COLORADO SPRINGS NEWS

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Intel will create hundreds of jobs
$400 million expansion being done in phases 
By PAUL BEEBE THE GAZETTE 

JULY 15, 2004 -- Intel Corp. said Wednesday that it will spend almost $400 million to expand the manufacturing capacity of its Colorado Springs chip plant, creating several hundred jobs by 2008 and giving the economy a much-needed shot in the arm.
   The company will build a second chip manufacturing area, known as a clean room, which will fill to capacity the 500,000-square-foot building on Garden of the Gods Road. The area in which the second clean room will be built is now vacant.
   The new manufacturing area, almost 4 acres in size, is expected to begin producing chips for wireless computers and other hand-held electronic devices in late 2005, Intel said.
   It “will enable us to better deliver products for our communications business,” plant manager Morgan Burke said.
   The work will be done in phases, with the first phase budgeted at $43 million. Work began Wednesday.
   The project ends speculation about plans for the plant, raised by a severe technology downturn that began in 2000, when the economy tanked. Since then, Colorado Springs has lost about 8,500 high-paying technology jobs.
   “Sometimes I really wondered. As we went on through the last four years, there were times it felt really rocky,” said Marion Shumway, who organizes management training programs at Intel.
   “But we are just thrilled. We feel it’s come around,” Shumway said.
   Intel executives wouldn’t say exactly how many jobs will be added when the project is complete.
   Limited hiring will start right away, with the bulk occurring in phases during the next four years, spokeswoman Judy Cara said.
   Most of the jobs will be manufacturing positions inside the new 160,000-square-foot clean room. A few engineering positions also are likely to be generated. Cara wouldn’t say how much the workers will be paid, but she said the average Intel salary is $53,000 a year.    The plant now employs 796 people. It makes flash memory chips used in cell phones and other wireless electronic gadgets.    Flash manufacturing eventually will be phased out in favor of WiFi, or wireless fidelity computer chips, and other communications chips.    “They are putting in infrastructure for the fastest-growing and probably the most important part of their business,” said Colorado Springs Mayor Lionel Rivera.    “So that’s exciting for us. It tells me Intel is going to be here for a while.”    In January, Intel began a $35 million project to install a WiFi manufacturing process inside the existing clean room.    When that project is finished this year, workers will assemble WiFi chips for notebook computers fitted with Intel’s Centrino technology. The project will generate 20 to 30 jobs.   City officials long have had high hopes for the plant on the west side of Colorado Springs. Intel has used only about half the building since buying it from Rockwell International in 2000.
   The Santa Clara, Calif.-based chip manufacturer scrapped an expansion plan in 2001, after the technology-led economic boom of the late 1990s fizzled.   A year later, Intel axed plans to buy land near the Colorado Springs Airport, where city officials hoped the company would put several buildings and hire thousands of people.    The plant is also home to a design center where next-generation wireless cellular communications chips are being developed.  CONTACT THE WRITER: 636-0189 or paulb@gazette.com

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Drop in home values may burst your bubble
Experts disagree on existence of over-inflated national market
By HOLDEN LEWIS, BANKRATE.COM

Either the United States is inside a colossal housing bubble that’s about to pop, or there’s little to worry about. It depends on whom you ask.
   The debate over the existence of a housing bubble has been going on for at least two years. A “bubble” happens when frenzied buyers bid up prices artificially high. Eventually, the bubble bursts and prices plummet. Believers in a real estate bubble worry that years of low interest rates have inflated home prices beyond reason. They warn that the inevitable rise in mortgage rates could cause a coast-to-coast plunge in values that would have hideous effects on the economy.
   The debate over the existence of a bubble is important because most homeowners must choose whether to protect themselves from rising home prices or from falling home prices. Home buyers make that choice, whether they realize it or not, when they decide how large a down payment to make and what type of loan to get.     Many buyers now borrow 90 percent or more of a home’s price so they can buy a place before even the least-expensive houses in their areas are out of reach. They figure they can move up to a better house in a few years. Some of these buyers get adjustable-rate or interest-only mortgages. They stretch their finances to protect themselves from further increases in home prices, but that makes them vulnerable to a dramatic drop in value.
   By most accounts, fewer buyers are doing the opposite: protecting themselves from a bubble. The best bubble-protection strategies consist of saving up for a hefty down payment (of 20 percent or more), avoiding bidding wars for houses in hot markets, shunning interest-only loans and buying houses for the long term.
   People who warn of a housing bubble say home prices have risen dramatically in the past eight years, faster than the overall rate of inflation, while rents have not kept pace. They acknowledge that real estate markets are local, and that all real estate bubbles in the past were local. But they say the rapid run-up in home prices during the past few years has been national and unprecedented, so a nationwide drop in values is possible.
   Stephen Roach, chief economist for Morgan Stanley, thinks low mortgage rates are driving up house prices artificially. He compares what’s happening in residential real estate with the dot-com bubble of the 1990s, and has urged the Federal Reserve to raise short-term interest rates now, to deflate the bubble before it gets bigger.
   Dean Baker, an economist and co director of the Center for Economic Policy and Research, agrees with Roach that low mortgage rates have inflated a bubble. He says the fad for cash-out refinances, equity lines of credit and high loan-to-value mortgages are signs of a bubble.
   Doug Duncan, chief economist for the Mortgage Bankers Association, says he is “not in the price bubble camp.” When rates rise, he expects some local housing markets to slow their pace of price appreciation. Prices might even fall in a few areas on the coasts, but not nationally, he says, because housing simply isn’t a national market. Baker dismisses the arguments put forward by Duncan and others. What is driving the rapid increase in house prices “is the belief that the price will rise more,” Baker says. People buy $300,000 houses with the belief they soon will be worth $400,000.   “They’re looking at their houses as a source of return,” he says. “I think it’s probably in general a bad idea for anyone to buy a home with the expectation that it will go up. But when you’re looking at it given current price levels, I think it’s a bad idea. It’s almost certainly not going to happen.”  The economy has been sustained during this slow economic recovery by consumers borrowing against their home equity to buy things at low-rate, tax-deductible interest. “People are borrowing against their homes because they’re confident that in three or four years they’ll be worth 20 or 30 percent more,” Baker says. “At some point, there’s only so much that you can borrow against your home.”
   Baker thinks a bubble will pop eventually, and the overall value of the nation’s housing stock will decline 15 percent to 20 percent over a period of years. He thinks the financial carnage will be worse in places where prices have been rising fastest — he names New England, the District of Columbia, New York City and environs, much of California, Seattle and Portland, Ore.
   Baker’s advice? “I would really discourage someone from buying in a bubble market today.” He thinks many of today’s buyers will “get nailed.”
   When Anthony Hsieh, president of HomeLoanCenter.com, hears arguments such as Baker’s, his voice rises. He thinks Baker dispenses harmful advice. What Baker advocates, according to Hsieh, is market timing — a tactic bound to fail in the long run.
   “Some of the brightest brains on Wall Street can’t time that market right,” Hsieh says. “As a regular homeowner that buys a house every five to 10 years, what makes you think you’re going to time the market right?”
   Hsieh disagrees that people buy their primary residences with the aim of making a profit on the resale in a few years. “If you want to make money, go short a stock,” he says.

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County jobless rate down, payrolls up
Unemployment dropped to 22 -year low in March
By WAYNE HEILMAN THE GAZETTE

APRIL 24, 2004 -- El Paso County’s economy gained strength in March as the county’s unemployment rate fell to a 2½-year low, and job growth accelerated for a third consecutive month.  The local jobless rate fell from 5.8 percent in February to 5.3 percent last month, the lowest since reaching the same level in October 2001, the Colorado Labor and Employment Department reported Friday. The county’s unemployment rate was 6.9 percent in March 2003.

The department reported that its monthly survey of employers found the number of people on local payrolls during March was up 1,700, or 0.7 percent, from a year ago. The agency calculates the unemployment rate from a separate monthly survey of households.
“It looks like the local economy has turned the corner,” said David Bamberger of Bamberger & Associates, a local economic consulting firm. “The bad news is we are down 7,800 jobs from three years ago, and it will take a while to recover those jobs.”
Falling unemployment and job growth signal the local economy is emerging from a downturn that triggered 29 consecutive months of declining employment.  The March job gains were the strongest since June 2001, when local employment was up 1.4 percent. Most of last month’s job gains came in industries paying much lower salaries than the manufacturing and technology jobs lost in the last recession. The gains were concentrated in tourism as well as financial, professional, business, educational and health services. Fred Crowley, senior economist for the Southern Colorado Economic Forum, pre-dicts the local economy will continue to improve during the rest of the year, pushing unemployment as low as 4.5 percent and job growth as high as 2 percent by year’s end.
“These numbers don’t even fully reflect the return of the troops to Fort Carson,” Crowley said. “I would expect we will regain in coming months the 1,500 jobs that were lost in the last year” resulting from deployment of 10,000 troops from the post to Iraq.
The statewide job market isn’t recovering as quickly as El Paso County. Although the state’s jobless rate fell to a 2½-year low, it did so because almost 23,000 people left the state’s labor force by moving, retiring or no longer looking for work.

Statewide payrolls offered some hope in March, rising from the previous month, but they remained 0.4 percent below March 2003. That is the smallest such decline since August 2001 and the first time the drop has been less than 1 percent in 15 months. “There is a small ray of light with these numbers and that some employers are telling me that they are doing some selective hiring,” said Tucker Hart Adams, chief economist for U.S. Bank in Denver. “It looks like at least some people are leaving the state to find work.”

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Mortgage rates start new slide - Charges lowest since July; refinancing expected  
By: NEWS SERVICES - THE GAZETTE

MARCH 12, 2004 -- The 15-year mortgage was at 4.69 percent, down from 4.88 percent. The one-year Treasury-indexed adjustable-rate mortgage averaged 3.41 percent in the week ending Thursday, down from 3.477 percent a week ago.

That put the ARM at its lowest point since Freddie Mac started tracking the issue in 1984. The 30-year mortgage and the ARM required the payment of 0.6 points to achieve the rate; the 15-year needed 0.7 points.

A point is 1 percent of the loan amount, charged as prepaid interest.

“As we had predicted earlier in the month, interest rates for 30-year, fixed-rate mortgages edged closer to last year’s record low figures,” said Frank Nothaft, Freddie Mac chief economist. “For the year as a whole, we expect long-term rates may be even lower annually than they were in 2003.”

Mortgage rates on June 12, 2003, hit their lowest level since Freddie Mac began keeping records in 1971. The national average 30-year loan bottomed at 5.21 percent.

“Families looking to lower their monthly payments even further might consider adjustable-rate mortgages. We predict ARMs will make up a much larger share of originations this year, perhaps the highest since about 1995.”

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Home sales staked out outstanding year in ’03
Low interest rates let market overcome early slump
By RICH LADEN THE GAZETTE

After a rough start during the first six months, the Pikes Peak region’s single-family housing market recorded one of its best years in 2003. Single-family home sales totaled 10,204 last year, a 4.7 percent gain from 2002, according to figures compiled this week by the Pikes Peak Association of Realtors. It’s the first time sales cracked the 10,000 mark in nearly 20 years of recordkeeping by the association’s research arm. Meanwhile, the median price for single-family homes sold in December reached $189,900, another high-water mark. That figure was up 5.9 percent from December 2002 and 5.5 percent higher than November 2003. The median is the midpoint of all sales during the month. Despite surpassing the 10,000 mark in sales, some real estate industry veterans sounded a note of caution.

