Colorado Economic Report

2018 A YEAR IN REVIEW

COLORADO ECONOMIC REPORT

WELCOME The 2018 Economic Report, compiled by LIV Sotheby’s International Realty, provides extensive details of the Colorado market, comparing critical factors, year over year.

The information within this report includes a review of key economic indicators, that affect the Colorado real estate market (both commercial and residential), and a detailed look at the performance of various Colorado markets.

The Colorado market is ever-changing. In order for each of us to maximize our value, there’s a greater need to review and understand the market trends in each of the very diverse Colorado cities and neighborhoods. Low inventory, increasing demand and appreciating home values were the leading drivers of the 2018 real estate market. A section within this Economic Report is focused on the Colorado Micro Markets, revealing record-breaking home prices, significant increases in properties sold, and extraordinary decreases in average days on market.

Understanding the market is a critical piece to real estate success for both buyers and sellers. We are proud to provide this report as a detailed resource for consumers to make informed decisions about their financial future and to make living in Colorado a dream come true!

R. SCOTT WEBBER President LIV Sotheby’s International Realty

As we begin the new year, the economic picture is strong. While most economists expect the economic expansion to continue, albeit at a somewhat slower rate (primarily given the long-term trend of higher interest rates and the current length of economic expansion), positive economic indicators such as consumer confidence, job creation, and population growth remain intact.

Consumer confidence in Colorado, which is particularly important to real estate, dipped during the last two months of 2018, due to political, equity market and interest rate volatility. Even after this dip, the consumer confidence level remains positive and supportive of future growth (a reading of over 100 indicates the expectation of continued economic expansion, and we currently stand at 144).

Employment, which is also key to our continued economic strength, continues to grow at a record pace. During the last 12 months, the total number of jobs in Colorado grew to over three million, up almost 3% from a year prior. Even more striking is that 25% of companies now anticipate added workers in the next 12 months, which is up dramatically from 20% of those companies surveyed this time last year.

While jobs are quickly being created here, even more educated and affluent leaders moving from around the globe continue to make Colorado their new home (which is one reason that unemployment ticked up, even given the dramatic increase in jobs). Over the past 12 months, over 80,000 people have moved here (the seventh-fastest growing state) and over the past eight years we have added almost 700,000 residents to our state (the fourth-fastest growing state).

Please read on for more specifics regarding the economic data and visit ColoradoMarketReports.com for additional information.

STEVEN KIRBY Executive Vice President, Financial Officer LIV Sotheby’s International Realty

2018 Key Economic Indicators

THE COLORADO ECONOMY 2017 Total Jobs

2018

2,930,000

3,006,000

Unemployment Rate

3.0%

3.3%

% of Colorado Companies Expecting to Add Workers

20%

25%

Consumer Confidence Index

155

144

Data source: Bureau of Labor Statistics

PUTTING DATA INTO ACTION • Given the strong economic backdrop, job creation and population growth, the demand for agents’ expertise and services has never been higher.

• Clear and frequent communication during times of high volatility is absolutely critical to building a stronger/larger sphere of influence.

• As supply increases, approaching the supply/demand equilibrium, the value of a broker is maximized.

COLORADO REAL ESTATE Colorado real estate, whether you are examining commercial real estate or residential real estate, continues to improve in a number of ways. Commercial real estate health in Colorado is incredibly strong. Retail and office assets continue their trend of falling vacancy rates, while multifamily and hotel occupancy rates moderated slightly due to the tremendous supply that has been delivered in recent years.

Metro Denver Commercial Real Estate Health

2017

Industrial Vacancy (colliers.com)

2018

% Change

4.8%

4.8%

0.0%

Office Vacancy (colliers.com)

10.5%

10.2%

-2.9%

Retail Vacancy (colliers.com)

4.9%

4.7%

-4.1%

Multifamily Vacancy (metrodenver.org)

5.5%

5.6%

1.8%

Hotel Occupancy (metrodenver.org)

79.9%

79.6%

-0.4%

Commercial Building Permits (census.gov)

16,172

13,412

-17.1%

Due to limited supply (we see supply continuing to increase, rapidly approaching an equilibrium), total home sales were down over the past 12 months by 8% and building permits grew. Also indicative of low supply, days on market continued to fall (46 days), foreclosures are at historically low levels, and single-family prices continued to rise (+7%).

