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Page 2 — Multifamily Properties Quarterly — November 2016
Letter from the Editor
“A nyone who can’t get mil-
lennials into your commu-
nity is in big trouble,”
Tom Clark with Metro
Denver EDC told the audi-
ence at the CREJ multifamily confer-
ence in October.
Millennials make up 24 percent
of metro Denver’s population, 32.5
percent of the 2 million jobs in the city,
and represented nearly 52 percent of
the in-migration to the metro area in
2014, according to a
report fromMetro
Denver EDC.
With this influx
of skilled workers,
you’d imagine the
job market is thriv-
ing. However, Clark
shared one concern-
ing statistic from the
past year. In 2015,
Colorado was the fifth fastest-growing
state for nonfarm job ’ve
fallen to No. 11 through the first half
of 2016.
Clark took time during his keynote
presentation to link job growth to
affordable and attainable housing. He
told the audience that opportunities
for business recruitment will struggle
until we get a handle on home prices,
and used Boulder as an example,
which saw its median home prices
exceed $500,000.
When compared with our competi-
tors, Denver has the highest median
home price and has seen the fastest
price increases, followed by Portland,
Oregon, Austin,Texas, and Salt Lake
City. Phoenix, Dallas and Atlanta –
other competitive cities to Denver – all
fall below the U.S. median home price.
Escalating costs make is challenging
for first-time homebuyers to enter the
market. I believe it is a common mis-
conception that, as a whole, the mil-
lennial population is uninterested in
buying homes. Far more would, could
they afford it.
However, it also is true that this
generation is doing things later in
life – getting married, buying a home,
starting a family – which is good
news for the rental market. And with
birth years ranging from 1981 to 1997,
there’s a whole wave of this generation
just entering early adulthood and the
rental market, promising a relatively
long run of demand.
For all these reason, the multifamily
business is booming. In 2016, multi-
family projects represents 54 percent
of new construction.The 30-year aver-
age for multifamily construction is
28 percent, according to Clark. Inside
this issue, experts dive further into the
debate surrounding the multifamily
construction pipeline in the face of all
these changing demographics.
Many in the industry already know
these generalizations and know that
the lack of condominium development
is only exacerbating the issue. In a
healthy market, 22 percent of the mar-
ket should be for-sale condos. In 2015,
187 condos were built. Not only is this
number extremely low, but also all of
these new condos were over $400,000.
In a healthy market, condo develop-
ment can be used as a stepping stone
to homeownership. At this price point,
it’s out of many people’s reach.
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