Data point to sustained economic recovery in Routt County

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— Several key indicators point to a continued, but slow, economic recovery for Routt County, with gross retail sales and unemployment numbers expected to improve during the second quarter.

Scott Ford, a local economic analyst and an adviser for Yampa Valley Data Partners, said the group’s second quarter economic forecast gives reason for optimism in Northwest Colorado.

“We’re just barely moving on some stuff, but it’s there,” Ford said Monday, referring to economic indicators like consumer confidence, consumer spending and unemployment.

Ford said one of the region’s most reliable data tools is the economic stress indicator, which analyzes the total local workforce and the number of jobs from year to year. An economic stress indicator of “zero” would reveal equilibrium between the number of jobs and the availability of workers to fill those jobs. A positive number indicates decreasing unemployment. But Ford said the number can “get too positive.”

For example, an economic stress indicator above 0.025 means there aren’t enough workers to fill available jobs. Routt County’s current economic stress indicator is 0.019, meaning labor shortages are on the horizon.

“It means it will be harder for employers to find staff,” Ford said. “To find staff, they’ll have to pay more. When you begin to pay more, it lifts household incomes but also crunches down the margins in those particular business sectors.

“Is it good news or bad news? It just is what it is. It happens.”

Ford said the county’s food services, health care and retail industries would be the first to experience any impacts of a labor shortage.

On the flip side, Ford expects gross retail sales in Routt County to be up 5.2 percent this month compared to April 2011. Yampa Valley Data Partners also forecasts a 6 percent jump in gross retail sales in May and a 6.3 percent increase in June. Much of that optimism is based on the national consumer spending poll, which continues to show steady gains in the amount of money Americans are spending per day. Second quarter consumer spending could be in the range of $65 to $70 per day, which is a $6 to $7 per day increase over the same time period last year. Similarly, consumer confidence continues a slow but steady upward climb. However, Ford cautioned that Routt County doesn’t follow national trends as closely as places like Moffat County. That’s largely because of seasonality components and tourism.

Other notes of interest from Yampa Valley Data Partners’ second quarter economic forecast:

• Median listing prices in the local real estate market may have stabilized. In March, the median listing price of a home in Routt County was $487,500, an increase of 6 percent from the same time last year. The median price remains 28 percent below the peak of October 2008, according to Yampa Valley Data Partners.

• The number of homes for sale in Routt County continues to decrease, as does the number of homes entering the foreclosure process. “The real estate ‘bottom’ in both (Routt and Moffat) counties has been reached and a recovery is slowly occurring,” the forecast reads. “Barring any significant changes on the national economy, this recovery should continue for the balance of this year. This coming quarter may also represent the best value in real estate in the Yampa Valley since 1981-82.”

While Ford expressed optimism about the current state of the local economy as well as its future prospects, he warned about comparing it to the unprecedented run-up of 2006 and 2007.

“Things are kind of improving,” Ford said. “In the big picture, the danger that we have ... is looking at late 2006 and 2007 as the ‘normal’ time. That wasn’t normal. Just like way down isn’t normal, way up isn’t normal. Our basis of comparison shouldn’t be Mount Everest.”

But what positions Routt County well for continued recovery — and more so than similar counties like Summit and Eagle — is a diversified economy that includes many location-neutral businesses.

“We are more than just one or two segments of (economic) activity,” Ford said.

For more about Yampa Valley Data Partners, visit www.yampavalleydatapartners.com.

To reach Brent Boyer, call 970-871-4221 or email bboyer@SteamboatToday.com

Comments

Scott Wedel 2 years ago

In a place like this where there is a substantial portion of the population which comes when there is work and leaves when there is no work then it seems to me that a reliable indicator of the economic situation is the number of Help Wanted ads in the newspaper compared to the number of modest rent housing available.

During the boom there were as many as 200 help wanted ads with 20 or so available housing units.

In 2009/2010 there were 60+ housing units with 10-20 help wanted ads.

Now the ratio is closer to one to one which indicates to me that things are still weak, but not that bad. Recent employment stats also indicate that number of jobs have crept back up a bit.

So it doesn't take an organization with a fancy name and numbers from formulas too complex to explain to realize the local economy is modestly improving.