Colorado Residential Real Estate Health

2017

Resort (Vail) Luxury Closings Up, Residential Sales (coloradorealtors.com) DaysHome on Market Down

500

438 Foreclosures (census.gov)

400

348

Residential Building Permits (census.gov) 277

300

Days on Market Until Sale (coloradorealtors.com) 200

200

Average Single-Family Sales Price (coloradorealtors.com)

100

2018

% Change

59,697

54,818

-8.2%

2,981

2,771

-7.0%

24,916

25,228

1.3%

49

46

-6.1%

$432,272

$462,786

7.1%

0

Vail # luxury of Closings home market ($1M+), Vail Day sboth on Market Examining the metro and resort communities in Colorado continue to see the 2015 2018 number of sales rise, average sales prices rise, and days on market fall.

Metro Denver Luxury Closings Up, Days on Market Down 2,000

Resort (Vail) Luxury Closings Up, Days on Market Down 500

1,744

400

1,500 1,000

1,026

348 277

300

200

200

500 0

438

103 Metro Denver # of Closings

89

Metro Denver Days-on-Market 2015

100 0

Vail # of Closings

2018

Vail Day s on Market 2015

2018

Metro Denver Luxury Closings Up, Days on Market Down

Data source: Colorado Association of Realtors 2,000

1,744

DENVER:

Mile High City

GENERAL • Denver is the 19th largest city in the U.S. • Median household income is $76,643 • Elevation of 5,280 feet • Home to more than 700,000 people • Denver’s median age is 34 years old LIFESTYLE • More than 70 immediate neighborhoods

4.31% from 2017

• Tax funds of $40 million annually to support scientific and cultural organizations • Home to 7 professional sports teams WORKFORCE • Unemployment rate is at a low of 2.2% in Denver • Major employers include: United Airlines, University of Denver, Southwest Airlines, Frontier Airlines, HealthONE Medical Centers, and Kaiser Permenente EDUCATION • Eleven 4-year colleges and universities • Six 2-year community colleges HOUSING • In Denver, 50% of homes are owned, not rented • Average citywide rent is $1,497 for a one-bedroom • Average home price in Denver metro area is $463,288

8.2% from 2017

Data source: United States Census Bureau

Panoramic mountain views, a strong economy, trendy restaurants and entertainment, and a heart for innovation, are just a few of the reasons many people are proud to live in the Denver Metro.

Zillow recently ranked Denver as the #3 hottest housing markets of 2019, meaning more and more buyers are expected to call the Denver Metro their new home.

LIV Sotheby’s International Realty reports on the Denver Metro’s real estate market, sectioning into 54 neighborhoods. Collectively, comparing the results of 2018 to 2017, average price showed a significant increase of 8.2% from $428,050 in 2017 to $463,288 in 2018. New listings also increased, while sold listings reported a slight decrease. However, even with the decrease of sold listings, total dollar volume sold still increased by 2.6% from 2017 – highlighting the fact that average price increased as a whole in the Denver Metro area.

Across the 54 neighborhoods there are notable increases in average January through December 2017 2018 % Change price and properties sold, as well New Listings 61,073 62,203 1.9% as decreases in average days on Sold Listings (All Properties) 54,328 51,498 -5.2% market, comparing 2018 to 2017.

Sold Single Family 38,278 36,227 -5.4% The Golden Triangle neighborhood Sold Attached Dwellings 16,050 15,271 -4.9% saw an exciting 31.2% increase Average Price $428,050 $463,288 8.2% in average price, from $465,492 Average Days on Market 35 39 11.4% in 2017 to $610,718 in 2018. Bell % Sold Price to Original List Price 99.0% 98.8% -0.2% Mountain Ranch and Ken-Caryl Total Dollar Volume Sold $23,255,121,432 $23,858,388,304 2.6% North Ranch reported an increase Counties: Adams, Arapahoe, Broomfield, Denver, Douglas, Jefferson of around 50% in properties Attached Dwellings Include: Condos, Townhomes, and Duplexes sold. Many neighborhoods saw extraordinary decreases in average days on market with four at decreases of 40% or more: Cherry Creek East & South, Heritage Greens, Pradera & Timbers, and Uptown. With a decrease of 59.5% in average days on market to just 32 days in 2018, Uptown reported the most significant decrease.