Nancy Rusinak, co-owner of Rusinak Real Estate in Colorado Springs, said the increasing number of sales shouldn’t be a surprise because of a sheer increase in the area’s population. The metro area surpassed 500,000 people a few years ago and, despite a struggling local economy, continues to grow.
Likewise, although 2003 was a good year, market conditions were tough during the first half; the market was flooded with homes because of the poor economy and thousands of layoffs. “The number of houses on the market in the first part of the year was pretty scary,” Rusinak said. Then mortgage rates fell to their lowest levels in decades — averaging a low of 5.2 percent nationally in June. That’s when home sales took off and median prices that were in the $170,000s began to climb. By year’s end, the inventory of homes on the market was below 4,000. The supply of homes typically declines by year’s end, but the total of 3,578 listed for sale at the end of December was down 2.2 percent from the same month the year before. “We were pleased with how it went,” said Kevin Patterson, president of Prudential Professional Realtors in Colorado Springs. “We have interest rates to thank for a great deal of it.”
The demand for homes, propelled by low mortgage rates, also helped pump up prices, Patterson said.
Patterson and Rusinak said they’re optimistic for 2004, although the economy has to turn around locally.
Jobs are a primary driver of the single-family housing market; if more jobs are created, the market will remain strong, they said. Patterson said a rebounding national economy also will help the local market, as would as mortgage rates remaining in the neighborhood of 6 percent.

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Analyses show its time to prepare for better conditions, hiring
By: TOM ZWIRLEIN, Finance Adviser UCCS - THE GAZETTE

December 21, 2003 -- The Southern Colorado Economic Forum, housed in the College of Business and Administration at the University of Colorado at Colorado Springs, recently released its Business Conditions Index for October. The index is composed of eight seasonally adjusted economic indicators. They include: single-family and town home permits in El Paso County; Colorado Springs sales and use tax collections; El Paso County new car sales; El Paso County employment rate; Colorado Springs airport enplanements; Creighton University’s Purchasing Managers Index for Colorado; foreclosures in El Paso County; and the University of Michigan’s Consumer Sentiment report.

    The BCI is indexed to March 2001 at 100 and now stands at 100.56. In other words, the level of business activity today is the same as it was in March 2001. The BCI has been on the rise since March of this year when it bottomed at 83.62, an increase of 19.83 percent. Four of the BCI components are higher this October compared with a year ago. The four include enplanements, consumer sentiment, the purchasing managers index and employment. Although the remaining components are down, they are not down enough to cause a drop in the overall BCI. One of the index’s strengths is in identifying trends in the local economy and not getting bogged down with out-of-sync indicators.

    There are many other signs that an economic recovery is under way. A recent Manpower Inc. survey suggests a third of surveyed firms expect to hire in the first quarter of 2004. Some hiring will take place in manufacturing, a sector hit hard during the downturn. Financial services, construction and utilities are other areas where hiring is expected. The technology sector has been doing better in 2003 and will do even better in 2004. Many businesses bought new computer equipment before January 2000. This equipment is near the end of its useful life and needs to be replaced. There is evidence that replacements already are taking place. Computer and related product shipments in October were up 20 percent over the same month a year ago. Similarly, new orders were up 17 percent and total inventories were down 6 percent. Other technology sectors, with the exception of telecommunications, should experience a more prosperous 2004. 

Employment in El Paso County probably will decline for the second year in a row in 2003. The forum, however, expects a 1.5 percent increase in employment in 2004. One problem is that job creation is likely to be in lower wage/lower skill positions. In its Occupational Projections for 1998-2008, the Colorado Department of Labor reported the fastest-growing occupation will be telemarketing, a lowwage occupation. The good news is systems analysts, computer engineers and support specialists also will be in demand. 

Now that Saddam Hussein is behind bars, everyone is somewhat more optimistic that Fort Carson’s troops will return in 2004. This is one expectation we all hope materializes for more than just economic reasons. The return of 11,000 troops, however, would have a very favorable impact on the economy as the pent-up demand for housing, transportation and other goods and services materializes. There are fears that the accumulating federal budget deficit, along with an improved economy, will push interest rates up. This would hurt the construction industry as well as some durable goods sectors, such as automobiles. On the positive side, a weak dollar helps U.S. exports. All this news suggests business should prepare now for an upswing in local economic activity. If a business hasn’t hired for a while, perhaps it’s time to look over current hiring practices. Is the process up-to-date with current regulations? In what area of the business will you hire employees first when economic conditions improve?
Are you familiar with current wage and benefit packages for the position? Will there be enough space for new employees? How old is your technology? Is it time to make technology upgrades? Is your inventory up-to-date?  Now is the time to take stock and assess the health of the business and your ability to meet a sudden increase in demand. Remember the famous motto: “Be prepared.”

The Southern Colorado Economic Forum publishes a quarterly report on the El Paso County economy. To obtain an electronic copy of the “Quarterly Updates and Estimates,” send an e-mail message to Fred Crowley at fcrowley@uccs.edu . In the subject line, write “Subscribe to QUE.” Tom Zwirlein is a professor of finance at the College of Business and Administration, University of Colorado at Colorado Springs. E-mail him at tzwirlei@uccs.edu. The weekly Adviser column offers advice for the business community. It rotates among a group of local experts and business leaders.

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Jobless rate misleading
Numbers fall, but many unemployed stop looking for work
By WAYNE HEILMAN THE GAZETTE

November 22, 2003 -- El Paso County’s unemployment rate fell to a 2-year low in October, mostly because jobless residents left the area or stopped looking for work. The Colorado Labor and Employment Department reported Friday that 5.5 percent of the county’s residents were out of work last month, down from 5.8 percent during September and the lowest since 5.3 percent of the county’s residents were without jobs during October 2001.

Although nearly 2,400 fewer county residents were unemployed during October compared with a year ago, more than 2,500 people left the local job market during the past year because they moved away, returned to school or stopped looking for a job.  “It looks like the unemployment rate is lower simply because people have stopped looking for work,” said Tucker Hart Adams, a Colorado Springs resident who is economist for U.S. Bank in Denver. “I don’t see any evidence that Colorado is getting better.”

Another report the state released Friday supports that conclusion. The number of workers on local payrolls in October fell 2 percent from a year ago to 237,200, the eighth consecutive monthly decline and the largest such drop since August 2002.  The state surveys employers to determine the number of people on payrolls and surveys households to calculate how many are unemployed.

“A recovery has not come to Colorado Springs in any meaningful way. It is only a recovery when people can find work,” Adams said. “Not only do we have fewer people working, but many of those who are employed are in lowerpaying or part-time jobs.”  The Colorado Springs economy is still suffering from the loss of more than 9,000 jobs during the past 2½ years. Most of those losses have been concentrated in technology, manufacturing, telecommunications, construction, retailing and transportation, the department said.

Housing construction, new vehicle sales, city sales tax collections, airport passenger traffic and other indicators have shown signs of improvement during recent months. Employers likely will remain reluctant to hire until those trends become more firm. “While demand is increasing for some goods, the manufacturers in this area are late enough into the manufacturing process that they haven’t needed to increase hiring yet,” said Fred Crowley, economist for the Southern Colorado Economic Forum.  Some employers have begun hiring temporary workers, particularly in the light manufacturing and retailing industry, said Shail Powers, manager for Adecco Employment Services in the Springs, one of the world’s largest staffing agencies.

Employers often hire temporary workers early during a recovery until they are sure increased sales will last long enough to support a hire.  Elsewhere in the area, Teller County’s unemployment rate remained unchanged from September at 3.9 percent last month, compared with 4.2 percent a year ago.
The statewide picture was similar to El Paso County’s: Colorado’s unemployment rate fell to 5.5 percent during October from 5.6 percent during September. The state’s rate is adjusted for seasonal changes, but such adjustments are not made for El Paso or Teller counties.  Colorado payrolls during October were down 0.9 percent from a year ago to 2.16 million, with most of the losses concentrated in manufacturing and construction. Manufacturing payrolls, however, showed some improvement, increasing from September.

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Housing sales over summer season beat expectations
By RICH LADEN THE GAZETTE

September 14, 2003 -- The summer sizzled, and it wasn’t just the temperatures.  As mortgage rates plummeted to historic lows, more homes were bought, sold and started in the Pikes Peak region over the summer than economists and industry experts had forecast.  “I didn’t think we could have quite the robust market we had this summer,” said Joe Clement, broker-owner of three Colorado Springs-area Re/Max Properties Inc. offices.
   Summer is typically high times for the housing market as families plan their moves when kids are out of school.    Heading into this summer, however, the pace of new home construction was slow compared with the past few years. The supply of homes for sale was sky high. And prices were soft because of ample supply and reduced demand.  Those market conditions were byproducts of a Springs economy in which layoffs and job cut announcements have totaled more than 9,000 since early 2001.  Economists and real estate experts credit low mortgage rates with giving the single-family housing market a big boost this summer, especially as the local economy recovers slowly from a national recession.
   Consider:    Single-family home sales May 1 through Aug. 31 rose 6.2 percent over the same period last year, according to the research arm of the Pikes Peak Association of Realtors. And, this summer’s sales were nearly 9 percent higher than the same four-month period in 2000 — when the local economy was humming.  Single-family building permits from May through August of 2003 were down from the same period a year ago, but by only 3.2 percent, according to the Pikes Peak Regional Building Department. Because home construction picked up this summer, single-family building permits for this year could total 4,000 — a number economists didn’t think possible in 2003.   Median single-family home prices — the midpoint for all individual home sales in a given month — cracked the $180,000 mark in May and have stayed there ever since, according to the Realtors Association. In August, the median price for local home sales was $185,000, 5.7 percent higher than the same month a year earlier.
   Several neighborhoods with huge supplies of homes listed for sale saw inventories fall, according to figures compiled by Re/Max Properties and based on homes listed for sale via local real estate agents.
   Fast-growing Briargate on the Springs’ north side, for example, had a 3.1-month supply of homes for sale Aug. 31, 2002. But on Aug. 31, 2003, it had shrunk to a 1.9-monthsupply.  The Springs’ northeast side, meanwhile, had a 4.1-month supply of homes for sale by the end of August 2002; that number had fallen to 2.9 months a year later.   “No question, it felt good,” said Harry Salzman, owner of Salzman Real Estate Services LTD in Colorado Springs, who said the past few months were one of his best summers.
   Mortgage rates were the primary reason.  Nationwide, 30-year fixed rates averaged 5.2 percent in mid-June, according to national mortgage giant Freddie Mac. And that was the average; some buyers locked in at even lower rates. Mortgage rates do more than just help families afford first homes and help existing homeowners move up into their second or third homes. In both cases, buyers can afford a larger home for their money.
   That explains why some pricier neighborhoods of the Springs and El Paso County saw reductions in the supply of homes for sale in their areas, Clement said. Those include neighborhoods in the northwest and southwest; Monument, north of the Springs; and the unincorporated Black Forest area north and northeast of town.  “Interest rates allow us (homeowners) to get (our) homes sold, which creates a buyer,” Clement said. “A lot of the buyers, created by the sale of their homes . . . all of a sudden they’re going to step to that bigger home in Briargate or a lot nicer home in Black Forest.”
   And while the local economy remains in a slump, the area’s population has risen this year, albeit by the smallest increase in 13 years. Even a slight gain means more people potentially buying homes, said economist Fred Crowley of the Southern Colorado Economic Forum. Nothing lasts forever, however, and whether the housing market’s recent strength will continue through the rest of 2003 remains an unknown.
   Mortgage rates of 5.2 percent in June climbed to a nationwide average of 6.4 percent in early September, according to Freddie Mac.  That’s still very affordable, of course, especially when compared with double-digit rates of the mid- to late-1980s. And some buyers might want to consider adjustable rate mortgages, which averaged slightly less than 4 percent in the first week of the month, Salzman said.
   Still, rising mortgage rates mean some people can’t afford to buy a home or can’t afford as much of a home, said economist Dave Bamberger of Colorado Springs economic research and consulting firm David Bamberger & Associates. For every 1 percentage point increase in rates, home buyers lose about 9 percent of their purchasing power, Bamberger said. For example, a 5 percent mortgage rate would allow an entry-level buyer earning nearly $47,000 annually to afford a $180,000 home, Bamberger estimates. But with a 6 percent rate, the price the buyer can afford drops to $163,752. With a 1 percentage point increase in rates, 7,900 fewer Colorado Springs-area households can qualify to buy a $150,000 home, Bamberger estimates.  But mortgage rates of more than 6 percent aren’t a death knell for the local home-building industry.   Builders have avoided flooding the market with speculative housing — homes built without a contract, Bamberger said. As a result, the new home supply matches demand, and builders aren’t overextending themselves. Fort Carson soldiers returning to the area next year also could help boost the market, Crowley said. Bamberger, who traditionally offers dueling scenarios when forecasting the housing industry’s future, suggests a rapid economic recovery could mean 4,220 single-family building permits in 2004 — a healthy year. That scenario is based on mortgage rates not climbing much past 6 percent and more than 6,700 new jobs created next year. But a slow economic recovery could mean fewer than 3,600 singlefamily permits next year, Bamberger suggests. His slow recovery scenario is based on 6 percent mortgages, but only 1,540 new jobs in 2004. CONTACT THE WRITER: 636-0228 or rladen@gazette.com