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mark hartless 2 years ago

A lot of people I knew have left this valley. I know some who have hung on but are still contemplating leaving even now. I have some real estate here worth half what it was worth 4 years ago. I have a home here worth less than I paid for it in 2006. Not one damn thing I have ever done in this county is above water... not one.

Still, don't get me wrong, being here for those last few record winters has been a hell-of-a ride.

For comparison, I have real estate investments in other states that have lost almost no value and the rental return has continued to rise. (That's the only reason I can afford to live here)

I love living here and will continue to do so but I wouldn't invest in this county if it was the last place on earth. One of it's biggest assets, coal, is being demonized; snowmobiling and other motorized recreation is being attacked; the construction industry also; envirnomentalists are taking over and revenue generatiing business is on the retreat. When they come for the hunters this county is D-O-N-E.

Routt County's current data shows me only what some call a "dead cat bounce". If you are optimistic about Routt County I literally have some real estate to sell you... cheap! The age-old question "how do you leave Routt County with a million dollars"? is being answered every day... Show up here with 2 million!

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Scott Ford 2 years ago

Scott W - You are absolutely correct - it does not take a organization with a fancy name and a lot of data sets to see that the economy is improving. Often times data does not thing more than to put into context what common sense already knows.

However, the challenge with common sense was best stated by the French philosopher Voltaire who is credited as saying, "That common sense is not all that common."

Nice to see you commenting on the blogs again.

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Scott Wedel 2 years ago

Scott F. Well, trouble with the claim that data is putting something into context is that it requires understanding the collected data, the theoretical basis of the formulas which are being fed the data and thus, for those people, numbers like .019 and .025 have some meaning. For everyone else they are just meaningless numbers being cited by experts showing they have numbers to cite.

Looking at the report, it strikes me that the stress indicator is flawed because it barely registered positive during the 2005-2007+ construction boom. There was far more stress than indicated from the chart. As we've discussed before, I think your calculations are flawed because it uses a model more appropriate for nations in that size of workforce is treated as an independent variable (ie upon demographics) when in our region it is a highly dependent variable affected by jobs and unemployment. Ie. in a country without work then people are unemployed until they reach retirement age, but workers come and go here depending upon number of available jobs.

Thus, the idea that .025 indicates businesses will have issues retaining workers is simply not true because more workers will move here. The point at which businesses have trouble filling jobs is when we run low on vacant housing for the prospective workers in the available jobs. I think sometime in either 2005 or 2006 that this area essentially ran out of worker housing. Thus when this area reaches about that level of employment again then we will again have employers having difficulty filling jobs.

Thus, I suggest your model is flawed because it assumes the limiting factor on having enough available workers is the size of the workforce when in Yampa Valley the limiting factor is actually available housing for the workforce.

I am generally not posting because I dislike being involved in a discussion knowing that many people are not allowed to participate because of arbitrary decisions by the paper. I've always liked Ursula K Le Guin's short story The Ones Who Walk Away From Omelas because I've always been offended by the idea of scapegoating which is what the newspaper did to the semi-anonymous posters. The problem never was the semi-anonymous posters, but the bad tone was from the comments allowed to stand from either named or semi-anonymous posters.

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mark hartless 2 years ago

Scott W, Your argument about the transitional workforce here, as opposed to the broader region/ state/ nation, makes some sense.

You say that the area ran out of housing for them in '05-'06. Do you think the boom or spike in real estate/ housing market was exacerbated even slightly by putting affordable housing online which provided more room for more workers thus enabling the spike to continue longer than it otherwise would have? If fewer workers had kept comming would the spike have been more severe or less severe? Would it have occurred a bit sooner? Or was AH not significant enough to be a factor at all?

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Scott Wedel 2 years ago

Mark, I think affordable housing programs has provided so few affordable units that it was truly irrelevant. The only people affected by affordable housing were developers forced to create "affordable" units based upon a nonexistent buyer with a modest income and large down payment. So the developer had to wait until given waivers to sell those units on the free market.

