Yampa Valley data indicate improving economy

Report: Number of jobs, size of workforce becoming balanced

Advertisement

— The number of jobs and the size of the workforce in Routt County are becoming balanced, a possible indication that the local economy is improving.

According to the Yampa Valley Data Partners’ Fast Facts report for August, the economic stress indicator because of unemployment for Routt County increased to 0.006 in July, up from -0.004 in June. July represented the first month since December 2007 that the economic stress indicators for Routt and Moffat counties were positive numbers.

“We had more jobs than people for as long as we’ve been tracking this until the last month,” said Kate Nowak, executive director of Yampa Valley Data Partners, which disseminates local demographic information from data sets such as the U.S. census. “In July, we saw a slight increase. It seems to be balancing out some, and that’s a good thing.”

Nowak added that the economic stress indicator ideally would be close to zero, which would indicate there are enough people to fill the available jobs.

Scott Ford, a consultant for Yampa Valley Data Partners who helped compile the data, said Fast Facts answers the question, “How is the economy doing?” in Routt and Moffat counties based on 50 indicators. He said economic stress is a strong indicator to answer that question.

“Looking at 20 years of data, this does a really good job forecasting when we’re going into a decline and when we’re coming out of a decline,” he said. Ford added that the economic stress indicator decreased before the recession began.

Other indicators in Fast Facts, which was released last week, examine employment, income levels, construction and real estate activity, retail sales and energy production.

In addition to economic stress indicating recovery, Nowak said the county’s foreclosure ratio of 1 in 621 housing units receiving a foreclosure notice in July has improved. The ratio was 1 in 437 in May and June. The county’s July figure also was better than the national average for that month, which was 1 in 611.

The foreclosure ratio in Routt County was 1 in 346 in January.

Ford said that he thought it was a little too early to say whether the local real estate market hit bottom but that he thinks it’s starting to level out.

— To reach Jack Weinstein, call 970-871-4203 or email jweinstein@SteamboatToday.com

Comments

Scott Wedel 2 years, 11 months ago

The critical context of these indicators is that they indicate a very modest improvement from prior months. So things are slightly better than it was a few months ago which is good news, but it still means we are a very long ways from where we were a few years ago.

0

rhys jones 2 years, 11 months ago

It's the local version of Global Warming. Or maybe Steamboat will lead the nation to recovery.

0

Scott Ford 2 years, 11 months ago

One of the many challenges we have when discussing the local/regional economy is how to define recovery. If "recovery" is defined as a return to the high point of a previous period we are not in a recovery. The local/regional economy across most measurements is below where it was in 2007. If the criteria are a return to the high points of the past, there are some segments in our economy that recovery is likely years if not decades away. Here is some comparative highlights'

Change in the unemployment rate 2007 to 2010 /Increased 6.8% Number of Jobs 2007 compared to 2010 / Down 15% Number of Business Establishments 2007 to 2010 / Down 8% Residential Construction permits 2007 compared to 2010 / Down 95% Median Home Listing Price Oct-2008 compared to Jul -2011 / Down 31% Gross Retail Sales FY2007 compared to FY2010 / Down 17% Personal Income 2007 to 2009 (essentially unchanged) 2007=$1,163,208,000 2009 = $1,153,252,000 Number of Households 2007 to 2010 / Increased 6%

If, however, recovery is defined as a change in the velocity and the direction of several local economic indicators Yampa Valley Data Partners monitors in Fast Facts, there is improvement. Are we at the bottom? It is getting better? Yes, in most areas regarding direction and velocity, but not all areas. If recovery is only defined as a time where we return to previous highs - to get back to an unemployment rate of 2.6% may never happen or be a very long wait.

Is the local/regional economy recovering? I think yes if compared to 12 months ago or 2 years ago. Compared to 2007? No, but that time can best be described as "dancing on the tables naked -what crazy party!"

What do you all think? (I recognize that the local/regional economy is not an isolated island national trends will blow our way as well.) Are things getting better?

0

rhys jones 2 years, 11 months ago

scott -- Somewhat less succinct, but exactly my point. We take any little glimmer we can and paint it in the most positive light. I find it hardly encouraging when only 15,000 new unemployment claims were filed last week, as opposed to 20,000 the week before that. That is a sign of "recovery"? Maybe there's just fewer jobs to lose, every week.

Look at the real estate values you cite, the new building permits, the employment. It is not a pretty picture, when even our former amigos now find it better back in Mexico.