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Rein in insurance costs by assuming more risk
By RAY MARTIN CBS MARKETWATCH

Publication: The Gazette; Date:AUG 04, 2003; Section:Business; Page 39 - BOSTON - Protecting a house with homeowners insurance is supposed to provide security from the risks of property and liability losses. But today, few homeowners feel secure about their insurance: Millions are being hit with increased premiums, lower coverage, denied claims and canceled policies. The situation is being called a homeowners insurance crisis in some areas, with major providers like State Farm Insurance no longer writing new policies in states including Texas, California and Louisiana. A Consumer Federation of America survey found that, nationwide, homeowners insurance rates increased by more than 13 percent in 2002 and 7 percent in 2001. In many states, however, the increases were much higher.

Several factors contribute to this "crisis": Investment income has been falling at insurance companies; the costs of certain claims, such as those caused by mold, have doubled since 1997; the costs of repairs have increased; and home values have increased — all of which increase the risks insurance companies are taking on.  Also, up until recently, homeowners insurance was typically offered as a loss leader to get a customer’s more lucrative auto insurance business. Now that major providers such as GEICO and Progressive Insurance have aggressively gathered market share in auto insurance, many companies are left with large portfolios of home policies for which they pay out millions more in claims than they collect in premiums. Nationwide, insurance companies paid out $6 billion more in claims and expenses in 2002 than they collected in premiums.

The new reality in the homeowners insurance industry is that insurers are charging higher premiums and imposing tougher underwriting standards on coverage they provide to homeowners, which includes canceling coverage for habitual claims filers and terminating coverage based on the past claims history of a particular property. Insurance companies long have charged more for life insurance coverage for smokers and for auto insurance for those with more driving indiscretions. Now, smart homeowners will think twice about making a claim for a loss on their homeowners’ insurance — much as they do for claims on their auto insurance.

Here is what you should know:

1. Don’t file small claims. Why pay for coverage you’re not going to use? According to insurance-industry analysis, if you have had a loss in the past three years, you are 25 percent more likely to have a loss in the next 12 months. This likelihood increases to 75 percent if there are two losses in one year. Think twice before filing small claims for things like lost luggage or other personal property items because you may need to claim a more substantial loss later. Even claims filed but not paid are recorded as a claim and loss. Several claims over a short period may trigger your insurance company to view you as a habitual claims filer and lead to cancellation.

2. Assume more risk. Raising your deductible from $250 to $1,000, or even $2,500, can save you more than 20 percent on your premium. It also reduces the risk your insurance provider is taking on and you will be less tempted to inquire about or file smaller claims.

3. Get a CLUE report. The Comprehensive Loss Underwriting Exchange, or CLUE, is a database monitored by ChoicePoint Inc. that includes more than 40 million claims over the past five years. CLUE provides the most widely used records of past claims and loss reports for insured property and is used by 90 percent of the homeowners insurance market. Homeowners may obtain a CLUE report from Choicetrust.com (www.choicetrust.com) for $12.95 (free if you’ve been denied coverage). Homeowners selling their property should get a copy to make sure there are no errors or inquiries that create the "tainted house" scenario. Homebuyers should request the CLUE report from the seller or their real estate agent before making an offer.

4. Inquire carefully. The mere inquiry about how a claim would be handled can become a problem. In certain states, calling your insurance company to inquire about a potential claim can be added to a loss report for the property.

5. Maintain before repairs. Losses due to water damage are of particular concern because they are expensive to repair and can create other losses such as mold infestation. Some insurance providers report that although the number of water-damage related clams has risen only slightly since 1997, the cost of repairs has more than doubled. Inspect household fixtures that connect to a water source for leaks: toilets, washers, dishwashers and refrigerators.

If major carriers reject you, your only option may be your state’s high-risk pool or surplus-lines insurance company. Fair Access to Insurance Requirements, or FAIR Plans, are high-risk insurance pools provided in 32 states. In other states, surplus-line carriers provide coverage for higher-risk properties.
 

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It’s still early, but latest figures depart from downward trend
By RICH LADEN THE GAZETTE

One month doesn’t make a trend. Yet some members of the local real estate industry were encouraged Wednesday by June figures showing increased single-family home sales and prices and fewer homes on the market. The figures depart from the sales trend of the past several months in the Pikes Peak region, when a glut of homes and softer demand led to relatively stable prices. "There are a lot of buyers in the marketplace," said Harry Salzman, owner of Salzman Real Estate Services LTD in Colorado Springs.

Single-family home sales in the Pikes Peak region totaled 1,095 in June, a 15.5 percent jump over the same month a year ago, and 12.3 percent higher than May of this year, according to the research arm of the Pikes Peak Association of Realtors. In fact, the 1,095 homes sold in June were the highest monthly total since August 2001, according to the association’s figures.

Most of the homes were sold in El Paso and Teller counties, with buyers and sellers represented by real estate agents who belong to the association. Meanwhile, the supply of homes for sale in June was up 12.7 percent over the same month last year — but down 3.2 percent from May. That’s the first May-to-June reduction in several years. Typically, summer is a time when families move and more homes go on the market.  The median single-family home price in June rose to $187,387, a 1.8 percent increase from the same month last year, and a 2.3 percent gain over May. The median is the midpoint of all individual sales. In June, half of all homes sold for less than $187,387, and the other half sold for more.

As mortgage rates fell in June to about 5 percent, more buyers took the plunge, triggering greater demand, Salzman said. He represented a seller in Rockrimmon, who listed a home for $234,900. Within three days, the seller had five offers — and sold the home for the asking price, Salzman said. Salzman added he’s having a tough time keeping tenants in rental property his company manages. "It’s cheaper to own than rent," he said. Bud Patterson, of Prudential Professional Realtors in Colorado Springs, speculated recent stock market gains helped improve consumer confidence, which translated into more sales, he said.
"We had our share of higher-paying jobs we lost," Patterson said. "It seems like when the stock market started back, the whole mind-set of our customers seemed better."

SINGLE-FAMILY HOME SALES

Total home listings
May: 4,518 June: 4,372 3.2 percent decrease

Total home sales
May: 975 June: 1,095 12.3 percent increase

Median price:
May: $183,250 June: $187,387 2.3 percent increase

Average price:
May: $218,823 June: $228,213 4.3 percent increase

SOURCE: Pikes Peak Association of Realtors. 2003 figures, reflecting homes sold by association members.

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Sales slowing - Economy, oversupply cause home market to sputter
By RICH LADEN THE GAZETTE

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Some builders bet on adding homes despite poor economy
RICH LADEN THE GAZETTE

$120K & up Search for New Homes/ New Construction in the Colorado Springs Area

MARCH 9, 2003 -- Who’s building all those houses in El Paso County, anyway?

When local economist Fred Crowley saw Pikes Peak Regional Building Department figures last week showing home construction this year running 6.7 percent ahead of 2002, he found the numbers difficult to believe.
With about 8,600 job cuts locally over the past two years, and a Colorado Springs economy dogged by plant closings and sagging sales tax revenues, nobody expects more homes will be built this year than last year.

And yet, despite the economy, some builders believe buyers still are out there — especially if mortgage rates remain low and if builders put the right price tag on their homes.
The right price is especially important, said Ron Covington, president of the Springs division of John Laing Homes, a California-based builder.

Buyers have many choices among new and used homes, Covington said. And, many buyers will take time to research purchases and to make up their minds. Part of that research should include talking to people who have bought homes from a particular builder, Covington said. That way, potential buyers will learn how builders treat a buyer after the sale.

In the end, Covington said, many buyers will have an idea of what a home should be priced and what a builder incentive will do — if anything — to affect the price they pay.

"They’re not walking into one sales office and buying," Covington said. "Today’s buyer is taking a little more time. They’re taking the time to understand what they’re getting. If you have an (real estate) agent who’s doing ‘comps’ (comparable sales), you can understand the right price."

The Housing & Building Association of Colorado Springs has launched a new charitable program: HBA Cares. The program will make donations to organizations that provide housing or housing assistance to Pikes Peak region families.

For this year, seven organizations were selected by the HBA to receive donations: Silver Key, Partners in Housing, Greccio Housing Unlimited, TESSA, the American Red Cross, Habitat for Humanity and Urban Peak.  To raise money for those organizations, local custom home-builder Scott Building will construct a 5,000-squarefoot home in the University Park area, southwest of Academy Boulevard and Vickers Drive. Profits from the home’s sale will go to the selected nonprofits.

G.E. Johnson Construction Co., a longtime Colorado Springs-based general contractor and one of the region’s largest construction companies, is expanding and relocating its 2-year-old Denver office.
President Jim Johnson says the company is focusing on regional projects more than ever, and the larger office will help the company better serve clients in Denver and northern Colorado.

Johnson said the company has no plans to move its headquarters out of the Springs. Last year, the company moved its Springs west-side office to 25 N. Cascade Ave. downtown.
 

Slow economy creates bargains for home buyers
Supply outweighs demand in Springs
By RICH LADEN THE GAZETTE

February 8, 2003 -- There’s one upside to the lousy local economy — at least if you’re buying a home. Although home prices in the Pikes Peak region during January were slightly higher than a year ago, prices for the most part have held steady during the past seven months. A glut of homes on the market and softening demand for expensive properties in trendy neighborhoods forced some sellers to cut thousands of dollars off their asking prices. "There’s a lot (of supply) out there, and there’s a lot of competition," said Doug Barber, president of the Rawhide Co. in Colorado Springs and board chairman of the Pikes Peak Association of Realtors. The median price for a single-family home was $177,475 in January, up 4.4 percent from the same month in 2002, according to figures the PPAR compiled.  The median is the midpoint of individual home sale prices. Many real estate experts consider it a more accurate barometer than the average, which a few very high or low sale prices can skew.  January’s median home price changed little from July’s. Since then, prices have inched up and then fallen back, which indicates a huge supply of homes is helping hold prices down.

