We argued in an August post that the collapse of new construction during the recession. and its failure to recover to pre-recession levels, has been a major contributor to the supply/demand imbalance that is pushing prices up in the Boulder/Denver markets.
This morning, an article in the Denver Post argues that new construction over the past 3 years has provided housing for only about 25% of the new jobs created in the metro Denver area. Where nearly 146,000 new jobs would typically require about 91,000 new housing units, only a bit over 24,000 have been built.
So rather than alleviating the supply demand imbalance that’s driving this market, the rate of new construction is making it worse. The article makes mention of the near absence of condo construction, claiming that condo construction has dropped from about 25% of new construction to about 1.5%. We discussed this in an earlier post.
It looks to be a tough market for buyers in the area for some time to come.