Colorado’s Economy: A Bright Spot in 2025 and Beyond

I recently attended a fascinating webinar hosted by Colorado Home Realty, featuring economist Elliot Eisenberg. The discussion offered a wealth of insights into the state of Colorado’s economy and its impact on the residential real estate market. In another post I will dig more into what I am seeing in the commercial real estate market. Here are some of the most compelling takeaways—and what they might mean for residential buyers, sellers, and investors in 2025.

Why Colorado Remains a Great Place to Be

Colorado continues to shine as a top destination for people seeking opportunity, lifestyle, and stability. Here’s why:

• Demand to Live Here Is High Colorado remains a magnet for people across the country. With a thriving outdoor culture, strong job market, and quality of life, it’s no surprise that demand remains robust.

• A Thriving Job Market Unemployment rates are low, and high-paying jobs in sectors like tech, healthcare, and finance are driving the economy forward.

• Housing Supply Challenges Despite high demand, the state is still underbuilt in residential housing. Increasing density, particularly near downtown Denver, could help alleviate some of the pressure, benefiting both the economy and the housing market.

  
  

Real Estate’s “New Normal”

Interest rates are unlikely to decline significantly in the near future. As buyers and sellers adjust to this reality, we’re seeing shifts in the market:

• Pent-Up Demand on the Move It’s estimated that around 30,000 people in Colorado are sitting on the sidelines, waiting to make a move. As they come to terms with the new normal, we expect to see increased activity in the market.

• A Stable Market Thanks to strong home equity, Colorado’s housing market isn’t heading for a crash. Most homeowners are in a positive equity position, creating stability.

• Opportunities in an Undersupplied Market With housing supply still lagging behind demand, there are significant opportunities for developers and investors to address this gap.

• Wealth Transfer The Baby Boomer generation is transferring significant wealth to heirs, fueling demand for real estate as a legacy investment. Homes and second homes are increasingly seen as sentimental assets, tied to family memories and traditions.

  
  

Key Challenges to Watch

While Colorado’s economy and housing market remain resilient, there are a few concerns worth keeping an eye on:

1. Record Credit Card Debt Although GDP and home equity are strong, renters may face financial strain due to rising debt levels. Landlords and rental property owners should watch for potential challenges in this segment of the market.

2. Immigration Policies Proposed changes to immigration could impact industries like construction, hospitality, and agriculture. These industries rely heavily on immigrant labor, and a decline could also affect the rental housing market, as immigrants make up a significant portion of renters.

   
   

Emerging Trends to Consider

Here are a few other trends shaping the market:

• Wildfire-Resistant Structures Rising insurance costs and wildfire risks are driving demand for fire-resistant building materials and designs. This trend could reshape construction standards in Colorado.

• Global Opportunities With a strong dollar, now may be an opportune time for those looking to invest in international real estate or travel abroad. The strong dollar is keeping international investors out.

  
  

What Does This Mean for You?

Colorado’s market is poised for resilience and opportunity, even in a changing economic climate. Whether you’re considering buying, selling, or investing, now is the time to evaluate your strategy and position yourself for success.