Last month, members of the PPAR listed 4,012 homes for sale — a 26.6 jump from January 2002. The supply of houses has swollen because of more than 8,500 layoffs and job cut announcements in the Pikes Peak region since early 2001. When workers lose their jobs, some relocate or scale back their lifestyles and move into apartments. Either way, more homes go on the market. With a greater supply, sellers battle each other to win buyers. Prices aren’t necessarily dropping in every neighborhood or in every price range. But cuts are common for homes priced at $400,000 and higher in areas such as the Tri- Lakes communities north of Colorado Springs and Springs neighborhoods in the north west and southwest, said Joe Clement, broker-owner of three area Re/Max Properties Inc. agencies. Clement had one client who dropped the asking price to $549,000 from $569,900 and another who cut the price to $432,500 from $450,000. "I wouldn’t call it fierce yet," Clement said of price slashing among sellers, "but competition is strong."

Homes continue to sell, although sales were down a modest 3.7 percent in January from the same month a year earlier. The cheapest mortgage rates in decades continue to attract buyers, Barber said.  Nationwide, mortgage rates for a 30-year conventional loan averaged 5.88 percent this week, with 0.7 points, according to Freddie Mac, one of two organizations Congress created that buy loans from lenders and package them to sell to investors. In the West this week, 30-year mortgage rates averaged 5.82 percent, with 0.9 points, Freddie Mac reported. Some investors beaten up in the stock market during the past year also see homes as a safe and steady investment, Barber said. The latest PPAR figures reflect homes for sale mainly in El Paso and Teller counties. The latest prices also reflect homes sold by association members, who handle a majority of the region’s sales.

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Deployment hits economy selectively
By WAYNE HEILMAN - THE GAZETTE

January 22, 2002 -- Fort Carson soldiers were flooding through the doors of the All `N One Store, 1753 B St., dropping off uniforms Tuesday to be cleaned or repaired.

Soldiers also were beating a path to the door of the Off Post Barber Shop to get haircuts before they are sent overseas for a possible war with Iraq.

About 4,000 soldiers have received orders to join a troop buildup in the Persian Gulf region, Fort Carson officials said Monday. Nearby businesses that depend on Fort Carson soldiers' paychecks are bracing for a slowdown that likely will follow Fort Carson's biggest deployment since the Vietnam War.

"We know it will be pretty rough, but we won't close," said Terry Romero, whose family owns and operates the Off Post Barber Shop. "We are used to soldiers deploying when they go off for training. There are still enough troops left at Fort Carson to support us."

Romero's shop is typical of businesses near the post that depend on military business for survival. Restaurants, apartment complexes and tattoo parlors close to Fort Carson will be hurt by the temporary departure of nearly 30 percent of its 15,000 troops. Some businesses started feeling the effects of possible deployments months ago. Bill Phillips of New Image Rent to Own said military personnel have been reluctant to make financial commitments -- like renting furniture -- for months because of rumors of deployments.

Not all the effects on businesses are negative. Dyanna Beyer, manager of the Stor N Lok self-storage complex at 1625 LaShelle Way, is getting calls from soldiers who must store belongings. She hopes to rent many of her 98 vacant storage units in the coming weeks.

While businesses close to Fort Carson could be hit hard by the deployments, two of three local economists said Tuesday they expect the troop departures to have little effect on a Colorado Springs economy weakened by 8,500 layoffs in the past two years. "It looks to me that the impact will be fairly selective, concentrated among services and retailers near Fort Carson," said David Bamberger of Bamberger & Associates, a Springs-based economic consulting firm. "I expect the areawide impact to be minimal."

Deployments from Fort Carson during and after the Gulf War in the early '90s -- though not large -- had little impact on the local economy, Bamberger said. A greater concern is whether a war would damage consumer confidence further and slow spending.

Tucker Hart Adams, a Springs resident who is chief economist for U.S. Bank in Denver, said deployments have a short-term economic effect, but don't damage the local economy by eroding the economy's foundation because soldiers eventually return to the post.

"It could force some retailers out of business who were just barely hanging on and can't last another few months, but the auto dealer and the supermarket will survive," Adams said. "The technology layoffs are more serious -- those jobs are gone for good."

A much larger deployment from Fort Carson -- possible if there is war -- could be enough to delay a recovery for six months or more, said Fred Crowley, economist for the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs.

He estimated deployment of 11,000 troops -- including the post's three largest units -- for six months or more could drain nearly $300 million in income from the local economy. That would equal the effect of the 8,500 layoffs but be concentrated in six months.

"It would be much more pain more quickly," Crowley said. "For example, you could see apartment vacancies rising from 11 percent today to 13 percent or 15 percent and the loss of $4 million in sales tax collections by the city, county and state governments."

That might be enough to delay an expected recovery from the recession from midyear into 2004, Crowley said. Fort Carson's deployment will include the 3,600-soldier 3 rd Brigade Combat Team along with about 400 soldiers from the 10 th Combat Support Hospital and the 571 st Air Ambulance Medical Evacuation Company.
 

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November 15, 2002 -- A Homeland Defense and Homeland Security Conference will take place in Colorado Springs at The Broadmoor Hotel on January 14th through the 16th. The conference will examine the development of strategies, requirements, solutions and plans at the regional, state and local levels. It will include reports on federal and state grants, briefings by leaders within Northern Command, reports from Capital Hill, as well an information sharing workshop by the Network, Information and Space Security Center at UCCS. Get more information about the conference at: www.marketaccess.org, or call Wes Karchut at 719-471-8183. Article compliments of The Greater Colorado Springs Economic Development Corporation.

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Prices stable, but home sellers are facing long wait
By Rich Laden , The Gazette & David Bamberger, Economist, El Paso County

Sunday, September 22, 2002 - "...Because of an ample supply of homes on the market in the Pikes Peak region, and because a slumping economy has softened demand ... some areas have an abundance of homes for sale..." 

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Home prices push Denver to top ranks
City in top 10 overpriced markets in U.S., reports say
By Kristi Arellano; Denver Post Business Writer
 

Wednesday, September 18, 2002 - Sticker-shocked homebuyers who think Denver's housing prices are too high are in good company.

Three separate analyses have ranked Denver among the 10 most overpriced housing markets in the country.

The rankings, produced by Economy.com, Fidelity National Information Solutions and John Burns Real Estate Consulting, compared home prices and incomes to determine benchmark home values. Some rankings also used mortgage rates, employment and builder costs to determine the benchmark or ideal home value.

"What we're looking at is what values would be if there was no emotion in the market," said Mike Sklarz, author of the Fidelity National Information Solutions report.

Actual home prices tend to fluctuate above and below the benchmark values. A market is considered overpriced, according to the reports, when it exceeds the benchmark by a large percentage.

Denver, along with San Diego, earned an overpriced ranking in all three reports. Boston, Baltimore, Miami and San Jose, Calif., each appeared on two of the lists. Colorado Springs made a single appearance on Economy.com's list.

"The situation in Denver is, in so many ways, a product of nearly a decade of prosperity and growth," said Tom Clark, a regional economist at the University of Colorado at Denver.

Rocky Scott, president of the Greater Colorado Springs Economic Development Corp., said it's difficult to determine whether a market is overpriced based on incomes alone.

Prices are high in places such as Denver and Colorado Springs because there's a premium in mountain areas, he said.

Home prices are outpacing incomes in Colorado Springs and Denver, but experts are hesitant to say that either market is in a bubble, meaning prices are at risk of dropping.

"The bubble characterization implies that there is going to be a sudden collapse." Clark said. "I think what we're really going to see is a gradual shift in the market."

High-end homes could lose some of their value, but more moderately priced homes will hold their value because of low mortgage rates and demand from first-time and downsizing buyers, Clark said.

"Just because prices are extended doesn't mean they're going to come down," Sklarz said. "Prices tend to be very sticky on the downside."

He predicts that prices will level off for a few years until incomes catch up.

Scenarios that might cause home prices to plummet include a sharp spike in mortgage rates or massive job losses and an exodus of residents, experts said.

Colorado cities might be at greater risk of losing jobs, as recent figures from the U.S. Bureau of Labor Statistics showed that the state ranks last in job growth. The state demographer also has lowered his projection for the number of people expected to move into the state this year from 35,000 to 20,000.

While it's lower, it still represents an increase in population.

"People still want to live and locate their businesses in the area," said Kit Cowperthwaite, a broker associate with Distinctive Properties and president of the Denver Board of Realtors. "We have a lot of cushioning in our market that will protect us from a freefall in prices."

A recent increase in the number of homes on the Denver-metro market caused a small dip in higher-priced homes, but houses priced below $300,000 will continue to appreciate, Cowperthwaite said.

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Home prices down in July -- Region's economic troubles move in
By Rich Laden The Gazette

August 3, 2002 -- COLORADO SPRINGS -- Pikes Peak area home prices, which have been up and down for much of this year, dropped in July after setting records a month earlier.

A slumping economy is a big reason sellers and buyers saw flatter prices, one real estate expert said.

The median price for a single-family home in July was $177,450, the Pikes Peak Association of Realtors said.

That figure was 3.6 percent lower than June's record median price of $184,000, but it was 4.4 percent higher than the median price of $170,000 in July 2001. The median is the midpoint at which half the homes cost more and half cost less.

The same trend held true for the average home price, which was $205,696 in July. That was down 5.7 percent from June's record average of $218,082, but up 0.8 percent from $204,041 in July 2001. Some real estate experts consider the average less reliable than the median because it can be skewed by a few high-priced or inexpensive sales.

The July numbers reflect home sales in El Paso and Teller counties, along with a handful from Douglas, Fremont, Park and Pueblo counties. The prices reflect homes sold by Realtor association members, who represent a majority of the region's home sales.

Bill Hurt, president of ERA Shields Real Estate in Colorado Springs, said the sour economy was one factor affecting home prices in July. Job cuts and layoff announcements, which total more than 6,000 since early 2001, haveforced some people to leave the area in search of work or to move to smaller homes.

In either case, their homes help swell the housing inventory, which puts a lid on price increases. In July, homes listed for sale totaled 4,041, up 4.2 percent from June and 15.2 percent higher than July 2001, the Realtor association said.

"If you've got 10 homes out there in the neighborhood, people are going to start looking at each other and cut the price a little bit," Hurt said.

Price cuts typically have come on $300,000-and-up homes in the past few months. Now, "we're seeing a flattening of prices pretty much across the board," Hurt said.

Sale activity, however, remains relatively strong, with mortgage rates at their lowest level in 40 years. The number of home sales in July rose 4 percent over the same month in 2001. Likewise, home sales for the first seven months of this year are up 3 percent over the same period in 2001.

Springs losing fewer jobs
Layoffs slowing, but high-tech companies aren't hiring
By Chris Walsh/The Gazette

JUNE 25, 2002 -- COLORADO SPRINGS --  Layoffs in Colorado Springs this year have tapered off significantly compared to the first half of 2001, another sign the local economy slowly is emerging from a recession.

Springs companies have slashed about 1,100 jobs since January, with the lion's share of layoffs in the high-tech and manufacturing industries, local economists said. By mid-June 2001, firms in Colorado Springs announced more than 2,700 job cuts as the national recession began to take hold. More than 80 percent of those layoffs were in high- tech companies.

Despite the significant slowdown in local layoffs, economists said many companies still are shelving hiring plans, and there may be more pain before the employment situation improves.

"The layoff numbers so far this year are less than half what they were a year ago," local economist Dave Bamberger said. "So it certainly looks as though things are getting better rather than getting worse ... but there are a couple of big companies that could be exposed to layoffs."

