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Intel will create hundreds of jobs $400 million expansion being done in phases By PAUL BEEBE THE GAZETTE
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.
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
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
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.
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
May
11, 2003 -- On Memorial Day weekend a year ago, Bruce Larsen put a for-sale
sign on his five-bedroom, three-bathroom rancher on Colorado Springs’ east side.
A year later, the sign’s still there. Larsen first asked $428,000 for his
4,000-square-foot home, which sports a new deck, appliances and countertops.
No takers. Then, he cut the price to $419,000. Still unsold. Recently, he
trimmed another $10,000 off his asking price. A buyer is interested but can’t
complete the purchase unless she sells her house — a sale dependent on another
homeowner down the line unloading property. "I’m impatient," said Larsen, a
financial planner who, with his wife, Annette, has lived in the home since 1984.
"I’m trying not to be impatient."
COST CUTS:
Many Colorado Springs homeowners
are cutting their asking prices, hoping
to spark buyers’ interest.
Patience
isn’t just a virtue in today’s real estate market. It’s a necessity. A few years
ago, the singlefamily housing market in the Colorado Springs area moved with the
speed of a high-powered nail gun. Today, it’s a hammer — still moving but much
slower. As the buying, selling and building season heats up in the late spring
and summer, a home glut is forcing sellers to wait weeks and months to dispose
of their property. A weak local economy means reduced demand for new homes. And
those same market conditions mean home values don’t rise quite as quickly as in
the past. Nobody suggests the singlefamily housing market is collapsing.
Thousands of existing homes will be bought and sold this year, and thousands of
new ones will be built, real estate experts and economists say. But the market
isn’t as strong as it was a few years ago, and the effects can be felt
throughout the community by way of slow sales, fewer homes under construction
and lost sales tax revenue on the part of local governments...
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data on the fastest growing areas in Colorado Springs!
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Springs adds jobs for fourth month.
Troop movement could stall growth
By PAUL BEEBE THE GAZETTE
"It’s not a stellar performance, but compared to negative growth, it’s pretty good," said David Bamberger of David Bamberger & Associates, a Colorado Springs economic research and consulting company. Job growth is a key measure of the economy. Yearover-year employment numbers have been inching higher since November, reversing 15 months of declines that began in August 2001. Bamberger said it’s too early to declare the city’s recession over. Other growth needs to occur, notably in sales tax revenues, new vehicle sales and housing construction. The unemployment rate of 6.1 percent, down from 6.4 percent in January and 6.6 percent in February 2002, must fall further, he said.
"So we’re not out of the woods yet, but we are certainly starting to see some positive signs, especially with job growth," Bamberger said. Accounting for employment increases and decreases in various industries, there were 1,200 more people employed in the Springs during the 12 months ended Feb. 28 than a year earlier. The number of private-sector jobs declined by 300, while government jobs increased by 1,500. Virtually all of the public-sector jobs created in February were in education. "That we grew 1,200 jobs is very good," said Fred Crowley, an economist with the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs. "But, unfortunately, most of those jobs are in the government sector . . . and it’s not really demonstrating growth in the economy as much as the demand for central services being delivered," Crowley said.
Private-sector employment stood at 196,400 jobs in February. That’s down almost 7 percent from its peak of 210,700 jobs in June 2001, according to the state Labor and Employment Department. By contrast, government employment reached 41,500 in February, the highest level in at least two years. Crowley said local unemployment could increase as the effect of sending thousands of Fort Carson soldiers to the Middle East works through the economy. As many as 2,000 civilian jobs could be lost, he said. On the other hand, a business conditions index devised by Crowley suggests the Springs economy might be bottoming out. "My bottom line is things may be about at their worst," he said. "However, current uncertainties . . . will most likely keep our economy from recovering until at least the third quarter and perhaps early fourth quarter of this year."
Across Colorado, the seasonally adjusted unemployment rate was 5.5 percent in February, unchanged from the previous month. A year earlier, the jobless rate was 5.7 percent. The national unemployment rate rose 0.1 percentage point to 5.8 percent.
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
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.
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.
