What’s Working: Cooling Colorado Springs’ job economy’s top concern? Affordable housing 

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Bill Craighead, an economist, understands that economists think differently than most consumers.

“My interpretation of the economy as an economist is probably much more positive than public opinion,” said Craighead, sharing what he planned to say before taking the stage to host this year’s UCCS Economic Forum, held Thursday afternoon. Inflation, he said, “is clearly past tense. This happened in 2021 and 2022. But it’s lingering in people’s minds.”

But he’s also a consumer and spends money in Colorado Springs, where he lives and works as the program director of the forum, housed at the University of Colorado Colorado Springs. He’s felt the impact of iNFLation on his own household (“We did get a shockingly high estimate on the fall leaf cleanup for our yard, so I ended up doing it myself, even though I hate yard work,” he said). But his job is to interpret the data to help guide Businesses and local leaders. He has to find the right sensitivity for sharing his findings because, well, they’re not always great.

So, on Thursday at the Economic Forum, Craighead began with some positive observations before ending on a more cautionary outlook. Wages aren’t rising as fast as they had in 2021 and 2022. The so-called misery index, which combines the inflation and unemployment rates, was at 6.7 in August, much lower than the nation’s 76-year average of 9.2.

“I keep hearing people say they think the economy is lousy,” he said at Thursday’s forum. “Not that we don’t have some real problems and challenges (but) I was a faculty member teaching macroeconomics in 2008, 2009 and 2010. I know what the data looks like when the economy’s terrible and this isn’t it.”

The U.S. Bureau of Labor Statistics doesn’t track price changes in Colorado Springs (it only does Denver). So he hunts down as much local data as possible for clues on how the city’s economy is really performing.

The monthly number of job openings in the Pikes Peak region has been nearly cut in half since the labor shortage three years ago, according to Lightcast, a private job-listing aggregator he uses to better understand whether local employers are hiring. In June, Lightcast estimated the area had 22,307 job openings, a count that is now below pre-pandemic levels.There is, however, still “significant demand” for lower-wage occupations in retail, fast food and counter workers.

Meanwhile, local employers report that payrolls are growing — in June, it was 9.6% higher than before the pandemic. But the rate of growth in the first half of 2024 was much lower than Colorado and the nation. Job growth has slowed. In July, Pikes Peak unemployment also rose to 3.9%, a tenth of a percentage point higher than the state’s own rate and two-tenths lower than the U.S., according to the UCCS update.

“These other indicators definitely say it’s gotten a lot tougher to find a job. There’s a lot less hiring,” Craighead said. “It is something I’m pretty concerned about because when you look at what happens in economic downturns, the reason unemployment goes up is mainly because hiring dries up, not because of huge numbers of layoffs.”

Unlike most cities in America, though, Colorado Springs has a cushion that isn’t always evident in job data. Its non-civilian workforce numbers about 38,320, according to last year’s Census data. Add that to the city’s civilian workforce of around 330,000 people, military workers are about 10% of the region’s workforce.

“By this measure, local employment has continued to grow, but it’s been growing at a much slower rate and we definitely see some signs of a softening in the labor market,” he said. “

Housing affordability tops Colorado Springs’s challenges

Housing data from the Pikes Peak Association of Realtors median single-family home prices slightly lower than the peak in June 2022, at $490,000. Back in June 2019 before the pandemic, the price was $328,000.

Prices haven’t fallen, according to the latest PPAR report with August numbers at $500,000, up 4.2% in a year. The higher prices are also keeping housing on the market long, with homes staying on the market for 36 days before a sale. Five years ago, it was taking 23 days.

“Housing affordability is still, by far, the number one issue for the economy of the region,” he said. “And it’s still, I think, the number one negative about the U.S. economy nationwide because many markets are in a similar situation to us.”

The recent Federal Reserve rate had been expected, though mortgage rates went up after the cut. On Friday, the 30-year fixed rate for a mortgage was 6.20%, lower than the 8% last October, but higher than the 6.15% the day rates were cut, according to Mortgage News Daily.

Patrick Muldoon, president of real estate firm Muldoon Associates, with offices in Colorado Springs and Pueblo, agreed. Wages aren’t rising enough to keep up with higher home prices, which are still near their all-time high. He recommends renting to folks who are uncomfortable with the high cost of buying a home. While lower interest rates do typically help, even the recent Federal Reserve cut doesn’t change his mind.

“I keep telling people that if this were an interest rate problem, then new home builds would be flying off the shelf. Why? New home builds are offering 4.9, 3.9% fixed 30-year rate notes. Most of them are offering to buy down so you can get a 1.9” that will increase to 4.9, Muldoon said. “New home builders are hitting us up every day to let us know about these ‘unbelievable rates.’ … And they, too, are struggling to get properties moved.”

He’s doing something a little unusual for someone in the business of selling houses. He’s pushing rents. According to ApartmentList local rent data cited in the UCCS report, the average 2-bedroom apartment rents have fallen 7.2% in two years, to $1,415 a month, which makes it more attractive to rent than purchase.

“I’ve told most of my buyers, honestly, look, nothing is pointing to a better real estate market next year. We have no data to support that,” Muldoon said. “If it’s a struggle or you’re uncomfortable — rent. There’s no downside to rent right now. You’re going to save money.”