Monday, December 17, 2012

Household formation by county in Colorado

Household formation over time 

An article on DS News today pointed to recent data showing that as household formation increases in the United States, rental housing is likely to get the biggest boost from the new demand. “Nearly all newly forming households in the past five years have been renters,” said economist Paul Diggle. 

While purchase homes are in demand here in Colorado, rental housing is certainly seeing a surge in demand with rent growth in metro Denver and northern Colorado hitting 12-year highs. See the rental housing data archive more more. 

Below I have looked at household fomation over time and have included a county-by-county analysis. 

The first graph shows the number of new households formed in each year. This is household data from the State Demographer's office.

The late eighties were a time of slow growth, and the nineties were a time of robust growth. Household formation was slow following the dot-com bust, but has reached moderately high levels since 2006. 

This is the first time I've spent some serious time looking at the recently-released household data for 2011. I had used a very conservative estimate of 20,000 new households for 2011 before the new data became available, and it looks like that estimate was a little low. According to the Demographer's data, there were  25,182 new households for during 2011 for a total of 1.9 million households in Colorado. 

Given current economic conditions, it is a bit surprising that household formation would be so solid in the face of lackluster job growth, but household formation does appear to be holding up. 


given that local economic conditions tend to match the nation overall, and in some cases are better than the nation overall, household formation in Colorado is likely to accelerate a bit in the coming years as young households continue to recover a bit from the unpleasant years following the financial crisis. 

The second graph shows new building permits for housing compared to new households formed. I have revised this graph to reflect the new 2011 estimates. New permits continue to come in below the number of new households formed. For 2011, there were 15,000 fewer new units built than there were new households formed. From 2007 to 2009, new households formed remained rather steady, but new building permits fell off 75 percent. 

I have provided estimates for 2012, which is not yet over, but based on this year's performance so far, permits will still not have increased enough to 2012 to match the number of new households formed. Assuming a conservative household formation number of 25,000 for 2012, there looks to be more than 10,000 more new households than new housing units during 2012. 

The third graph compared the number of new households and new housing units back to 1998. From 2002 to 2005, there were more housing units than there were new households. Since 2007, the situation has been reversed with more new households formed than there have been new units built. 

Indeed, 2012 will be the sixth year in a row during which fewer new units were built than there were new households formed. 



In total, from 2002 to 2005, there were 72,100 more units built than households formed. Since 2007, there have been 100,600 more households formed than units built. 

Household Formation by County 

Not surprisingly, household formation varies widely from county to county in Colorado. The map shows which counties have seen the most growth in household formation from 2008-2011. The idea here is to get a sense of house household formation has looked in each county since the 2008-2009 recession. 



The counties are broken out into four quartiles. The highest quartile has the most growth in household formation.  Brown= highest quartile. Green= Second highest. Orange= Second lowest. Yellow= Lowest quartile. 

Statewide, new households increased 4.8 percent from 2008 to 2011, rising from 1.76 million to 1.85 million households . Compare each county:





County20082011Percent change from 2008 to 2011
Adams1483061572646.0
Alamosa580860754.6
Arapahoe2175072290145.3
Archuleta520452470.8
Baca17211685-2.1
Bent178917900.1
Boulder1167881212703.8
Broomfield20709219596.0
Chaffee739176473.5
Cheyenne804802-0.2
Clear Creek42434169-1.7
Conejos31233115-0.3
Costilla156916102.6
Crowley121713148.0
Custer188819010.7
Delta12310124891.5
Denver2552392724216.7
Dolores900890-1.1
Douglas983781044356.2
Eagle18181190744.9
El Paso2271252418346.5
Elbert813584063.3
Fremont16124166693.4
Garfield19680203093.2
Gilpin227924658.2
Grand616363182.5
Gunnison641265512.2
Hinsdale378352-6.9
Huerfano30713024-1.5
Jackson6276361.4
Jefferson2146952204352.7
Kiowa6266341.3
Kit Carson280730729.4
La Plata20154213586.0
Lake280629876.5
Larimer1167991226205.0
Las Animas63216158-2.6
Lincoln188819422.9
Logan84428015-5.1
Mesa55703582684.6
Mineral376354-5.9
Moffat521253212.1
Montezuma10214104902.7
Montrose15908163833.0
Morgan10011103603.5
Otero761977431.6
Ouray197319860.7
Park710471170.2
Phillips18021797-0.3
Pitkin770381235.5
Prowers49264916-0.2
Pueblo61613635023.1
Rio Blanco2428269511.0
Rio Grande47654752-0.3
Routt948497683.0
Saguache259927064.1
San Juan341340-0.3
San Miguel341635173.0
Sedgwick10921083-0.8
Summit10928117407.4
Teller957098172.6
Washington194119560.8
Weld86395913775.8
Yuma386639632.5