Feel free to visit our Just for Military Section on our web site for more information!
|
|
October 6, 2002 -- A weak economy has slowed population growth in El Paso County and statewide, according to the latest forecasts from state officials. Population growth in El Paso County from July 1, 2001, to July 1, 2002, likely will be the slowest since 1996. A weak economy has slowed population growth in El Paso County and statewide, according to the latest forecasts from state officials. Population growth in El Paso County from July 1, 2001, to July 1, 2002, likely will be the slowest since 1996. That’s because the number of people moving into the county during the period will fall to less than half the level it reached during the previous year. Officials fear the slowing population growth will hurt the Springs housing market. The state’s population growth for the same period likely will be the slowest in more than a decade, mostly because fewer people are moving to the state as Colorado’s job market cools, said Jim Westkott, director of the Colorado Demography Section. "As job losses have continued throughout the past year, they have affected population growth," Westkott said. "The Colorado economy suffers both from the slowdown in the national economy as well as the downturn in telecommunications." Westkott’s office revises state population forecasts quarterly and county forecasts annually. Population estimates for the county and state for the July 1, 2001, to July 1, 2002, period won’t be completed until next spring because birth, death and school enrollment records won’t be available until then. Westkott expects population to slow even further in the year that will end July 1, 2003, as the flow of new arrivals becomes a trickle. "Population growth could slow even a bit more. The risks to the economy are still on the downside," Westkott said. "While Colorado grew at more than twice the national average throughout the 1990s, I don’t expect a return to that soon." Reduced population growth will put the brakes on an already slowing local housing market that relies heavily on new arrivals to fuel sales, economists and industry officials say. That likely will mean construction of fewer new homes and declining resale prices. "There is certainly a strong relationship between in-migration and housing starts, but there usually is about a one-year lag for a new person to trigger construction," said David Bamberger of Bamberger & Associates, a Colorado Springs economic research and consulting firm. While the slowing influx of newcomers will hurt the Springs housing market, a collapse similar to the industry’s meltdown during the late 1980s is not expected. Most economists expect construction to fall about 20 percent from this year’s level. "I am not expecting anything like the county experienced during the late 1980s. The local economy still has substantial underlying strength," said Fred Crowley of the Southern Colorado Economic Forum at the University of Colorado at Colorado Springs. Yet the county’s economy remains in a recession that began a year ago and has pushed the local unemployment rate to an average of 6.2 percent this year. Employers have cut 7,300 jobs since January 2001, while just 1,100 new jobs have been announced since then. Jobs have been the magnet that has drawn people to Colorado and El Paso County. Declining employment in the county and statewide prompted Westkott’s office to reduce its estimates of the number of people who will move here. The state projects that a 60 percent drop in net migration — the number of new arrivals minus the total of those leaving — to 24,909 occurred in the year that ended July 1. That would be the lowest annual total since 12,584 more people left the state than arrived in 1990. The decline is similar for El Paso County: Net migration for the year that ended July 1 is believed to have fallen 55.8 percent to 3,506 people. That would be the smallest yearly total since 1996, when an earlier round of high-tech layoffs trimmed net migration to just 2,231. Besides people moving here, births continued to outnumber deaths, adding about 5,300 to the county’s population and 40,000 to the state’s population. The county and state populations grew at about a 1.5 percent rate through July 1, according to estimates. Population growth has been the engine for El Paso County’s housing market for decades. Strong population growth fueled a housing boom in the 1990s, while weak population growth amid a recession contributed to a housing market slump during the late 1980s. Despite a sluggish economy, the local housing market has been propped up by the lowest mortgage rates in more than 35 years. Housing construction is down just 15 percent from last year’s record pace for the first three quarters of the year. However, construction is beginning to slow and the inventory of resale homes on the market was at a 12-year high in September. And mortgage foreclosures this year are nearing an 11-year high, meaning a high number of homes are being put back on the market. Tom Taylor, president of the Housing and Building Association of Colorado Springs, said most builders he has surveyed in recent weeks have told him they plan to cut their output by 15 percent to 25 percent next year due to slowing demand for new houses. Stuart Scott, president of Stuart Scott Ltd., a local real estate agency, said he expects slowing population growth to hit the local apartment market the hardest. Apartment vacancies more than doubled to 8.4 percent in March before falling to 7.2 percent in June. "We are now back to a normal, healthy market compared with the best year in Colorado Springs´ history," Scott said. "Instead of having just four buyers chasing three homes and willing to pay more than the asking price, you have three buyers looking at 10 homes." |
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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
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 - con