Other local economists pointed to several struggling large national technology firms that have significant Springs operations. Cable television provider Adelphia Communications Corp., which employs 700 in El Paso County, is widely expected to file for bankruptcy this week. Shares of telecommunications giant WorldCom Inc., the largest private employer in the Springs with 3,900 workers, have nose-dived in recent months, forcing the company to restructure.

Many firms, particularly in technology, are waiting for a clearer economic picture before they begin hiring. While the overall national economy seems to be recovering at a steady clip, the tech industry has been shaky, and companies continue to provide dim financial expectations.

Because of that, the local job market has remained somewhat grim.

"It's still hard to find a job, but it's starting to improve, slowly," said Peggy Herbertson, director of the Pikes Peak Work Force Center, which offers resources for unemployed and recently laid off workers.

Indeed, the May unemployment rate in El Paso County was 5.5 percent, compared to 3.5 percent during the same month last year. And there were 900 fewer jobs in May of this year in the Springs area than in the same month last year.

Claims for unemployment insurance also are up significantly this year - from 9,558 through the first six months of 2001 to 16,998 this year, the work force center said. But many of this year's claimants likely lost their jobs in the last quarter of 2001, Herbertson said, and for a variety of reasons didn't file for unemployment insurance until January.

Still, the local economy appears to be recovering, with increased lodging and car rental tax collections, a spike in single-family home construction permits and rising sales of new cars.

But to get Springs-area companies hiring again, the national technology sector must rally, local economists said.

And that won't happen overnight.

"It's highly unlikely we're going to see a steep ramp in hiring," said Robert Scott, president of the Greater Colorado Springs Economic Development Corp. "We'll probably work our way back slowly."

Fred Crowley, an economist with the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs, said he doesn't expect the hiring picture to change significantly until late summer. Local manufacturers, such as computer chip-makers Intel Corp. and Atmel Corp., could galvanize the economy by hiring and finishing expansion plans, Crowley said.

"I still think it's going to be August or September before we're all convinced we've seen employment fully recover. We need to get the high-paying, manufacturing-based jobs back."

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I-25 bypass up for discussion
By Jeremy Meyer/The Gazette

May 13, 2002 -- COLORADO SPRINGS Forty years ago when nothing but high grass grew on the plains in eastern Colorado Springs, city and county officials envisioned a freeway - and the dream that will become the Powers Corridor was born.

Today, the region's fastest-growing area is poised to get its bypass, which will someday connect to Interstate 25 at Briargate and Fountain. When that will happen is anyone's guess.

Colorado's Department of Transportation has taken over the project and is in the process of swapping roads with the city and county in exchange for acquiring Powers Boulevard. The state will begin holding public meetings, starting May 21, to discuss plans for the highway.

Late this summer, La Plata Investments will begin work on a $3.5 million project to extend Powers north from Research Parkway to Briargate Parkway. Later this year, the state will begin work on a $31 million project to extend Powers from Old Ranch Road to Interquest Parkway. When those two projects are completed, by 2004, I-25 traffic will have a direct route to Powers.

The other project planned for the boulevard - construction of a Woodmen Road interchange - is being held up because of lack of funding, said Dave Poling, CDOT project manager. The only overpass so far is at Platte Avenue, which was finished last year.

An environmental assessment on changing the boulevard into a freeway is in the beginning phases. The 18- to 24-month process will examine how the area would be affected and would decipher the purpose and need for a Powers corridor and whether it should become a freeway or expressway, meaning it will have fewer interchanges.

The state Transportation Department has earmarked $220 million for the Powers corridor, and the project is one of 28 statewide strategic transportation projects, meaning officials have deemed it an important one. But transportation funds have been in jeopardy because of budgetary problems, and it is unknown how that will affect the project's future.

Nevertheless, we are closer to having an eastern thoroughfare than ever before, Steven Watt of Wilson & Co. Engineers and Architects said.

"When I got here in the early 1980s, I felt there was no hope in ever seeing Powers connected at both ends to I-25," Watt said. "Now we're a handful of years away from seeing that."

Groups have been asking for the highway since 1963 - just a few years after I-25 had opened through Colorado Springs, he said.

"I think it's miraculous that they realized having this one freeway through town wasn't going to be enough," he said. "They knew growth was going to happen to the east. And they knew if they didn't plan for it, they would have another Academy Boulevard on their hands."

The city began preserving right of way along Powers Boulevard. In 1982, the location of the Powers freeway was established and a task force was formed.

In 1984, the city and El Paso County agreed to cooperate in the planning, design, funding and construction of Powers.

Two years later, the Metropolitan District formed to construct about 7 miles of Powers Boulevard.

By 2003, planning and design may begin on the Powers corridor, and another environmental assessment may begin on the southern portion of the highway from Mesa Ridge Parkway to Fountain.

Now is the time for people to get involved in the process, ask questions, voice their opinions or just quiz an engineer, he said. There are several places to do that - at public meetings, a Web site and a telephone information line.

Meetings on Powers Boulevard plans
4 to 7 p.m. May 21, Explorer Elementary School gymnasium, 4190 Bardot Drive.

4 to 7 p.m. May 22, Radisson Inn and Suites, 1645 N. Newport Road.

4 to 7 p.m. May 23, Friendship Assembly of God, 3685 Bloomington St.

Web site: www.thepowerslink.com

Telephone: (719) 598-LINK (5465)
 

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Home prices march higher
By Rich Laden/The Gazette

April 3, 2002 --  COLORADO SPRINGS Single-family home prices in the Pikes Peak region resumed their ascent in March, halting a two-month slide.

The median price for a single-family home last month rose to $173,000, a 1.7 percent increase from February and a 4.9 percent jump over March 2001, according to figures released Tuesday by the research arm of the Pikes Peak Association of Realtors.

The March increase is the first since December. Bowing to a slumping local economy, median prices declined in January and held steady in February.

The increase also is evidence of a dwindling supply of lower-priced homes, said Steve Shuttleworth of Fidelity Real Estate, chairman of the Realtors' board of directors. Having fewer homes available at the lower end likely is pushing the median price up, he said. "It's a continuing concern to find affordable homes in Colorado Springs," he said.

The median is the midpoint of all sales; in the case of March, half of homes sold went for more than $173,000 and the other half went for less.

The average home price also rose in March to $208,775, up 4.3 percent from February and a 9.2 percent increase from March 2001.

All prices reflect homes sold by association members, which represent the majority of homes sold in El Paso and Teller counties.

Some real estate experts say the median price is a better measure of the market because average prices can be skewed by a few very high or low prices.

The inventory of homes for sale by association members in March totaled 3,310, down 4.1 percent from the same month a year ago. The decline might be a result of some sellers pulling their homes off the market until economic conditions improve, Shuttleworth said.

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Single-home prices stabilize
By Rich Laden/The Gazette

March 6, 2002 --  COLORADO SPRINGS Single-family home prices leveled off in February, although it's still more expensive to buy a home now than a year ago in Colorado Springs.

February's median price for new homes and resales was $170,050, 7.6 percent higher than the same month last year, said figures released Tuesday by the research arm of the Pikes Peak Association of Realtors.

Although February's median price was up compared with last year, it basically was unchanged from January and dropped 1.7 percent from December.

The median is the midpoint, meaning half of all individual home sales in February were less than $170,050 and half were more. Some industry experts consider the median a true measure of pricing, as opposed to the average price, because it's less likely to be skewed by a few very high- or very low-priced sales.

February's average home price was $200,254, a 3.2 percent increase over the same month last year, but down 3.5 percent from January.

Figures compiled for the Realtors Association are culled from information reported by member real estate agents when they complete the sale of new and existing homes.

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For some local agents, the flattening of local home prices reflects the continued softness in higher-end homes, those selling for about $300,000 to $700,000.

Because a weakened economy made such homes a tougher sell, those owners were forced to lower asking prices. The result: increasing average and median prices have stabilized - for now, anyway.

"That is a softer market," confirmed Sandy Manzanares, production and training director for Merit Co. Inc. of Colorado Springs.

Demand remains strong, however, for the $200,000 to $300,000 homes, since more affordable homes are a better match for many in the area.

"It's where most of us fit," said Don Smith, a broker associate with Keller Williams Clients' Choice Realty in the Springs. "When we win the lottery, we go buy the bigger home."

Based on his experience, the $200,000 to $300,000 homes sell within 30 to 60 days, Smith said.

However, the $300,000 and up homes are on the market much longer, perhaps four to six months, estimated Bill Hurt, president of ERA Shields Real Estate.

If there's a ray of light for the sellers of such homes, it's that the supply of homes available for sale dropped 1.1 percent in February from the same month last year. Lower inventories typically lead to higher prices.

Meanwhile, the number of homes sold in February rose 18.1 percent over a year ago.
 

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Cost of a home in Springs soars in 2001
By Rich Laden/The Gazette

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JANUARY 4, 2002 -- COLORADO SPRINGS Single-family home costs in the Pikes Peak region continued their steady ascent in 2001, soaring to a median price of $173,000 by December.

That figure was 19.3 percent higher than the same time a year ago - and nearly double from December 1993, when the median price stood at $90,800, according to newly released figures from the Pikes Peak Association of Realtors.

The median is the midpoint of all sales - where half of all homes sold in December went for more than $173,000 and the other half sold for less.

Unlike the average home price, the median is less likely to be skewed by a few very high or low sales, and some real estate industry experts consider it a more accurate barometer of housing prices.

Average single-family home prices hit $200,747 locally in December, barely unchanged from the same month a year earlier, said the Realtors association.

However, for all of 2001, average single-family home prices showed a sizeable gain - to $200,544, up 8.5 percent from a full-year average of $184,880 in 2000. At the end of 1993, average prices stood at $111,164.

But whether it's the median or average, don't expect a dramatic drop in prices this year.

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Unless new construction costs fall substantially or the economic slump becomes a collapse, prices this year likely will continue to climb, said Steve Shuttleworth of Fidelity Real Estate and chairman of the Realtors board of directors.

"If there were a military base closure, you could see some serious backsliding on prices," Shuttleworth said.

Otherwise, it would take something such as a drop in construction costs to drive down prices, Shuttleworth said. That's not likely to happen, and Shuttleworth said he expects prices generally to "creep up" this year.

In fact, Shuttleworth said the median price should rise at a slower rate than the average, as people with higher priced homes on the market find they have to lower their prices to sell in tough economic times.

And while rising prices may be bad for buyers, they're good for homeowners and sellers. Rising prices represent an appreciation in property values that many owners depend upon when they move or retire.

Last month also saw an increase in homes on the market; inventories of homes listed for sale rose 20.1 percent from December 2000.

Sales increased by one-third in December over the same time last year. But for all of 2001, the total number of home sales rose just 4.2 percent over 2000.

Home sale data compiled by the Realtors association reflect new and existing homes that sold via real estate agents.
 

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House prices in region set record
By Rich Laden/The Gazette

December 6, 2001 -- Colorado Springs Gas prices are plunging. TVs cost hundreds of dollars less than a few years ago. Hot-selling DVD players are becoming affordable. So is it any cheaper to buy a house these days? Not in Colorado Springs.

The average price of single-family homes in the Pikes Peak region set another record in November, rising to a record $209,708, according to figures released this week by the Pikes Peak Association of Realtors. That's 11.9 percent higher than in November 2000.

The new figure surpasses the previous record of $209,527 set in June. The numbers reflect the combined average price of new homes and resales listed through real estate agents, meaning the vast majority of homes sold locally.

For the first 11 months of 2001, the average price is $200,595, 8.6 percent higher than the same period last year.

