A rebounding real estate market, new home construction and increased auto sales seem to be leading Colorado Springs in an economic recovery, according to a Quarterly Updates and Estimates report from the Southern Colorado Economic Forum.
The economy has been slowly growing since 2011, according to the report. The Business Conditions Index stands at 111.72, up 4.6 percent from March 2012.
Colorado Springs sales tax collections were up 8.5 percent year-over-year. Two of the biggest improvements were new home construction and vehicle sales. Single-family construction permits were up 43.1 percent year-over-year and new vehicle registrations were up 40 percent, according to the report.
Employment and sentiment figures were also improving.
The new home construction has been spurred, in part, by a lack of inventory and rising home prices in the resale market.
As of April 2013, there were 451 — 13.3 percent — fewer homes listed for sale than there were in April 2012.
“This is part of a consistent trend for over a year,” according to the report. “The decrease in supply of homes for sale coupled with an increase in sales of homes suggests equilibrium is returning to the local housing market. As expected, this was accompanied by an increase in the average price of homes sold.”
The median price of a home sold in April was $209,700, 11.6 percent higher than a year ago. It also follows a 13.4 percent increase for 2012.
At the same time those economic indicators are on the rise, the unemployment rate is falling.
The seasonally adjusted unemployment rate for March was 8.08 percent.
“This is a sharp departure from the 9+ percent unemployment rate plateau that has marked most of the local labor market since May 2009,” the report reads. “The lackluster employment growth has been a continuing drag on the local economy.”
While the employment rate has improved, it’s still well below its 2007 peak. Employment in March 2013 was 17,222 lower than the peak employment level of 290,544 in September 2007.
That means several people have left the labor market and are no longer looking for work, according to the report.
In addition to slow job growth, wages have suffered.
“Revised department of labor figures show that real wages in 2012 declined approximately 4.5 percent,” The report reads. “Preliminary estimates for the first quarter indicate real wages are continuing to decline.”