SmartAsset uncovered the fastest-growing cities in the U.S. To identify the top boomtowns in America in 2021, they looked at the most recently available data for 500 of the largest cities across the following seven metrics: population change, unemployment rate, change in unemployment rate, GDP growth rate, business growth, housing growth and change in household income. What 3 cities in Colorado made the cut? How is each city performing today? Is the current data pointing to a 1980’s rerun?
What was in the data on Colorado Boomtowns?
The U.S. recently hit a large milestone on the road to recovery from the economic fallout of COVID-19. In the second quarter of 2021, real gross domestic product (GDP) exceeded its pre-pandemic level, according to Bureau of Economic Analysis data. This rebound comes exactly a year after real GDP hit its lowest point during the COVID-19 crisis when it was down by more than 12%. National signs of growth are apparent at local levels. While some cities are still struggling with high unemployment rates and depressed economic growth, many are growing again. Here are the top-ranking Colorado cities:
- Longmont, CO
- Denver, CO
- Fort Collins, CO
Why are these three Colorado cities included as Boomtowns?
The analysis ranked 7 traits and weighted them. The biggest drivers were the unemployment rate, the GDP of a city, the 5 year population growth rate, etc… Each of the cities above have been desirable places to relocate to for both employers and employees over the last 5 years. Furthermore, Covid turbocharged these trends as mountain west states exploded with growth as the migration from larger more dense cities hit overdrive.
How is each city performing today?
There is the old saying in real estate that the three drivers of real estate are “location, location, location”. This adage could not be more true today. But, the cards have shifted though with prior winners like Denver lagging behind other smaller metros/suburban markets. The recent sales data shows the stark contrast with Denver falling almost 8% while Fort Collins holds steady, and Longmont comes off slightly.
| Median prices year to date | |||
| YTD April 22 | YTD April 23 | % change | |
| Longmont (Boulder county) | $ 875,500 | $ 850,000 | -2.90% |
| Ft. Collins (Larimer county) | $ 575,495 | $ 575,000 | 0% |
| Denver (Denver county) | $ 691,000 | $ 635,000 | -8.10% |
Where do values go from here for the 3 Colorado Boomtowns?
Is the current data above a blip or a long term trend? Based on the “normalization” of Covid, I see some long term structural shifts in real estate. There is a clear migration from the city cores to more suburban and smaller metro areas. Even with a return to office, I do not think it will ever return to pre covid as work from home will continue at least one or two days a week allowing employees more flexibility in where they work.
As seen from the data above, employees are choosing locations outside of Denver’s core due to lower price points, lower taxes, better schools, less crime, etc… These trends will continue and could accelerate as taxes continue rising, crime continues, and quality of life degrades.
Summary:
The million dollar question is always what happens in the future. When you invest in real estate, it is a long term asset that you hope will appreciate over time. The location is critical because you can’t cheaply move the house. As a result, many property buyers are flocking outside the city core. Based on the flexibility of work from home, we are seeing a bit of a rerun of the 1980s in many cities like Denver. Will this trend of migration out of Denver to smaller suburban markets stall where we are today or accelerate?
Many buyers are not rolling the dice and instead opting for more suburban/ smaller metros to hedge against changes in Denver. Do you think we will see a 1980’s rerun in Denver? If you are buying a house are you hedging your bets towards suburban/smaller metro areas?
Additional Reading/Resources:
https://smartasset.com/data-studies/top-boomtowns-in-america-2021
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Written by Glen Weinberg, Owner Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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