Even the median home price is increasing. In November, it climbed to $167,390, 18 percent higher than the same time a year ago. That's not a record; median prices were as high as $172,000 in June. The Realtors association does not list a year-to-date median price.

Some real estate industry experts think the median is a more accurate reflection of the market because it's the midpoint: half of all homes sold in November went for more than $167,390, while the other half sold for less. Average prices, however, can be skewed by a very high or very low sale.

Prices continue to rise possibly because they reflect deals agreed upon when the local economy was stronger months earlier but completed in November, said Steve Shuttleworth, a broker associate with Fidelity Real Estate in the Springs and chairman of the Pikes Peak Association of Realtors' board.

But for now, those price increases seem to defy the laws of supply and demand.

The inventory -- or supply -- of homes listed for sale in November rose 26 percent from the same month a year ago, while the actual number of sales -- reflecting demand -- fell 10.2 percent from the same time last year.

"The hard facts do not subscribe to a typical Econ 101 textbook," said Harry Salzman, owner of Salzman Real Estate Services LTD in the Springs.

Then again, it all depends which homes are for sale and which homes are in demand, Shuttleworth and Salzman said.

Homes priced for $250,000 or less continue to sell well, especially with mortgage rates relatively low, they said.

Yet the market for higher-priced homes -- $300,000 and up -- has softened. With locally announced layoffs totaling more than 4,700 for the year, many potential buyers of pricier homes are on the sidelines, because they're unemployed or fear they will be.

Shuttleworth said homes in the $200,000 neighborhood sell within 45 to 90 days, but higher-end homes potentially could be on the market for as long as a year.

If they don't want their homes to languish, sellers of those $300,000-and-up homes must be prepared to lower their asking price, Salzman said.

Even if sellers take less, it doesn't mean they've lost money. Their homes grew in value by thousands of dollars during the boom of the past several years, Salzman said. Besides, when they go to buy a comparable home, they might pay less than they first thought.
 

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Home prices are on the rise
By Rich Laden/The Gazette

November 9, 2001 -- Colorado Springs Unlike the stock market, single-family home prices seem to know only one direction: up.

Combined prices of resales and newly built homes averaged $205,489 in October in the Pikes Peak region, up 14.5 percent from the same month last year, according to figures compiled by the research arm of the Pikes Peak Association of Realtors.

Even the median price has soared -- to $165,000, a 20.5 percent jump from the same month a year ago. Some industry experts prefer to track the median, which is the midpoint of all individual housing prices. Unlike an average, the median necessarily isn't skewed by a few high- or low-dollar sales.

Something else is up, too: the supply of homes available for sale. The inventory of listed homes increased by 25.6 percent in October from the same time a year ago, while the number of homes that sold declined 6.1 percent, according to the Realtors' association.

But hold on here.

More homes on the market means the supply is up, and fewer homes sold means demand is down. Shouldn't prices be falling too? Shouldn't the market favor buyers?

Well, some prices have fallen, experts say. It depends on what kind of home you're looking to buy.

Some real estate agents say the market has softened for homes $300,000 and up, as those buyers and sellers have been hurt by the slumping economy.

On the buying side, some well-paid, high-tech workers have been laid off and stock investors have seen the value of their stock portfolios plummet. The result: Such potential buyers no longer have the finances to afford their high-priced dream homes.

On the selling side, some of these people might have had to cash out in a hurry because they're taking jobs elsewhere or accepting transfers. In times when demand is down, sellers of such homes might have to settle for several thousand dollars less.

"You can't keep your head in the sand and say the market is like it was," said Gary Beres, managing broker of the Re/Max Properties Inc. office on the Springs' northside. "The houses have to be priced right and they have to be in good condition. ... We are seeing some of those prices adjusted downward."

Not only are some sellers faced with the prospect of settling for less, but they might have to wait longer to find a buyer.

"The sellers have to realize that if it took 30 days to sell (in recent years), it might take 90 days now," Beres said.

But it's still a sellers' market for homes of $200,000 and less, said Steve Shuttleworth of Fidelity Real Estate Inc. in Colorado Springs and new president for the Pikes Peak Association of Realtors' board.

"If it's on the market, it goes relatively quick," Shuttleworth said of such homes.

By the numbers

$205,489: Average combined price of resales and newly built homes in the Pikes Peak region for October, up 14.5 percent from the same month last year.

$165,000: Median price for October, a 20.5 percent jump from a year ago.
25.6 percent: Increase in the supply of homes available for sale in October from the same time a year ago.

6.1 percent: Decline in the number of homes that actually sold in October from last year.

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Home building slows
By Wayne Heilman/The Gazette

October 2, 2001-- COLORADO SPRINGS  Housing construction in El Paso County took a break in September from its record-setting pace as more than 4,000 local layoffs this year and last month's terrorist attacks weakened demand for new houses.

Construction was started locally on 324 new single-family homes in September, down 20.4 percent from a year earlier, the lowest monthly total since February 2000. Yet housing construction so far this year is still up 15.7 percent over the first nine months of last year, to 4,083 homes.

Despite last month's slowdown, new-home construction needs to average only 217 houses per month during the final three months of the year to break a 29-year-old local home-building record.

The main reason housing construction has boomed in the county this year has been consumer demand, fueled by mortgage rates that dropped below 7 percent for the first time in more than three years.

But layoffs have apparently slowed that demand.

"This slowdown is what builders have been expecting in reaction to reduced job growth," said Dave Bamberger, a local economist who follows the housing industry. "But it still looks like there is a good chance that the record will be broken this year."

Employers have eliminated more than 4,000 jobs during the first three quarters of the year, mostly in high-tech industries. That has slowed the county's job growth from a booming 3.1 percent last year to less than 1 percent in August.

Several local builders said Monday customer traffic has dropped since the terrorist attacks. But they also acknowledged that low mortgage rates have helped a greater percentage of those looking for housing to buy a new home.

"Our traffic has dropped since Sept. 11, but not as much as I had thought," said Jeff Smith, chairman and owner of Classic Homes, the county's top home builder. "We are planning on a 20 percent decline in home sales next year, but we could beat that forecast if rates stay low."

Jack Wiepking, president of Master Bilt Homes, said customer traffic and sales have dropped in the past three weeks, but the company has not lost a sale since the attacks and has more than 20 deals that will be completed by year's end.

"Everyone is still thinking of the events of Sept. 11, but we also must remember that the underlying economy is still quite strong," Wiepking said.

Non-residential construction is already well behind last year's record pace. Spending on commercial projects is down 38 percent in the first nine months of the year to $157.2 million, compared with a year ago.

More than half of the decline in non-residential construction has come in the office sector, which has fallen by nearly 50 percent.

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City moves services online
By Ed Sealover/The Gazette

August 1, 2001-- COLORADO SPRINGS  Paying parking tickets can now be done from the comfort of your home. So can buying bus passes.

In fact, city leaders hope interaction with the government got easier Wednesday with the launch of Colorado Springs' new Web site, http://www.springsgov.com.

The site, developed at a cost of $225,000, allows users to take care of many chores online, such as signing up children for recreational activities.

It also provides more information than the city's previous Web site and allows people to ask questions or send comments to officials.

"Providing city services online is no longer just an option," said Charles Doolittle, the city's chief information officer. "It's a requirement to meet the expectations of our citizens."

By scrolling around the site, users can read the latest Police Department news releases, learn about neighborhood services or see how late the new Wilson Ranch Park Pool is open.

Or they can do more than just read. Parking tickets can be paid, bus passes can be bought, and concrete permits can be applied for -- without ever stepping inside City Hall.

Officials hope to put live broadcasts of City Council meetings on the site to join the audio feeds people now get, public communications director Sue Blumberg said.

Users can get information any time something is added to the Web site. For instance, if you want a city job, signing up for the CityWire portion of the site means you'll be e-mailed every time a new job is posted, Blumberg said.

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Springs living costs on rise again
 
By Wayne Heilman/The Gazette

June 18, 2001-- COLORADO SPRINGS  Colorado Springs living costs - compared with the national average - resumed rising at the end of 2000 after falling most of the year.

Local living costs remained just below the national average - 0.1 percent - on Dec. 31, 2000, according to a quarterly survey by the American Chamber of Commerce Researchers Association. Springs living costs were 2.7 percent below the national average on Sept. 30, 2000.

The association's measure of local living costs declined during much of 2000 due to a change in the way the group compiles results from surveys in 308 metropolitan areas. Before the March 2000 change, living costs here were 2.7 percent above the national average.

In March 2000, the association changed the housing prices it surveys to a 2,400-square-foot home from the 1,800-square-foot home it had been using. Despite using a larger home, housing prices in the local survey fell because of adjustments the group made.

Still, local housing prices were 5.5 percent above the national average at year-end, compared with just 3.3 percent above the average three months earlier. Before the change, local housing prices had been 17.7 percent above the national average.

The biggest change in local prices during the last quarter of 2000 was due to a jump in utility costs to 83.8 percent of the national average at the end of 2000 from 74.4 percent of the average three months earlier. Colorado Springs Utilities increased natural gas rates 30 percent last October.

That component likely will fuel further living-cost increases as a result of a 15 percent natural gas rate hike in January and a 24.6 percent increase in electric rates in April, both resulting from the rising energy costs including skyrocketing wholesale power rates.

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Celebrating our success ~ Springs gets more, better jobs

By Rich Laden/The Gazette

June 14, 2001 -- COLORADO SPRINGS Statistics can be as dry as the Colorado air.

But in measuring the effectiveness of three decades of economic development efforts in the Pikes Peak region, there's one number that's tough to ignore.

When Colorado Springs business leaders launched an effort to attract new employers to the area in 1971, roughly seven out of every 10 primary jobs in the region - those that help pump money into the local economy - were tied to the military and defense contractors.

Today, that same figure has shriveled to fewer than four in 10.

"The original goals were to diversify and broaden the economic base of the community so we were not so dependent on the federal government," said Steve Schuck, one of three local developers who founded the effort to diversify the Springs' economy and raise its standard of living.

Now, on the 30th anniversary of that effort, local business leaders believe they've accomplished those goals. And they're celebrating - in style.

The Greater Colorado Springs Economic Development Corp., the private, nonprofit agency that grew out of those early efforts, will host a Friday bash at The Broadmoor hotel's International Center. The Gazette, developer La Plata Investments, Van Gilder Insurance Corp. and several banks are among the sponsors.

Springs gets more, better jobs

What business leaders will celebrate are the big names that have come to Colorado Springs, helping to put the Pikes Peak region on the map as a place to do business: telecommunications behemoth MCI (now WorldCom), chip maker Intel Corp., financial services giant T. Rowe Price, software designer Oracle Corp. and the Focus on the Family Christian ministry, to name a few.

They all came just in the past decade, joining Hewlett-Packard, Federal Express and many other longtime corporate citizens, smaller businesses and local startups.

Nonmilitary jobs now total about 250,000 - including 33,000 primary jobs created during the last 10 years alone, according to the Colorado Department of Labor and Employment.

"Each year, we lose on the order of 1,500 to 2,000 jobs, which must be replaced in order to keep the economy strong," said Tom Zwirlein, associate professor of finance at the University of Colorado at Colorado Springs. "This year (job losses) will be worse. Without the EDC, who would work for the community to replace those jobs?"

In fact, the EDC has its work cut out for it this year. Roughly 2,200 local layoffs have been announced or reported so far this year, more than during all of last year. By comparison, relatively few new job announcements have been made.

