Front Range Business Expansion is good news for homeowners, investors
Front Range business expansions will increase the demand for housing here. We already have low unemployment in Colorado. At 3% unemployment, that means the only states in the nation that are lower than us are South Dakota (2.8%) and New Hampshire (2.6%). With income, comes qualification to buy. With more job opportunities we can expect employees to have more options regarding their job choice, hours and pay. More people will move here to take jobs being created and this will increase the number of buyers that are looking for real estate to buy for themselves or for investment/rental potential. You’ve heard me say it before and I’ll keep saying it. Supply and Demand. That is the key to understanding why I believe the upward trend in our real estate prices is not a bubble and that the home prices we see today are not going to deflate, leaving someone holding the baby.
Our thriving economy, enticing tax breaks, physically healthy worker pool (Colorado is the 8th healthiest state in the country) and attractive quality of life, are but a few of the reasons that companies are choosing to expand existing or build new facilities and businesses in Colorado.
Front Range Business Expansion – Who is coming and when?
Google broke ground in Boulder in 2015, with Phase I of their new campus expected to be completed in about 18 months. When the entire project is complete, Google expects their buildings at 29th and Pearl St to be home to up to 1500 employees. Currently their Pearl and 26th St operations are home to about 340 employees. Yes, this will impact real estate pricing in Boulder. But don’t take my word for it, check out the impact that Google had on Mountain View, CA.
In Louisville, the aerospace firm Sierra Nevada Corp has just leased an additional 100,000+ square feet to increase its work space and its ability to make up to 400 new hires in the next 18 months. It currently employs 443 people in this area, so this is doubling their work force! This is all to do with the Dream Chaser CRS2 mission with NASA, so I’d go out on a limb to say the employees are not going to be low income earners and the Louisville-Boulder market could see some impact from this just as much as Erie, Lafayette, Superior or Broomfield.
Longmont… Not to be outdone in any way, has its own plans to create employment. Out east of the city on Highway 119/Ken Pratt Boulevard, at County Line Rd, development is underway. The University of Colorado Hospital (to be called Long’s Peak Hospital) is expected to open in mid 2017. At a cost of $100 Million and The hospital is set to be open by late 2016 or early 2017 and features 50 to 75 inpatient beds, an intensive care unit, operating rooms and an emergency department. There will also be advanced cardiology services and a birth center in the 190,000 square foot facility. With about 250 staff at an average of 120% of the local median income, this can only be good news for the real estate market too.
At the time the announcement was made for this new hospital, it was widely expected that it would also attract other businesses to that area. And it did.
Smuckers now has plans to build a peanut butter and jelly sandwich making facility on land that is both Weld and Boulder County, in the same area as the hospital! Phase one will cost about $200 million and expects to employ 250 people permanently. Phase two, at a cost of $140 million, is expected to add another 250 full time jobs. There are indirect impacts to Longmont as well that include $3 million in construction-related materials and 650 construction jobs.
You KNOW where I’m going with this!
If you are on the fence about BUYING… get off the fence. Prices are not going to go down and neither are interest rates. Ok, so you are not sure if Longmont, Louisville, Boulder or surrounding areas are going to be for you, long term. Such is life! Change happens. I get it. But right now you have a choice. Buy into a market that is looking decidedly healthy for the foreseeable future and sell or rent it when your plans change, or sit tight and watch your rent go up as you pay your landlord’s mortgage.
Investors: Same advice. When is the best time to plant a tree? 20 years ago. When is the second best time? NOW. We (yes, I invest too) look at the market right now and think… it’s kinda high. I will wait and see what Trump does to tank the economy and then invest. Might be a good plan… might not. The man is a wild card and besides that, this area is HEALTHY so in a down economy, we may not be as impacted as you think. Look at how the Front Range did in the last recession – we didn’t suffer in the same way other parts of the country did, or continue to do. In the meantime, interest rates will go up. The clock is ticking.
Thinking about selling? There are a thousand good reasons for selling and you have yours. Maybe it’s time to downsize or upsize? A change to something more low maintenance or … high maintenance. I’m working with several people right now who have their sights set on moving from a small lot to something with more acreage and privacy, the ability to build a giant workshop or create a garden and become more off-the-grid. You are in a seller’s market and will get top dollar for the existing house. Take that equity and use it (with still low interest rates) to make that dream home yours, before all those Sierra Nevada, Smuckers, Google employees and health care workers get the same idea!
I am EXCITED that our area is attractive to others. Sure, there are down sides to sharing our space, roads and everything else with increased population. But there are plenty of upsides too. A vibrant community that is open to new ideas, people and businesses, one that embraces change and growth, is better positioned to rides the ups and downs of a normal economy. As you approach or plan for retirement you’ll be happy with the investment you made here too. A rising tide lifts all boats!
Call me. Ask me questions… Tell me your thoughts…
Let’s discuss how I can help you get where you want to be.