 Christie Lane, Breckenridge
6 BD | 6 BA | 5,880 SF Offered for $4,599,000
Paradise in Breckenridge
$3,495,000 TRAIL ACCESS FROM THE DECK
5 BEDS | 5F, 1H BATHS | 4,374 SF 120 WINDWOOD CIRCLE, BRECKENRIDGE
Highlands at Breckenridge Lot
$1,950,000 CUSTOM HOME SITE
2 ACRES
870 HIGHLANDS DRIVE, BRECKENRIDGE
True Mountain Sanctuary
$1,909,000 OVERLOOKING THE RAVEN
4 BEDS | 4F BATHS | 3,214 SF 1780 FALCON DRIVE, SILVERTHORNE
Minutes from the Heart of Breck
$1,750,000 IDEAL LOCATION
4 BEDS | 4F BATHS | 2,228 SF 96 SHEPPARD CIRCLE, BRECKENRIDGE
Blocks from Frisco Main Street
$1,125,000 COMFORT & CONVENIENCE
2 BEDS | 2F BATHS | 953 SF 310 S 8TH AVENUE, #A, FRISCO
Charming Riverfront Retreat
$1,059,000 IN THE HEART OF SILVERTHORNE
2 BEDS | 2F BATHS | 979 SF 421 RAINBOW DRIVE, #12, SILVERTHORNE
Mountain Modern Gem
$1,000,000 BRAND NEW IN SILVERTHORNE
2 BEDS | 2F BATHS | 1,100 SF 37 W 4TH STREET, #306E, SILVERTHORNE
Large Building Site
$825,000 EXCEPTIONAL MOUNTAIN VIEWS
1.39 ACRES
247 S FULLER PLACER RD, BRECKENRIDGE
Dream Highlands Building Site
$799,999 BRECKENRIDGE GOLF COURSE
0.50 ACRES
47 MARKSBERRY WAY, BRECKENRIDGE
Custom Features Built-in
$715,000 NO SHORT TERM RENTAL CAPS
2 BEDS | 1F BATHS | 956 SF 907 BOBCAT LANE, FAIRPLAY
Lower Valley of the Sun
$295,000 QUIET AREA, READY TO BUILD
9.5 ACRES
122 ARTS PIKE, FAIRPLAY
Perfect Building Site
$224,000 WELL TREED & IDEAL LOCATION
6 ACRES 1047 LUMBERJACK ROAD, FAIRPLAY
2 Blocks to Frisco Main Street
$769,000 ROYAL MTN VIEWS
2 BEDS | 2F BATHS | 960 SF 200 GRANITE STREET, #202, FRISCO
Charming & Cozy Studio
$450,000 SHORT WALK TO GONDOLA
STUDIO | 1F BATHS | 432 SF 23110 HWY6, #5056, KEYSTONE
Peak View Subdivision
7 LOTS STARTING AT $225,000
MINIMUM 5 ACRE LOTS
PLATTE RIVER DRIVE, FAIRPLAY
2 Vacant Lots South of Breck
$150,000 FOR EACH LOT
0.55 ACRES
525 & 555 CR 805, BRECKENRIDGE