DENVER METRO

With the increase of Metro Denver buyers both within and outside of the state, buyers should be prepared to act quickly when their Metro Denver dream-home is found. The initial start to 2019 anticipates a very busy year for both buyers and sellers. The typical desire for a seller to wait and list their home during the spring and summer months may prevent sellers from benefiting with the current lack of inventory. Metro Denver has proven to be, and will most likely continue the path to be, an extremely hot market. To view the complete Micro Market Report for Denver Metro, visit ColoradoMarketReports.com.

Based on Information from REColorado. This representation is based in whole or in part on data supplied by REColorado.

REColorado does not guarantee nor is in any way responsible for its accuracy. Data maintained by REColorado may not reflect all real estate activity in the market.

BOULDER:

Let Your Light Shine

GENERAL • Boulder is the 11th largest city in Colorado • Median household income is $80,834 • Elevation of 5,328 feet • Home to more than 108,000 people • Boulder’s median age is 37 years old LIFESTYLE

6.05%

• More than 11 immediate neighborhoods

from 2017

• Boulder has a “blue line” which deters expanding structures over 4 stories that would prevent views of the mountains • Bicycling is so popular in the city that the Boulder Creek bike path is often cleared of snow before the roads WORKFORCE • Unemployment rate is at a low of 1.9% in Boulder • Major employers include: Medtronic PLC, Boulder Community Health, IBM Corporation, Ball Aerospace, and Good Samaritan Medical Center EDUCATION • Three 4-year colleges and universities HOUSING • In Boulder, 48% of homes are owned, not rented • Average citywide rent is $1,852 for a one-bedroom • Average home price in Boulder area is $657,387

Data source: United States Census Bureau

9.3% from 2017

The ever-popular Boulder County offers an unmatched lifestyle including easy access to nature and bike paths, great walkability, a vibrant economy, a community feel, and a healthconscious environment. With an increase of demand for real estate in Boulder County, buyers were having to act quicker and pay more in 2018 than in 2017.

The Boulder County Micro Market Report by LIV Sotheby’s International Realty indicates this rise in demand with a 9.3% increase in average price from $601,432 in 2017 to $657,387 in 2018, in addition to a decrease in average days on market by 3.4%. Interestingly, new listings and sold listings saw a decrease while total dollar volume sold increased by 5.9%. This decrease in inventory combined with an increase in total dollar volume sold represents a very healthy and active market.

Numerous neighborhoods within Boulder County reported strong in 2018, January through December 2017 2018 % Change with an increase of average New Listings 6,183 6,048 -2.2% price and a decrease of Sold Listings (All Properties) 4,730 4,580 -3.2% average days on market.

Sold Single Family 3,405 3,230 -5.1% North Boulder & Gunbarrel Sold Condo 1,325 1,350 1.9% displayed a complimenting Average Days on Market 59 57 -3.4% mix of these two metrics Average Price $601,432 $657,387 9.3% with a 4.2% increase in % Sold Price to Original List Price 98.6% 98.6% 0.0% average price and a 15.6% Total Dollar Volume Sold $2,844,170,548 $3,010,832,135 5.9% decrease in average days All Properties on market. University Hill & Chautauqua presented the highest increase in average price of 25%, from $1,137,824 in 2017 to $1,422,613 in 2018.

Lafayette saw the most dramatic decrease in average days on market, dropping 22.2% from 54 days in 2017 to 42 days in 2018.

BOULDER COUNTY

Boulder County continues to rank as one of the happiest and healthiest areas in the country, driving potential buyers to invest in the sought-after Boulder lifestyle. To view the complete Micro Market Report for Boulder, visit ColoradoMarketReports.com.