But even as it has helped woo employers, some EDC detractors would argue not all the jobs that came to Colorado Springs during the booming 1990s were ones the community necessarily needed or wanted.

When a flurry of telemarketing operations came to the Springs in the late 1990s, some critics wondered if the agency was aiming too low in its job recruitment efforts.

Even the EDC acknowledges it still has far to go when it comes to attracting businesses that provide so-called liveable-wage jobs. However, the agency adds, average salaries for companies it helped recruit to the area rose to $48,799 in 2000 from $23,608 in 1991, based on information it has received from those companies.

Robert Scott, the EDC's longtime president, said the agency continues to work toward improving the pool of jobs. Then again, he adds, it's important for the community to have jobs for all skill levels.

"There are people who have different levels of ability," he said. "I don't think there ever was the expectation, the realistic expectation, that everybody would be earning $50,000."

Another complaint: the EDC's efforts to bring new business have been the root cause of the area's growth problems - more people, more cars, more traffic.

Jan Doran, president of the Council of Neighbors and Organizations, said nobody wants to return to the late 1980s and early '90s, when layoffs, vacant office buildings and empty homes were signs of a local economy in the dumps. And, she said, more jobs and more businesses have helped pump up homeowner property values.

Still, she said, rampant growth continues to spawn fears that portions of neighborhoods eventually will be wiped out to make way for the roads needed to accommodate increased traffic.

Homeowners, she said, "would like to be assured that their neighborhoods will stay intact."

A measure of success

Schuck and Zwirlein, however, say the EDC can't be blamed for the community's failure to keep up with the need for new and upgraded roads.

"The growth problem was created when the growth and expansion came, and then no one was willing to do anything about it," Zwirlein said. "A not-in-my-backyard mentality, combined with no new taxes to support the growth did not mix well with the thousands of new people moving into the area. We as a community can collectively take the blame for poor growth management."

And despite the headaches that growth has caused, new job opportunities have benefited the community, Schuck said.

"We no longer are a community that rolls up on Labor Day and reopens on Memorial Day," he said. "We are no longer captive to the vagaries in the military and the funding of military activity. We now have a full-scale university and a quality of life that is the envy of most people.

"And most importantly, our children can find job opportunities in our community and can stay. Until economic development started to take root, this community exported its most valuable resource - our children."

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Property values jump 23 percent

By Pam Zubeck/The Gazette

March 27, 2001 -- COLORADO SPRINGS All types of property in El Paso County - land, homes, commercial and industrial buildings - have gone up in value roughly 23 percent on average, under the county's most recent reappraisal.

The average increase is on par with other Front Range counties and sharply higher than previous reappraisals. Property went up by 17 percent in 1994, 18 percent in 1996 and 14 percent in 1998.

The reappraisal, required every two years by law, covered the period from Jan. 1, 1999 to June 30, 2000. New values will be used to compute 2001 taxes.

County Assessor John Bass said the highest increase was 32 percent for vacant land on the county's eastern plains while the lowest was 15 percent in the Knob Hill region, an established neighborhood in central Colorado Springs.

A value hike doesn't automatically translate to a proportionately higher tax bill.  But properties with the highest value increases will see the biggest jumps in their tax bills. It's impossible to know how values will affect taxes right now because two crucial pieces of the formula aren't yet known.

One involves a state law that requires homeowners to pay 45 percent of the statewide total property tax. That rate won't be set for months. Businesses and other classes of taxpayers pay the remaining 55 percent.

The other unknown: Property tax rates for various taxing districts won't be set until December.

Still, some county residents face higher tax bills because residents voted to freeze property tax rates at their current levels in Colorado Springs School District 11 and Harrison District 2. That means districts won't lower their tax rates in order to avoid generating too much money under state constitutional revenue caps.

The state's constitution will prevent other taxing agencies, such as the city and county, from collecting windfalls because of rising values.

The biggest jumps locally occurred in the upscale Broadmoor area, with a 31 percent rise, and in areas considered low-end, such as Cimarron Hills and central Pikes Peak Park, both of which averaged 29 percent.

"You can buy 1,200- to 1,500-square-foot homes for less than $150,000 (in those areas), and they're among the few areas left in town where you can do that," Bass said.

The increase in property values rivals those elsewhere in the state. Bass quoted assessors as reporting a 25 percent increase in Douglas County and 23 percent in Elbert and Arapahoe counties.

Notices with new values will be mailed May 1. The values won't be available on the assessor's Web site - www.elpasoco.com/assessor - until about April 15.

El Paso County property value increases

Property values soared in El Paso County from Jan. 1, 1999, to June 30, 2000, the reappraisal time. Increases in residential values by area, working from south to north: 

Countryside, 18%
Little Ranches, 17%
City of Fountain and surrounding areas, 19%
Widefield, 20%
Security, Fountain Valley, Bradley Ranch areas, 19%
Stratmoor Valley, 16%
Cheyenne Meadows, M.J. Brock, Crosstrail areas, 20%
Skyway, west of Cresta Road, 18%
Skyway, east of Cresta, 26%
Cheyenne Canyon area, 22%
Dorchester/Ivywild, 16%
South end of downtown and mixed use areas, 16%
Pikes Peak Park, 29%
Horizon, Southborough, Bellehaven & Heritage, 23%
Gateway, Villages at Sand Creek, Aero Estates, 24%
Eastcrest and Eastborough, 19%
Park Hill, Platte Acres, 23%
Valley Hi, Western Sun, 20%
Eastlake, Prospect Park, 19%
Westside Subdivisions, 27%
Crystal Hills, Crystal Park, 19%

Westmoor, Indian Heights, Pleasant Valley, Old Colorado City, 21%

Manitou Springs, 24%
Green Mountain Falls, 19%
Old North End, 20%
Immediately east of downtown, 19%
Knob Hill, 15%
Kissing Camels area, 19%
Holland Park, 18%
Pinecliff, Sunbird, Pinon Mesa, 20%
Oak Valley, Pinon Valley, Pinon Bluffs, 18%
Rockrimmon subs, Woodstone, Woodmen Valley, Peregrine +20%
Garden Valley, Garden Ranch, 17%
Yorkshire, Erindale, Pulpit Rock, 18%

Rustic Hills, Villa Loma, Crestview, Austin Estates, Highland Park, Summernight and Northglen, 18%

Park Vista, Old Farm, Turquoise, Colorado Country, Homestead, Saddleback, 17%

Vista Grande, 16%
Maizeland, Maizeland Moors, 19%
Constitution Hills, Stetson Hills, Springs Ranch, 23%
Cimarron Hills, 29%
Falcon Estates, Thunderbird, Brookwood and Pine Creek, 19%

Woodland Hills, Cottonwood, Sierra Ridge, Dakota Ridge, Canyon View Sunset Mesa and Antelope Creek, 20%

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Intel Installed 

By Chris Walsh/The Gazette 

MARCH 11, 2001-COLORADO SPRINGS  In less than two weeks, one of the most prestigious, influential technology companies in the world will set up shop in Colorado Springs. 

The gas stations, restaurants and other businesses crowding Garden of the Gods Road will see an even-greater influx of well-paid, tech-savvy clientele. And the Springs will become a bit more prominent on the high-tech map, finally able to brag that it has "Intel Inside." 

Intel Corp., the $34 billion Santa Clara, Calif.-based chipmaker, will begin testing equipment in part of its $1.5 billion manufacturing plant at 1575 Garden of the Gods Road next week - officially opening the plant. 

Although the event will be low-key - the "grand opening" will come in several months, when the company actually begins producing chips - the move to begin testing equipment is significant. 

For Intel, it is a celebration of speed. Despite several setbacks, the company will have managed to get its 500,000-square-foot Colorado Springs plant, which was built in 1996 but never occupied by Rockwell International Corp., up and running in just over a year. That's faster than any of the seven Intel plants that use the same technology to make chips. Typically, it takes Intel 18 to 24 months to get a plant operational. 

For the city, the opening of the plant parlays into prestige and profit. Colorado Springs will gain recognition as a high-tech hub, and Intel will be pumping millions of dollars into the local economy in taxes, payroll and purchases. 

In a time when the world's largest chipmakers are cutting costs and reigning in expansion, Intel's move to begin testing equipment solidifies its presence in Colorado Springs. 

"This is definitely a clear demonstration that we are committed to this neighborhood and to this community," said Intel spokeswoman Deanna Sauceda. "We have invested a lot of time and energy in this." 

Testing is the first phase 

The "soft" opening of Intel's plant pushes the company a giant step closer to meeting its No. 1 goal in Colorado Springs: manufacture semiconductors. 

During pre-production, Intel will actually begin "running" materials - silicon wafers, chemicals, etc. - on equipment so "we will know, when we begin production, that all the equipment is functioning and the technicians are fully trained," Sauceda said. 

Intel expects to begin making flash chips at its Springs plant in several months. The chips will end up in a variety of electronic devices, including cell phones, MP3 music players, digital cameras and personal digital assistants. 

Despite an overall slowdown in the semiconductor industry, flash chips remain one of the hottest products in the technology-fueled economy. The chips - no bigger than a postage stamp - remember information when the power is switched off. They cost anywhere from $2 for a low-end chip to $40 for a souped-up version. 

Sales of flash chips grew by more than 130 percent last year to $10.6 billion, and they are expected to grow by 60 percent this year. 

Although Intel is the world's largest maker of microprocessors - the chips that serve as the "brains" of computers - the company saw record growth in its flash-chip sales last year. In May, Intel announced it sold its 1 billionth flash chip, a feat that took 12 years. 

At its Springs plant, Intel initially will manufacture flash chips in one of two 60,000-square-foot "clean rooms," sterile environments where semiconductors are actually made from thin wafers of silicon. 

The company had planned to begin testing equipment in the first clean room in November but pushed the date to March because of a shortage of construction workers and several unanticipated delays. 

In February, Intel halted construction on its second 60,000-square-foot clean room in the plant. Officials want to consider whether the company should manufacture a more advanced chip than originally planned. No date has been set for the opening of the second clean room. 

The other areas of Intel's local plant will support the clean rooms. The space above the clean room, for instance, cleans and circulates the air. It's crucial to keep the clean rooms sterile. Particles as small as a piece of dust can ruin an entire silicon wafer. 

Site covers 61 acres 

Aside from the manufacturing plant, Intel has several support buildings, a three-story office building and a 1,060-space parking garage on its 61-acre site. 

Construction on the office building, where administrative staff will work, will be complete next month. Intel's administrative staff will begin moving from temporary offices on Mark Dabling Boulevard to the Garden of the Gods site this month. Landscaping around the site will be complete by the end of June. 

The site will include several amenities for employees such as a full-service cafeteria, a workout facility and, in several months, an outdoor basketball court. 

Intel has hired 1,150 engineers, technicians, administrative staff and other professionals to work at the plant. Many of those have been training or are already working at the site. The employees who manufacture chips in the clean room make an average of $35,000 to $45,000 annually. 

Those are the workers that businesses along the Garden of the Gods corridor want to get - and already are getting - a hold of, by the wallet. 

Elaine Chavanon, owner of Marigold Cafe at 4605 Centennial Blvd., less than a mile from Intel's plant, has already seen business increase because of Intel. 

Intel's employees spend several thousand dollars a month at Marigold, Chavanon said. Intel even has a "house account" at the restaurant. 

As Intel increases its local operations, Chavanon expects to see her business grow even more. 

"They're educated, good spenders and good tippers," she said. 

Intel's presence in the Springs is also good for the more than 60 local semiconductor support companies, which provide everything from chemicals and test equipment to such services as repairing equipment and installing piping.

