Significant upward revisions in employment estimates for Colorado, North Dakota, and South Dakota pushed the region's annual growth rate above 3 percent. As of March 2000, Colorado led the region with a 3.9-percent increase from March 1999. South Dakota posted a 3-percent increase, while annual gains in Montana (2.6 percent) and Utah (2.5 percent) were not far behind. North Dakota's annual increase remained modest at 1.2 percent. Similarly, Wyoming posted a 1.6-percent annual increase. Unemployment rates remain low. South Dakota's rate as of March 2000 was 2.1 percent, tied for the lowest in the Nation. Colorado, North Dakota, and Utah all recorded rates below 3 percent. Montana's rate remains the highest in the region, but it has stayed below 5 percent since last Fall.

The Utah economy continues to expand but will face some fallout following the completion of major construction projects that are timed for the 2002 Winter Olympics. Construction activity associated with the Olympics has been a major factor in economic growth since 1997. Although most of the Olympic venues are complete (e.g., the hockey arena, the stadium, ski area expansions, the ice sheet, etc.), several large projects with extended construction schedules will be finished by next Fall. These include the Little America Grand Hotel, the Marriott Hotel, Olympic Village Apartments, and the reconstruction of Interstate 15. Local officials have expressed concern regarding construction employment and its impact on the local economy, with more than $2 billion in projects scheduled for completion over the next 2 years. The Utah Department of Workforce Services anticipates a loss in construction jobs in 2002 that will bring wage and salary employment growth down by 0.5 to 1 percent. Stimulated by a strong high- technology sector, a quick rebound is anticipated in 2003, and the employment growth rate will return to the pre-Olympics level of between 2.5 and 3 percent annually.

Higher interest rates have not significantly slowed the sales market in the Salt Lake City and Provo metropolitan areas in 2000. Existing sales activity was up 3 percent in both markets. Existing home sales in the Denver area were off in January, but a hot March pushed total activity for the first quarter of 2000 7 percent ahead of the first quarter of 1999.

A surge in apartment building activity in Colorado in the first 3 months of 2000 offset declines in most other States and fueled a 58-percent increase in multifamily building permit activity when compared with the first 3 months of 1999. Utah's multifamily sector was very active in the fourth quarter of 1999, but permits dropped off considerably in the first quarter of 2000.

Salt Lake City's rental market remained stable in the fourth quarter of 1999. The vacancy rate of 4.8 percent was slightly above the rate of 1 year earlier. The region's other major rental markets eased in the fourth quarter of 1999. Denver recorded a vacancy rate of 5.2 percent, up from 4.4 percent in the fourth quarter of 1998. In Colorado Springs, the rate of 5 percent was down from 1 year ago.

Spotlight on Fort Collins-Loveland, Colorado

The Fort Collins-Loveland metropolitan area is a regional retail and service center for northern Colorado and southern Wyoming. It is also home to high-technology employers such as Hewlett-Packard, Celestica, and LSI Logic. Colorado State University (CSU) is one of the largest employers in the area, and its 23,000 students have a significant influence on the local economy and the rental market. CSU enrollment has increased steadily over the past 5 years, and gains of 1.5 to 2 percent annually are expected to continue.

The economy continues to expand, but growth rates are slowing. The rate of employment growth jumped to more than 6 percent in 1996, the strongest gain of the 1990s. Growth slowed to 3.2 percent in 1997, but was up to 4.8 percent in 1998, and will finish 1999 with a gain of 2.5 to 3 percent. Employment growth should remain above the State average. The labor market remains tight; the unemployment rate has stayed below 4 percent since 1994 and was close to 3 percent for the past 12 months.

The estimated population for the metropolitan area currently is 239,500 persons. Growth was greatest in the first half of the 1990s. A big increase in employment opportunities pushed in-migration to a record level in 1994, accounting for more than three-fourths of the population gain that year. In 1995, in-migration eased and the population growth rate dropped below 3 percent. Despite this slowing, population growth remains strong in the area and in-migration will continue to exert a significant influence on the housing market.

Residential building activity has paralleled the economic growth in the area. Single-family permit activity from 1990 through 1992 averaged 1,340 units annually. With the big increase in employment beginning in 1993, single-family activity since then has averaged more than 2,400 units annually. During the same period, multifamily activity averaged approximately 650 units annually, compared with 230 units annually earlier in the decade.

Home sales in the Fort Collins-Loveland area totaled more than 5,600 homes in 1998 and stayed at this level in 1999. The average sales price in the area was up 10 percent in 1999, the first time the annual price increase had been in double digits since 1994. Loveland began the decade as a more affordable home market compared with Fort Collins. However, by 1999 the average sales price was just over $175,000 in both communities. The average in both areas has been pushed up by an increase in sales of homes priced above $700,000.

The rental housing market has been tight through most of the 1990s and remains so today. A major increase in rental production in 1997 brought a temporary easing of the rental market, but occupancy remains high at most major developments. There are 800 rental units under construction, and this total could soon increase to more than 1,000 units. The market is expected to become much more competitive and should be carefully monitored. The current market for LIHTC units is strong, but this inventory is expected to double within the next 18 to 24 months.