Study: More jobs, but too few rooms
Boulder, Denver, Springs on the list
In the economic recovery, Boulder County added more than three times as many jobs as housing units, driving a severe imbalance in supply that has pushed the average cost of a house to new and, some say, terrifying heights.
The county added 3.3 jobs for every unit of new housing from 2010 to 2015, according to a report Wednesday from Apartment List.
Many of America’s bustling metros are starved for homes, the report said, with the most undersupplied seeing the biggest increases in rents. Only 10 of the nation’s 50 largest metros have seen home construction keep pace with job growth since the Great Recession. Apartment List is an online market place for rent-
al units based in San Francisco.
“We are seeing a lot of big cities — San Francisco, Austin, Seattle — that are thought of as doing well, but that’s where you’re seeing (cities) not supplying enough housing,” said Chris Salviati, who wrote the report. “And that’s where you’re seeing these price increases.”
Denver was also housing-strapped, adding 2.9 new jobs for every new housing unit permitted from 2010 to 2015. During the same period, Colorado Springs added 1.5 jobs for every home built.
Of 463 studied metros, Boulder was the 26th most undersupplied. San Jose, Calif., was No. 1.
Apartment List’s analysis, which looked at building permit data from the U.S. Census Bureau and employment numbers from the Bureau of Labor Statistics, also took a longer view, the 10 years from 20052015. By that measure, cities were doing a better job of keeping up.
Boulder County added 18,368 jobs and issued building permits for 9,606 new housing units during that decade, 1.9 jobs for every unit. In Denver, 201,000 jobs were added, 1.5 for every housing unit. That’s in line with a more balanced market, Salviati said.
“When supply and demand are balanced, you would expect to see one to two new jobs per permit. When we see jobs per permit above that level, that’s indicative of a market that’s not supplying enough (housing).”
From 2010 to 2015, the local economy left home construction in the dust. As a result, home prices and rents rose quickly and to new heights. Boulder County rents increased nearly 30 percent in those five years, Apartment List found, not adjusted for inflation. Rents increased 52 percent in Denver.
That trend of mass appreciation is in line with history, at least in the city of Boulder. The city has consistently gone through four-year cycles of robust price growth since 1976, a study by Re/Max’s D.B. Wilson and Mike Malec found.
The current cycle, which began in roughly 2012, is running its course, Wilson said, indicated by slowing price gains. Appreciation from 2015-2016 was 14 percent. From 2016 to now, it’s about 5.9.
“We’re starting to see appreciation slow down (and) an increase in inventory,” he said. “I believe we’re going into a more balanced market.”