I'd hesitate to call things "better," think we haven't seen bottom, yet.

0

Scott Ford 2 years, 11 months ago

Hi Highwaystar - Thanks for providing a response. There is a lot of mixed economic indicators going on in the economy more so on the national level than local level. You have followed my writings and comments to know that I am at my core a "glass half full" type of guy. I do not think however, my cautious optimism about what seems to be occurring locally in the economy is unfounded. It is recoverring but it is not going to look like 2007 again soon nor should it.

The 2006/2007 period in our local/regional economy was running too hot. The unemployment rate in 2007 for the whole year was 2.6% That should not be viewed as the "normal time" - it was our crazy time. In 2006 and 2007 we were building an average of 500 residential units annually. With only about 9,000 households in the county this is more evidence of this as the crazy time. We all knew what was going on - folks felt the rise in prices had no end. "Buy now or miss ever owning a home in the Steamboat Springs area." A lot of folks got swept up in this thinking.

I do not think we are going to get back to 2007 economic activity levels anytime soon. However, 2011 is shaping up to be a wee-bit better then 2010 and 2010 was mostly better than 2009.

0

rhys jones 2 years, 11 months ago

scott -- Can you imagine the local market if 700 would've ever gone in? Then Steamboat would be experiencing the vast devaluations now occurring in other overbuilt metro areas, like Phoenix and Vegas, to compare apples to oranges. The point is, I don't think any local trends can be extended to the national picture. Property, construction, and employment continue to suffer. Signs of improvement are few. The underlying causes continue unabated, while the figureheads distract the masses. I wish I could be so optimistic.

0

exduffer 2 years, 11 months ago

Scott F- Maybe you can help refresh things in my mind. I seem to remember learning in an economics class many moons ago that 5% was considered optimal unemployment, anything lower than that was a sign of an overheated economy. At 5% approximately 80% of those were the chronic unemployed ( those who couldn't or wouldn't hold a job) and the rest were the transitional unemployed ( those in a move, change of career, or temporarily laid off).

0

Scott Ford 2 years, 11 months ago

Hi Highwaystar - No kidding! Timing is everything. If SB700 had taken place 5 years, earlier our housing landscape would have looked very different. Perhaps like a mini Phoenix.

In much discussion with Danny of SB700, I could not get a good fix on the price range of his product offering mix. Eventually the term attainable was used and attainable being something in the range of 4X to 6X of Median Routt County household income. This simply means that the homes on a collective average across all offerings would have been in the $320K to $480K range.

In 2004-2007 in the era NINJA loans (No verification of income, job or assets) there would have been a ton built and sold. If this would have sync with SB700 today we could only define it as a mess. The impact it would have had on existing home values could have easily added enough distressed inventory that instead of a 30% decline we could be looking at 40% to 60% from 2008 peak values. By luck or providence we avoided this mess. It could have easily happened if the timing of SB700 would have been a few years earlier. Bottom-line we collectively dodged a bullet as a community.

With regards to construction we have a lot of existing housing inventory to work through before there will even be a glimmer of measurable new home construction. There is still well over 1,000 homes listed for sale. An predictive indicator YVDP developed in looking at 30 years of monthly data is that sales of existing single family homes need to represent about 2.5% to 3% of existing inventory. This 2.5% to 3% level needs to be sustained 12 to 18 months before much of anything begins to happen. This percentage has been hovering around 1% to 1.5% - residential construction recovery is a long ways away.

In the crazy days of 2006/07 construction industry sector represented the source of 25% of the jobs and 30% of income. These numbers have easily been cut in half. The fact that the local economy did not crumble -with this level of shock over a relatively short period of time highlights some of the underlying strength the local economy has. It was a gut punch - It staggered us but we are still standing - albeit weary.

0

Scott Ford 2 years, 11 months ago

Hi Exduffer -

Full employment is likely in the 5 to 6 percent range. It is felt that at any given time in the economy there are between 2 and 3 percent of the folks are between jobs as a result of leaving existing employment with the goal of improving their situation. Another 2 to 3 percent of the participating workforce is entering for the first time (typically students)or re-entering (previous stay at home or completing additional training returning). On top of all this there is perhaps in any given "normal" time job layoffs in the 1 percent. Mix and match and put it altogether full employment is in the 5 to 6 percent range.