Based on Information from IRES, LLC and REColorado. This representation is based in whole or in part on data supplied by IRES, LLC and REColorado. IRES, LLC and REColorado does not guarantee nor is in any way responsible for its accuracy. Data maintained by IRES, LLC and REColorado may not reflect all real estate activity in the market.

SUMMIT COUNTY:

Main Street of the Rockies

(Breckenridge, Copper, Keystone, Frisco, Dillon, Silverthorne, etc.)

GENERAL • Summit County is the 19th most populated region in Colorado • Median household income is $70,192 • Breckenridge has the highest quad chairlift in the U.S. • Home to more than 29,000 people • Summit County’s median age is 38 LIFESTYLE

3.25% from 2017

• Summit County has four planning basins and six incorporated towns • Breckenridge is the oldest town in Summit County and serves as the County seat • The average annual snowfall varies greatly within Summit County: Arapahoe Basin receives more than 30 feet per year; Copper Mountain receives nearly 20 feet; while the town of Silverthorne gets only slightly more than 10 feet WORKFORCE • Unemployment rate is at a low of 2.4% • Specialized in Arts & Entertainment, Recreation, Hospitality, and Real Estate EDUCATION • There are two Colorado Mountain College locations in Summit County; Dillon and Breckenridge HOUSING • In Summit County, 68% of homes are owned, not rented • Average county-wide rent is $1,550 for a one-bedroom • Average home price in Summit County is $749,679

Data source: United States Census Bureau

7% from 2017

Summit County (Breckenridge, Copper Mountain, Keystone, Frisco, Dillon, Silverthorne, etc.) offers an unparalleled quality of life with ample year-round activities, a community feel, and breathtaking mountain vistas at every turn.

Ideally located on the western side of the Continental Divide and less than a two-hour drive from Denver, Summit County attracts buyers from around the world. Comparing the market results of 2018 to 2017 shows a rise in competition with average price increasing by 7%, yet listings sold decreasing slightly by 5.4%. In addition, total dollar volume sold increased by 1.1%. These three metrics prove that 2018 was a healthy market as buyers were willing to pay more and less properties were available for purchase – a very positive trend for sellers. Potential buyers also saw major benefits as average days on market increased, allowing buyers more time to make home purchasing decisions.

Highlights from Summit County include an impressive increase of 30.4% in average price for all properties in Dillon/ Summit Cove, increasing from $425,769 in 2017 to $555,036 in 2018. While single family homes and condos, townhomes and duplexes showed an increase in average price – condos, townhomes and duplexes in Dillon/ Summit Cove saw the largest increase for the area of 30.7%.

Copper Mountain presented extraordinary results, especially for single family homes, with a 56.9% increase in average price, from $2,231,250 in 2017 to $3,500,000 in 2018. In addition, average days on market decreased a notable 22.1% to 325 days for single family homes. Including all property types, Copper Mountain saw a 17.7% increase in average price and a 44.4% decrease in average days on market, to a noteworthy 70 days in 2018.

SUMMIT COUNTY January through December Sold Listings (All Properties) Sold Single Family Sold Condos/TH/DP Average Days on Market Average Price % Sold Price to List Price Total Dollar Volume Sold

2017

2018

% Change

1,973

1,866

-5.4%

571

545

-4.6%

1,402

1,321

-5.8%

62

75

21.0%

$700,377

$749,679

7.0%

98.4%

98.50%

0.1%

$1,381,843,993

$1,396,652,808

1.1%

All Properties

Breckenridge/Blue River, Frisco, Keystone, and Silverthorne/Wildernest areas presented positive results with increases in average price. Frisco reported a 19.3% increase in average price, landing at $782,105 in 2018. All areas also showed a decrease in days on market for single family homes, with Keystone reporting the most dramatic dip of 56.2% to only 99 days in 2018.

As a popular market, Summit County continues to attract buyers who are looking for the desired Colorado mountains lifestyle, without being too far from Denver. Many second-home owners within Summit County come from the Front Range because of this close proximity. To view the complete Micro Market Report for Summit County, visit ColoradoMarketReports.com.

