Most of the Rocky Mountain States ended 2000 with annual employment growth rates well below those from the start of the year. The sharpest decline was in South Dakota, where the rate fell to less than 1 percent after starting the year in the 2- to 3-percent range. Colorado’s annual growth rate of 2.3 percent as of December 2000 was well below the 4 percent earlier in the year. Unemployment rates in all States except Montana remain below the national average. Although Montana’s rate has consistently been the highest in the region, the 4.4 percent recorded in December was the lowest monthly rate reported since the present series began. Colorado, North Dakota, and South Dakota each reported a rate of less than 3 percent.

Home sales in the Rocky Mountain region in 2000 were very good. According to data from NAR, a total of 254,200 existing homes were sold in the region, a 6-percent increase compared with 1999. Sales in Colorado were up more than 9 percent over last year. The median sales price in the Denver area for 2000 was $196,800. Single-family permit activity totaled more than 58,700, down only 2 percent, as most States recorded small declines.

Multifamily building activity slowed in most States during 2000. However, Colorado finished the year with permits issued for a total of 16,050 units, a 51-percent increase over 1999 and beating the decade’s record set in 1998 of 15,049 units. During the second half of 2000 rental markets in the region tightened significantly. Rental vacancy rates in Denver and Colorado Springs as of the third quarter were down more than 1 percentage point from rates recorded in the second quarter. A survey done by the State of Colorado for other areas in the State also revealed generally tight markets. Renter vacancy rates were typically below 5 percent and dropped to under 1 percent in Eagle County and Aspen.

Colorado Springs’ robust economy continues to support a strong housing market. According to the Pikes Peak Regional Building Department, permits issued in 2000 reached a decade-high level for both single- and multifamily units. This surge in construction has not dampened demand for existing sales or rental units. Existing home sales in 2000 were up more than 4 percent for 2000, and the median sales price of $154,100 was 6 percent above last year’s level. The rental market remains tight. A cutback in apartment construction in 1998 and 1999, as well as the steady growth in new households migrating to the area, has kept pressure on the market. Hendricks & Partners reported a third quarter 2000 rental vacancy rate of 2.8 percent, down from the 4.1 percent recorded a year earlier. However, with 1,700 apartment units currently under construction, conditions should be more balanced by the second half of 2001.

Spotlight on Salt Lake City-Ogden, Utah

The Salt Lake City-Ogden metropolitan area’s economy has experienced a steady and relatively strong rate of growth during the past 3 years. The annual average wage and salary employment in the 12 months ending November 2000 was 2.4 percent above the level of a year earlier. The labor market remains tight; the unemployment rate in November 2000 was 2.9 percent compared with 2.7 percent a year earlier.

The outlook for 2001 is for continued moderate employment growth with a slowdown expected in 2002 following the completion of major construction projects for the 2002 Winter Olympics. Several large projects with extended construction schedules will not be finished until Fall 2001. By the end of 2001, the Governor’s office estimates that the total value of all construction related to the games will be close to $3 billion.

The strength of the area’s high-technology sector is expected to make any slowdown short term. A quick rebound is anticipated in 2003. There is potential for major expansions at high-technology firms, including Micron, Intel, and Gateway USA. Micron’s partially completed $2.5 billion manufacturing plant could begin production of computer chips by the end of 2001 or early 2002, adding hundreds of new workers. The first building of Intel’s huge research and development campus in Riverton was recently completed. Future expansions at the campus planned over a several-year period could add thousands of new jobs to the area. The Utah Office of Planning and Budget estimates that population grew at an annual rate of 1.7 percent since 1990 to 1,275,000 people as of July 1, 2000.

Residential building activity has followed the slower rate of economic growth. The number of single-family permits in 2000 was down 12 percent from last year’s level to 6,556 homes. New homes account for approximately 32 percent of the total home sales market. Many of the new single-family homes are located in southwest Salt Lake, north Davis, and south Weber Counties, where most of the available land is located. According to the New Construction Information Network, during the past year homes priced below $175,000 accounted for 50 percent of new homes produced. Move-up homes in the $175,000 to $280,000 price range were the second largest part of the market with 40 percent of new homes.

Existing home sales for 2000, according to the Salt Lake Association of REALTORS^® , are slightly ahead of last year’s sales. Although sales activity continues to increase, there has been an increase in the supply of listings. The average single-family sales price increased 3.2 percent in 2000 to $168,200. The market is strongest in the first-time buyer range between $100,000 and $160,000.

Multifamily building permit activity in the Salt Lake area has gradually declined each year since a decade-high level of 3,689 units in 1996. In the past 4 years activity has gone from 2,710 units in 1997 to 1,442 units in 2000. Much of the new construction has been in Class A developments in south Salt Lake County, as well as in more affordable developments with LIHTCs in west Salt Lake, north Davis, and south Weber Counties. Salt Lake County’s share of multifamily production since 1990 has held at 75 percent. The 684-unit Olympic Village was completed this year. The apartment development now houses nearly 2,500 students at the University of Utah. During the Olympics, the students will vacate for 3 weeks to make room for participating athletes.

The Salt Lake rental market continues to tighten. According to Hendricks & Partners, the vacancy rate as of the third quarter was 3.9 percent, down from 4.8 percent in 1999. Rents have begun to increase slightly after years of relative stability. The market has tightened largely because of the dramatic cutback in apartment construction during the past 3 years. The market is expected to remain unchanged through 2002. However, some short-term softening in the Spring and Summer of 2002 is expected as Olympics-related workers depart the area and additional units enter the market. The Salt Lake City downtown-university area, where much of the Olympics-related activity has occurred, will be the most affected.