Our workforce participation level in Routt County is one of the highest in the state. According to 2008 census data about 93% of our workforce was participating either on a full time or part-time basis. When we consider the census age demographic for "workforce" is between the ages f 16 and 64 - we were busy. Moffat County's workforce participation during the same period was about 70%.

In Routt County, we are working people. We seem to enter the workforce earlier and work longer than the averages. This characteristic is highly correlated with the adult education level.

Here is a fun fact Almost 40% of the individuals between the ages of 65 and 69 in Routt County are working. Is this driven by need or enjoyment? Looking at the affluence of this group it is most likely the latter. Simply put we are a hard working smart group that just keeps going and going and has fun doing it.

0

sledneck 2 years, 11 months ago

Yeah, Scott. You guys are a real bunch of powerhouse workers.

I have been here a decade and have yet to have the first person ask to meet me on a job earlier than 8 am... a time I always considered "lunchtime" in my former life.

You go on telling yourselves how hard you work... cupcakes.

0

Scott Wedel 2 years, 11 months ago

Seems to me that since the improvements are so modest and local MMJ industry was nonexistent a couple years ago, that the MMJ industry can claim responsibility for being the difference between a growing vs shrinking local economy.

Well, discussing what would have happened if SB 700 had gone in or gone in five years earlier requires making a whole lot of assumptions on how it going in would have changed things.

First, if SB 700 as proposed had been approved by the voters then it would be a giant mess because the annexation agreement involved developer agreeing to pay for stuff that assumed pricing that existed in 2006/7. So presumably developer would have quickly failed to meet the annexation agreement, gone bankrupt and then what would the city do with the property in bankruptcy in violation of the annexation agreement?

If SB 700 had been approved some years earlier then it would make a huge difference on what terms and how many lots had been sold. If enough lots had been developed and sold then there could have been enough supply to limit the run up in local prices. Note that cities with minimal zoning generally experienced more modest price increases than highly regulated zoning cities because it is always too easy to create local supply. If we had all those lots with owners ready to build once they could make a profit then the abundance of supply should have been expected to put a limit on the local price increases.

And taking local workforce data from 2008 is an exercise in generalizing from a special moment in time. I recall looking at the classified and seeing over 200 jobs listed and 20 places to rent. And so some retired people I knew were working simply because the pay was too good to turn down. I'd hate to generalize about Routt County workforce based upon 2008 data.

I recall reading during the boom that full employment was now considered to be less than 5% and could be as low as 3%. Full employment is considered a key number because by definition it is the point at which companies have to pay employees more to fill job openings or prevent employees from leaving. Well, during the boom the unemployment rate in some places was under 5% without wage inflation. I think one of the factors was the willingness of retired people that didn't consider themselves to be in the workforce and yet were willing to work if asked by former coworkers or employers.

As for the local effect of the collapse of the construction industry - yes one can be in Steamboat and barely notice the effect. Go to South Routt and you notice it like a ton of bricks.

This is was listed a couple years for over $400K. Now $149K. Assessor says it was worth $288K as of July 2010 which is down from $402K as of July 2008. Probably couldn't build it even today for $250K. http://www.upperyamparealty.com/property_details.php?Mls_Num=126425

0

spidermite 2 years, 11 months ago

Scott W., Hayden's property values have decreased along with South Routts. Now Hayden appears to be rebounding slightly. They don't have a mmj industry. I believe the increased cost to commute is what causing the rural areas to be less desirable.

0

Scott Wedel 2 years, 11 months ago

Spidermite, SB real estate is far more of a resort market with people buying a lifestyle. The lifestyle probably includes work, but the local job may be only part of their income or they have a location neutral job.

Meanwhile, Hayden and South Routt real estate market is far more about local workers living on their take home pay. And the collapse of the construction industry has hit hard and at least those looking can buy in Oak Creek have been able to watch bank owned properties keep dropping their prices.

0

spidermite 2 years, 11 months ago

Scott, Their are bank owned properties in Steamboat and Hayden as well. My point was - Hayden is rebounding without the mmj industry. Also the price of fuel is a contributing factor in rural areas being less desirable.

0

greenwash 2 years, 11 months ago

Yea right the economy is improving....Sure...Reality is way to many restaurants/bars and I bet not a one is thriving...Zero construction except for very few projects...Real estate worth 50% less and the only worthy sales are foreclosures / short sales.Very limited jobs unless your willing to work for $12 an hour or less....But go ahead believe what you want...I say our economy sucks and will continue to for 3-5 more years if not more.

0

Requires free registration

Posting comments requires a free account and verification.