Based on Information from SAR MLS. This representation is based in whole or in part on data supplied by SAR MLS. SAR MLS does not guarantee nor is in any way responsible for its accuracy. Data maintained by SAR MLS may not reflect all real estate activity in the market.

VAIL VALLEY:

Like No Place on Earth

(Vail, Beaver Creek, Avon, Eagle, Edwards, etc.)

GENERAL • The town of Vail is the 74th most populated in Colorado • Median household income in Vail is $73,981 • Elevation of the town of Vail is 8,022 feet • Vail is home to more than 5,483 people • Vail’s median age is 39 years old LIFESTYLE

7.9% from 2017

• An estimated 1.3 million visitors travel to the Vail Valley each year • Vail Pass was named after Charles Vail, the engineer who routed Highway 6 through the Eagle Valley in 1940, which eventually became I-70 • The ski area was founded by Pete Seibert and Earl Eaton in 1962, at the base of Vail Pass WORKFORCE • Unemployment rate is at a low of 3.5% for Vail Valley • Specialized in Arts & Entertainment, Recreation, Hospitality, and Real Estate • Major employers in the valley include: Vail Resorts, Eagle County Schools, Vail Valley Medical Center, and Eagle County Government EDUCATION • There is one Colorado Mountain College location in Vail Valley HOUSING • In the town of Vail, 63% of homes are owned, not rented • Average county-wide rent is $1,750 for a one-bedroom • Average home price throughout Vail Valley is $1,254,810 Data source: United States Census Bureau

11.1% from 2017

The benefits of living in the Vail Valley (Eagle County) are endless, including year-round activities, a tight-knit community feel, high-end shopping and dining, and spectacular mountain views.

Attracting buyers from around the world, the Vail Valley real estate market continues to prove as healthy and active.

2018 resulted in a year of high demand for Vail Valley real estate with an 11.1% increase in average price, combined with a 6.5% decrease in average days on market. In addition, sold listings also decreased by 2%, but total dollar volume sold increased by 8.8%. This increase in average price and total dollar volume sold, combined with a decrease in average days on market and sold listings means sellers benefited in 2018 as buyers were acting quick and paying more. Buyers also benefited as the sold price to list price percentage remained flat (meaning buyers were paying what they were expecting to pay).

A notable highlight for the Vail Valley is an outstanding 171.3% increase in average price for the Vail Golf Course/Spraddle Creek neighborhood, from an average price of $2,217,462 in 2017 to $6,016,275 in 2018. Beaver Creek also reported an impressive increase of 100% in single family homes sold, from 10 in 2017 to 20 in 2018.

EAGLE COUNTY January through December

2017

2018

% Change

1,376

1,348

-2.0%

Sold Single Family

493

501

1.6%

Sold Condos/TH/DP

883

847

-4.1%

Average Days on Market

124

116

-6.5%

$1,129,622

$1,254,810

11.1%

94.3%

94.3%

0.0%

$1,554,359,594

$1,691,483,649

8.8%

Sold Listings (All Properties)

Average Price % Sold Price to List Price Total Dollar Volume Sold

All Properties

Due to the increased demand for real estate in the Vail Valley, four neighborhoods saw a dramatic decrease in average days on market of 30% or more: Bachelor Gulch (single family homes), Cordillera, Lionshead, and Wildridge/Wildwood. Bachelor Gulch revealed the highest decrease of 51.8% average days on market for single family homes, to just 134 days in 2018 – a very quick timeframe for single-family homes in the luxury market of the Vail Valley.

Other highlights for the Vail Valley include impressive increases in average price: 19.8% increase for the Town of Vail, 20.7% increase for Vail Village, 24.8% increase for East Vail, and a 28% increase for Arrowhead. To view the complete Micro Market Report for Vail Valley, visit ColoradoMarketReports.com.

Based on Information from Vail Board of Realtors®. This representation is based in whole or in part on data supplied by Vail Board of Realtors®. Vail Board of Realtors® does not guarantee nor is in any way responsible for its accuracy. Data maintained by Vail Board of Realtors® may not reflect all real estate activity in the market.

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