Strong and on the Rise
If you keep up at all with national news, you’ve probably seen at least one story about the popularity and economic strength of Colorado Springs and the Centennial State at large.
In 2018, U.S. News & World Report lauded Colorado Springs as the most desirable American city and the second best U.S. city in which to live. In the same study, the Springs rated higher than any other city in terms of quality of life and also ranked high for affordability and job opportunities.
“The fact is, as a result of unprecedented levels of public and private investment, Colorado Springs has taken its place among the great cities of America,” said Colorado Springs Mayor John Suthers in his 2018 State of the City address.
For decades, Colorado Springs has been considered a top tourist destination for its natural beauty and countless attractions at the foot of Pikes Peak. But in recent years, Colorado Springs has also become known nationwide for the strength and appeal of its economy. In that time, the city and state have experienced strong, sustained job growth and a hot housing market that have resulted in a local population boom. With an estimated population of 700,000, Colorado Springs is the second largest metro area in the state; and it is projected to surpass an already built-out Denver as the state’s largest city by 2050. (It is worth noting that the Denver metropolitan area will undoubtedly remain larger.)
“One thing—which is a good problem to have—is that we’re growing so rapidly,” says Tatiana Bailey, director of the University of Colorado Colorado Springs (UCCS) Economic Forum. “I think the challenge is figuring out how to do that in a sustainable, equitable and progressive way. I feel like we’re definitely heading in the right direction.”
Part of the challenge comes down to employment. It’s not a simple task to sustain the job growth needed to support population growth, but the experts say Colorado Springs is keeping good pace.
Suthers says that from June 2015 to September 2018, Colorado Springs added an estimated 24,000 jobs. That’s an average of 7,300 per year, which exceeds the estimated 5,500 new jobs needed annually to support that growth. The median salary in Colorado Springs has also swelled to $77,000. Both of these metrics exceed corresponding national numbers.
“That’s a great indicator,” says Dirk Draper, president and CEO of the Colorado Springs Chamber of Commerce & Economic Development Corporation. “The part that I find encouraging about the groove we’re in right now is that it’s not one single industry or sector; it really is across the entire local economy.”
In years past, the Colorado Springs economy was perhaps overly dependent on the military industrial complex—due to the presence of five major installations—but it has recently seen significant diversification with the healthcare, professional and technical assistance, construction and hospitality industries leading growth.
“We do have a large military presence, and that is a huge asset, but we don’t want to be too reliant on any one sector,” Bailey says. “Our economy is in a much better position now … because of the growth we’ve seen across so many different sectors. We have people and their families moving here who are well-educated and well-skilled, who are both good workers and entrepreneurs.”
In 2018, the number of jobs locally grew 3.9 percent, surpassing national growth. And as the city’s reputation as a tech- and small business-friendly community grows, this is a trend that both Draper and Bailey anticipate to continue, despite a slight national slowdown.
“We’re seeing a little bit of a slowdown nationally in job growth,” Bailey says. “But the metrics are still really good. My hope is that the job growth continues and helps to keep the economy churning. … I’m quite confident that we’ll continue to see that.”
According to the Economic Forum’s annual report, the city’s gross metropolitan product (GMP) will also continue to outpace the national GDP by around 1 percent. Colorado Springs was among the top 25 percent in the nation last year in GMP growth at 3.7 percent and is projected to see 3.5 percent in 2019. Consumer sentiment in the Springs was 9 percent above national numbers.
To continue the economic growth of the past few years, Bailey says the community must face a challenge that is being seen throughout cities nationwide: a significant and growing skills gap.
“It will continue to be challenging to find workers with the skills we need,” says Bailey, adding that the largest shortfall is represented in STEM (science, technology, engineering and math) industries.
The local STEM industry cluster is growing, however. It currently accounts for 3,000 jobs and is expected to reach 7,000 over the next five years, due in part to Colorado Springs’ appeal to STEM workers seeking employment in a beautiful Front Range city.
Draper says the city isn’t only attracting a workforce; it’s attracting companies to employ them. He says the community continues to see interest from businesses looking to relocate to or expand operations in Colorado Springs.
“We have not seen a slowdown in interest for relocation and expansion,” Draper says. “We still have a really solid pipeline.”
The growth of the city’s economy and population also serve to bolster an already-healthy local real estate market.
“The real-estate market also remains among the best in the country,” according to Suthers in his 2018 address. “Demand is high, new construction is at record levels, and homes are appreciating at a healthy rate. Yet we remain among the most affordable of the most desirable places to live in America.”
Since the beginning of 2019, a series of reports from local, state and national agencies have highlighted both the current strength of the Springs real estate market, as well as its potential to continue a healthy trend.
Last year was one of the best on record for local sellers, though challenging for buyers. Due to elevated demand and extremely tight inventory, the median sales price in 2018 rose to nearly $308,000, and bidding wars were common, especially in the sub-$350,000 price range. There were 15,576 single-family homes sold in 2018, the second-highest total recorded by the Pikes Peak Association of Realtors. The highest was 2017 with 16,337.
Bailey says that growth in the housing market, in terms of prices and saturation, should continue a healthy trajectory through 2019, but will slow compared to last year. Along with a dip in interest rates, this proves spiriting news for buyers entering the market, but also continues to bode well for sellers.
Due to these positive trends, Colorado Springs is currently in the middle of a tremendous amount of public and private investment. Among the construction projects currently underway in downtown Colorado Springs are the U.S. Olympic Museum and Hall of Fame, a new stadium and sports center, a number of apartment buildings and hotels, and the repurposing of buildings to house top-rate restaurants.
“If the core [of a city] is aesthetically pleasing and has great assets, you will leave the city thinking, ‘Hey, that was really cool,’” Bailey says. “So I think [these projects] are actually quite transformational.”
