If you receive the monthly newsletter from our team, you probably saw the article in the February newsletter about Colorado’s (massive) population growth. You may even be shocked at just how much our wonderful state is growing! According to the US Census Bureau data released in December, over 100,000 people moved to Colorado between July 2014 and July 2015. 100,000– that’s like having another Westminster or Arvada added to the state.

Of course natural population increase (more births than deaths) accounts for a portion of the population increase in Colorado, but surprisingly it accounts for roughly only one-third of it. Since 2010, Colorado’s population has increased by 408,000; ranking 7th in the nation for total population change. Out of the 100,000 estimated people added to Colorado’s population, 32,000 were represented by natural population and the other 68,000 came from net migration (more people moving into the state than leaving).

Colorado natives are starting to get fed up with more people moving to the lovely state, but can you blame them? Maybe you could blame it on the yearly 300 days of sunshine, 28 ski resorts, 58 fourteeners, 4 national parks, 30 craft breweries and 7 mountain ranges. But, I don’t know, seems a little pretentious if you ask me. There is a lot more to Colorado than simply the “out-doorsy” lifestyle the state exudes to the rest of the country.

Many out-of-staters migrate to Colorado for the wonderful amenities, but it has also been because of our low unemployment, and as much as I hate to admit it, the legalization of marijuana. In November of 2015, the unemployment rate for the U.S. was at 5% and Colorado was even lower than that at 3.6%. In a short span of three months, from April to June of 2015, over 12,800 jobs were added to Colorado. Hopes for a better career entice many to come to Colorado.

Some non-native Coloradoans have migrated here came for one thing; the legalized marijuana. Commercial brokers and marijuana enthusiasts point to marijuana being one of the biggest reasons for population increase throughout the state. Arguably, it could be a coincidence, but none the less having the state legalize marijuana has probably brought in some intrigued pot smokers. Even during the summer, 49% of visitors make their decision to come to Colorado because of the marijuana industry.

So why is population increase so important? More specifically, how does the increase in population affect real estate? Quick answer: supply and demand.
Increased housing costs are an affect of population growth because of the competition that is faced with more people coming to the state. We are also facing incredibly low levels of inventory. Do I sound like a broken record yet? We are beginning to recover from the recession when new construction development was at a stand still, but we are still not where we need to be. The lack of inventory, specifically affordable entry-level housing, has created a competitive market with low supply and high demand. This means an increase in prices. It’s a full circle when thinking about it in terms of population, more people are coming to Colorado with not as many people leaving nor new developments being built; more people for less houses. There’s not much more to it than the simply law of supply and demand, and yet it is a very complex situation that cannot be solved with a magic bullet. At the state and local levels affordable housing groups are actively pursuing needed policy changes and legislative action to address the challenges facing population growth and low inventory rates. If you’re interested in seeing with your local city is doing to help with the issue, click here.