Shift in demographics crucial to real estate future
A growing retirement-age population in Garfield County and across the Western Slope will be an important economic and real estate market driver in the coming years.
Retiring baby boomers “tend to hang out in one place and spend money … and will maybe even continue working” in some capacity, Colorado State Demographer Elizabeth Garner pointed out during a presentation at the Mountain Real Estate Summit Friday in Snowmass Village.
“And they don’t boom and bust like oil and gas,” she said.
At the same time, the region must find ways to attract and keep the younger demographic that will fill the jobs necessary to meet the demands of an aging population, Garner said.
But some West Slope counties will need to overcome challenges in order to do that.
From low wages, higher unemployment rates and under-employment among younger workers, and the high cost of housing especially in places like the Roaring Fork Valley, it’s difficult to compete for the “best and brightest” in that demographic, she said.
“These factors will have long-term, permanent impacts on earning, and can have a serious impact on the economy” Garner said.
Low wages and high housing costs “impact what people can buy, spend and create,” she said.
In Garfield County, according to the State Demographer’s Office figures for 2013, more than half of the households spend greater than 30 percent of their income on housing — an indication that wages and housing costs are out of whack.
“Housing affordability and availability is one of challenges we face, but it’s something I know everyone can rise up and address,” Garner said before the gathering of mostly commercial real estate professionals from the region.
“We need to be looking at creative solutions to address these challenges we have today,” she said.
The Post Independent addressed many of those same challenges in its recent series, “The Price of Paradise.”
The week-long series of stories about the cost of living in the Valley earned a shout out from Glenwood Realtor Scott Dillard of the Fleisher Company, who moderated the “Economic Drivers for Development” panel discussion during Friday’s summit.
Dillard said the fact that many young people are choosing to live in a certain place because of the location rather than based on whether they have a job right away is something the real estate industry needs to be aware of and react to.
The summit was sponsored by the Rocky Mountain Commercial Brokers in partnership with the University of Denver’s Burns School of Real Estate and Construction Management and Daniels College of Business.
Real estate is in a growth phase throughout Colorado, and that growth can expected to continue for a few more years before peaking in 2019, predicted Glenn Mueller, a real estate investment strategist at DU.
One challenge for the real estate development industry to try to address some of the aforementioned issues is that debt financing is still hard to find, he said.
Mueller also noted that the average age for first-time home buyers in the U.S. has risen back to 36 in recent years, after dropping to 32 during the mid-2000s when sub-prime loans were readily available.
Creating housing that appeals to the younger set could also bring changes to the real estate market, Garner said during her presentation.
“The household type and size is tighter,” she said, pointing to statistics that suggest younger buyers want smaller houses.
At the same time, boomers who have provided a strong market for second homes are also downsizing. And, there are fewer people in the 45-65 age group to replace them in that market, Garner also observed.
“Attracting that young population is going to be critical to survival for some of these [West Slope] counties,” she said.
Another factor to help accomplish that is to increase broadband capabilities in some of the rural, mountain areas, she added.
On the commercial side of things, Steve Beckley, owner and founder of the Glenwood Caverns Adventure Park and the new Iron Mountain Hot Springs, called the local market “bullish” and said now is the time to buy real estate in Glenwood Springs.
“Glenwood Springs right now is on the cusp of becoming a really great place to be,” Beckley, speaking on the Economic Drivers for Development panel, said.
“There will be a hiccup over the next couple of years with the bridge being built,” he said in reference to the impending replacement of the Highway 82/Grand Avenue Bridge over the Colorado River connecting Interstate 70 to the Roaring Fork Valley.
“I would buy as much real estate in Glenwood as you could, because after that things are going to happen,” he said.
Also speaking on that panel to the current state of oil and gas pricing and its impact on the Western Slope economy was Patrick Fitzgerald with DU’s business school.
While much of the focus for energy companies has shifted to the “more lucrative” oil market and drilling in Weld County and elsewhere along the Front Range, natural gas and Garfield County’s Piceance Basin will cycle back into the equation eventually, Fitzgerald said.
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Rifle’s CMC campus is closed today for a water main break.