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Military Fuels Springs
Pentagon's share of local economy is slowly shrinking

By John Diedrich/The Gazette

MARCH 8, 2001- COLORADO SPRINGS  The military pumped $2.47 billion into the Colorado Springs economy in 2000, continuing its role as the region's leading economic heavyweight, according to figures released by the bases this week.

For the first time, Fort Carson - the largest of five military installations and the top employer in the county - contributed more than $1 billion to the economy here.

The military's impact, measured from Oct. 1, 1999, to Sept. 30, 2000, was about $184 million higher than it was in the preceding 12 months. The figure includes payroll, contracts and services and other dollars spent by the military and its employees in the community.

The five bases had 41,901 employees - 30,093 active-duty and reserve troops and 11,808 civilian employees - as of Sept. 30, 2000, which is about 300 fewer than the year before. The drop was the result of minor staffing changes but didn't seem to indicate a larger trend.

The latest figures also continue a recent development: The military's impact on the overall economy is shrinking as other business sectors boom, according to local economist Dave Bamberger.

Bamberger estimates military-related jobs - those working for the Department of Defense and for defense contractors - accounted for 37 percent of "primary jobs" that bring money into the region. In 1998, the military's share was 38 percent, and the year before it was 39 percent.

"Primary jobs" include factory workers, exporters and contractors and are distinguished from "secondary jobs," which include such occupations as restaurant workers, accountants and others.

Despite the surge by other sectors, Bamberger said defense continues to be the single largest employment sector in the area, followed by tourism at 12 percent, electronic equipment manufacturing at 11 percent and software development at 9 percent.

In the early 1970s, the economy was much more dependent on the military, which then accounted for about 70 percent of local jobs, Bamberger said. Local leaders called for diversification, looking to attract high-tech jobs, the sports industry and nonprofit organizations, Bamberger said. With a better mix , Bamberger expects the newer sectors to continue growing faster than the military.

But if the economy turns sour here as it is starting to do elsewhere in the country, the military could help, said Robert Scott, president of the Greater Colorado Springs Economic Development Corp.

"If the non-defense economy tanks, we have a cushion," he said.

Scott noted that while the bases are lumped together as "military," their missions vary, which protects the area if one has funding cut by Congress.

It appears the Bush Administration does not intend to make cuts and, in fact, the Springs could see a windfall if National Missile Defense becomes a reality.

NMD is a system intended to guard against a nuclear missile attack on the United States. Testing has shown mixed results but the president has said he is committed to developing a system. Officials have said the program would likely be headquartered in Colorado Springs.

Among the bases in town, Fort Carson had the largest single impact in fiscal year 2000, generating $1.06 billion for the economy, including military and civilian pay, construction, goods purchased and jobs created. Fort Carson's impact jumped by $82 million from the previous year.

Fort Carson's impact will grow even more in the next few years as a private company remodels all 1,823 houses on the post and builds 840 new ones, spending more than $200 million.

The other bases in town have been engaged in major construction projects - the Air Force Academy is remodeling many of its 40-year-old buildings; Peterson Air Force Base is building a roughly $60 million Space Command headquarters; Schriever Air Force Base recently completed an administration building and is working on other projects; and Cheyenne Mountain is slated for a complete computer makeover costing up to $1.5 billion.

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Bullish on Springs -- Real Estate Going Strong
By Rich Laden
The Gazette

JANUARY 13, 2001-COLORADO SPRINGS Colorado Springs' commercial real estate market is looking up, although community concerns and national economic forces such as sagging consumer confidence could temper that success.

That message was delivered Tuesday by four local real estate and economic experts to about 300 people at the Antlers Adam's Mark Hotel.

Themes at the 10th annual economic forecast breakfast of the Institute of Real Estate Management's southern Colorado chapter touched on what makes the Springs' commercial and residential markets strong against opposing national economic trends.

"This is an amazing apartment market. This market is nuts. It's unbelievable. It's crazy!" said Doug Carter, a Springs apartment broker and an 18-year veteran of the local multi-family housing market.

New jobs bringing new people to town have created a huge demand for apartments, Carter said.

Even so, with few prime sites available to build on, and rising construction costs, supply is increasing by only about 1,000 apartments a year. In the mid-1980s, roughly 8,000 units were being added annually, he said.

The result: vacancy rates are less than 3 percent; average rents have soared to about $670 a month. For newer complexes, rents are even higher, averaging nearly $1,000 for units built since 1990. And the average sale price of apartment buildings has topped $80,000 per unit for newer complexes, Carter said.

"This is the perfect market," he said. "OK, nothing's perfect. I will say that this is one of the strongest and one of the most desired apartment markets in the nation."

Jim Spittler, a founder of commercial brokerage NAI Highland Commercial Group LLC in the Springs, said 2001 will be be another strong year for commercial real estate, although not quite as good as last year.

As with apartments, available commercial space is in high demand. Vacancy rates for offices, shopping centers and industrial buildings have plummeted to single digits from about 20 percent a decade ago, Spittler said, while rents have risen substantially.

Successes are everywhere, Spittler said, including a new FedEx Corp. office building planned on the city's north- side and the expansion of the Atmel Corp. chip-making operation on the southside.

But of all the companies making an impact, the arrival of Intel Corp., the world's No. 1 semiconductor manufacturer and a Fortune 50 company, will be perhaps the biggest economic driver for the community, Spittler said.

Intel is rehabilitating the vacant Rockwell International Corp. plant on Garden of the Gods Road and is considering the purchase of 300 acres on the city's southeast side for a second factory. More jobs and a billion-dollar investment are just part of what Intel is bringing, Spittler said.

"Intel has the potential to be the single most significant thing that's ever happened in Colorado Springs probably since the military came (after) World War II," Spittler said.

Yet, caution flags also were waved.

The city has improved its road system, such as the work now being done to extend Powers Boulevard on the city's eastside. But, Spittler added, "How in the world do we go east and west?"

Also, acting locally but thinking nationally, city economist Mike Anderson, another speaker, said it's uncertain whether the national economy is merely slowing down or entering a slump.

In any case, higher energy prices, declining consumer confidence and labor shortages are among the factors that could affect the Springs, he said.

Anderson predicted continued job local growth in 2001, although at a slower pace than years past, unemployment of 3.3 percent and a slight increase in city sales tax revenues.

At a national level, Anderson said, the California electricity crisis actually could help the Springs. High-tech firms might look to relocate to Colorado as they get fed up with California's higher rates and power 
shortages. Another possible plus, directly on the real estate front: falling mortgage rates, locally and nationwide.

Robert Scott, president of the Greater Colorado Springs Economic Development Corp. and another speaker at the breakfast, said the city's quality of life stands out. But Scott said the city must maintain that quality of life if it wants to keep employers' interest.

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Springs is Fastest-Growing U.S. City for High-Tech Jobs

By Jeff Smith
Denver Rocky Mountain News Staff Writer

December 5, 2000 -- Colorado Springs is the country's fastest-growing city in terms of high-tech employment and Boulder ranks second in concentration of high-tech workers, according to a national study to be released today.

The "Cybercities" study by the American Electronics Association and Nasdaq stock market found that Boulder, Colorado Springs and Denver have posted strong high-tech employment growth in the past seven years.

The study also found that Colorado residents are strong users of technology. Colorado Springs, in fact, ranked as the second most "tech savvy" city, with 76 percent of its households having a computer and 65 percent having Internet access as of August. San Jose, Calif., ranked first.

"In part, this recordbreaking growth is the result of venture capital investments in this region," said Tom Edman, chief executive officer of Applied Firms in Longmont and chairman of AEA's Mountain States Council. "Venture capitalists know a good location when they see it."

The Cybercities report ranked 60 metropolitan areas using such data as employment, wages, number of high-tech businesses and payroll. The study also looked at venture capital investment, proximity to universities and quality of life. The AEA previously had produced Cybernation, Cyberstates and CyberEducation reports.

John J. Hansen, the new president and chief executive officer of the Colorado Institute of Technology, Gov. Bill Owens' flagship initiative to make Colorado a high-tech hub, called the Cybercities report a validation that the institute's work is critical.

"It's great news," Hansen said of the study. "But the flip side is 'How are we going to sustain this growth?"' He said that the chronic shortage of technology-trained workers remains the No. 1issue facing companies.

Home-grown software developers especially are needed, Hansen said, "although
if you talk to Intel, they're just crying for manufacturing technicians for their new plant in Colorado Springs."

The study reports that Denver companies received $1.4 billion in venture capital in 1999, ranking ninth nationally, and Boulder companies received $652 million.

Some of the high rankings:

Boulder ranked second nationally in high-tech worker concentration, with high-tech firms employing 201 of every 1,000 private sector workers.

Boulder ranked 12th with average high-tech wages of $63,600 a year, 66 percent more than Boulder's average private sector wage.

Colorado Springs is the fastest-growing cybercity, with a 77 percent growth in high-tech jobs between 1993-98 (an increase of 11,000 jobs).

Colorado Springs ranked seventh nationally with 137 high-tech workers for every 1,000 private-sector workers.

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Springs Economy on a Roll
By Erin Emery
Denver Post Southern Colorado Bureau

Oct. 19, 2000 - COLORADO SPRINGS - The forecast for the Colorado Springs economy in 2001 is pretty much the same as it has been for the past decade: sunny and bright.

That's the bottom line of a study conducted by two professors at the University of Colorado at Colorado Springs. Professors Jeff Ferguson and Tom Zwirlein recently sent more than 2,500 surveys to area businesses to find out what's going on.

They found optimism. Of the 250 businesses that responded to the survey, 83 percent indicated that their performance exceeded expectations in 2000, and 82 percent expect that 2001 will be even better than 2000. The professors presented their report Wednesday at the 4th Annual Southern Colorado
Economic Forum at the Antler's Adam's Mark Hotel.

The reasons for economic optimism are clear: There were 4.3 percent more jobs in 1999 than there were the previous year, and those jobs paid more - an annual average of $30,676, also a 4.3 percent increase over the previous year. In addition, housing starts were on the rise: 4,587 single family and townhome building permits were issued in 1999, an 8.9 percent increase over 1998.

"In some ways, it's a little bit of a boring story," Zwirlein said. "Of the last three years, we've been telling pretty much the same story."

The forecast for 2001, the professors say, is for more growth, although it will probably not be at the explosive rate that it has been in the past few years. And they recognize there is some anxiousness concerning the volatile stock market, rising oil prices and unrest in the Middle East. That nervousness could affect consumer spending, which could affect retail and durable goods sectors.

"They're worried about uncertainty," Zwirlein said. "And not only are there some economic factors right now that are causing uncertainty, like the stock market and oil prices going up, but I think there's a lot of uncertainty about some of the ballot issues.

"How will these ballot issues affect our economy? How will they affect the growth that we've experienced in Colorado? How will they affect the educational system? How will they affect congestion? I just don't believe,
quite frankly, that if we have an anti-growth measure (Amendment 24) that it's going to stop growth. . . . At least half of the population increase these days - at least half - is caused by births over deaths," Zwirlein
said.

One of the biggest jolts to the Colorado-Springs-area economy is the opening later this year of an Intel plant on Garden of the Gods Road. The plant will employ 1,000 people to make flash memory chips. The computer chipmaker also may open a second site, employing as many as 2,500 people.

"I think it's going to have a really big impact," said Ferguson. "I think it is really going to round out the high-tech cluster. We have Hewlett-Packard and Agilent Technologies here, and Atmel and MCI, Compaq. It really makes us a player. It's also a huge project, not only in terms of the number of workers they're going to need, but in the secondary market, in retail and support services."

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