I read a great article at the Colorado Real Estate Journal last week written by David Potarf, Executive Vice President of CBRE Capital Markets. He cited several reasons why he believes our real estate market still has many good years left in our boom—
- Housing formation is running about 26k units a year and we are only building about 24k new housing units.
- Over 2 million square feet of office space has been recently leased but is not occupied yet. And companies don’t lease more space to store junk. They lease more space as they will soon be hiring more employees. This amount of new leased office space tells me that companies will soon be hiring approximately 15k new employees. But, where will these new employees come from when our unemployment rate is below 3%? Other cities and states will have to fulfill this demand, which then causes more people to move here and this increases demand for residential housing.
- The youngest Millennials are in their early 20s and just starting to reach prime renting ages.
- And the next generation is nearly as large as Millennials as there are more 12-year-olds than 28-year-olds currently nationally.
- Denver has more Gen Z’ers than we do X’ers and all these young people need housing.