Real estate has historically provided the most reliable means for generating wealth and passing it down to subsequent generations. Despite structural changes in the modern economy, real estate remains a very important part of a diversified investment portfolio but with one proviso: the real estate must be where the jobs of the 21st century are. Colorado is such a place.
Prof. Enrico Moretti of the University of California Berkley identified in his book “The New Geography of Jobs” the key factors driving the current and future economy.1 The 21st century disproportionately rewards industries that employ highly educated, creative workers in fields focused on innovation. A highly educated workforce has a great deal of freedom to choose where it wishes to live and work. Colorado has and will continue to benefit from this dynamic like few other places in the world.2
Colorado lies in the Rocky Mountains and has an abundance of natural allure. Colorado has 58 mountains over 14,000 ft tall (4,267 meters), numerous ski resorts, including some of the most famous in the world like Aspen, Vail, and Steamboat Springs, and over 13 million acres of national forest to explore. Combine that with an abundance of sunshine and Colorado provides a heavenly place to live. Highly-educated workers have noticed. Colorado has the second highest per capita rate of people in the United States with a bachelor’s degree.3 As a result, the Colorado economy is incredibly strong and has an exceedingly low unemployment rate.4
People move to where they can find the right combination of job opportunities and quality of life. Consequently, the population of Colorado is predicted to grow from 5.7 million people as of 2018 to 7.8 million by 2040.5 Continued population growth is a key ingredient in property appreciation.
Colorado is caught up in the virtuous cycle identified by Prof. Moretti in that economically competitive locations attract highly educated workers, highly educated workers in turn create more good jobs in a given industry (scale) and other fields (e.g., services), good jobs attract more highly educated workers and the cycle continues. This has led to three of the top twenty tech hubs in the United States being located in Colorado.6 Colorado’s real estate market should continue to benefit from this dynamic and provide a great real estate investing opportunity for those investors scouring the world for the real estate markets that will benefit from the dynamics powering the 21st century economy.