SB city council views that affordable housing had to be created within city limits was a truly stupid attempt to fight the reality that so many local workers were happily living in Stagecoach, Hayden and so on. So they wasted substantial resources on a handful of units in city limits instead of making a more substantial regional impact. YVHA's reckless belief that they were smarter and better developers than the private sector has destroyed their financial situation since they are now holding vacant land purchased during the boom, and not just in west Steamboat, but lots in Oak Creek's Sierra View. Affordable housing can do good by preserving worker housing when run by people that understand that their strength is their access to low rate financing. And so they can buy apts or mobile home parks based upon a lower cash flow than private market investors. Routt County is for whatever reason cursed with awful public sector housing organizations since the other public sector player, Routt County Foundation for Senior Citizens is such a miserable landlord. Their operation of their Oak Creek building has been a source of tenants for my OC apts with every one saying they'd never move back there. They've actually said a 30 day notice given on the 2nd is too late for the next month and so the tenant will have to pay rent for another 59 days. They charge substantial fees for tenants wanting to switch apts whom have served their lease terms and now are on a month to month basis. So tenants that could switch apts for free by leaving and then returning to their desired apt are instead ripped off, or chose to leave and not return. BTW, these problems are not inherent to public sector housing organizations because neighboring Grand County Housing Authority seems well run both in acquiring property and in managing them.

And workers didn't stop arriving when this area "essentially ran out of worker housing". By that phrase I was intending to say that people's first choice of a place of their own within 25 miles or so was hard to find. Thus, worker housing was switching to living further away (in Craig) or living with more other people. Note that rents did not increase that much because worker pay didn't increase much and so many of the jobs were in a narrow, lower paying range so even during the housing shortage many workers would move to lesser options such as sharing with more people or live further away to avoid paying higher rent. So an apt at one price could be rented to many people in a day, but at 10% more then it would sit vacant for months.

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rhys jones 2 years ago

The only reason I chose this diatribe to poach and digress is because it's the most recent.

Maybe you will be entertained by a shuttle flight:

http://io9.com/5893615/absolutely-mindblowing-video-shot-from-the-space-shuttle-during-launch

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Scott Stanford 2 years ago

Scott Wedel said in an earlier post "it seems to me that a reliable indicator of the economic situation is the number of Help Wanted ads in the newspaper compared to the number of modest rent housing available. During the boom there were as many as 200 help wanted ads with 20 or so available housing units."

Scott's numbers are a little off, but he is certainly right that classified employment and rental advertising tell the story of our economy the past five years. During the first quarter of 2007 (the boom time) the ratio of employment advertising to rental advertising was 5:1. As the housing market collapsed and the unemployment rate rose, that ratio began to shrink rapidly and by the first quarter of 2009, rental advertising had surpassed employment advertising. For two years, rental advertising outpaced employment advertising until the first quarter of 2011 when employment crept past rental advertising.

In the first quarter of 2012, employment advertising is up 30 percent compared to the first quarter of 2011. In fact, employment advertising was at its highest level since the 1st quarter of 2008. Conversely, rental advertising is down 12 percent in the first quarter and is at its lowest level since the first quarter of 2008. The ratio of employment ads to rental ads is up to 2:1, certainly not the ratio we saw during the boom, but the healthiest it has been in 4 years.

One other note -- Legal advertising, driven largely by foreclosure notices, is down 30% from its record pace in 2011. That's a positive sign that the rate of foreclosures is slowing.

So I guess what I am saying is that the Scotts -- Wedel, Ford and Stanford -- are in agreement that all the data anecdotal, statistical and newspaper, point to a moderately improving economy driven by slightly more jobs and a little better housing market. But it is not 2007.

Scott Stanford General Manager sstanford@SteamboatToday.com

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Scott Wedel 2 years ago

Scott Stanford, Well since we are going into details, my count of 200 jobs wanted was not a precise count of help wanted ads, but a count of local jobs advertised so a Sheraton or YVHA ad that listed 12 different jobs available was counted as 12 jobs wanted, not one. But I also did not count advertised jobs in Wyoming or Grand Junction, nor did I count jobs that were not expecting local candidates such as school superintendent (or whatever arbitrary distinction I made), nor did I count work from home or such.

Likewise, I didn't count rental housing above a couple thousand dollars or so a month.

But such measurements are not to considered precise numbers, but broad indicators changing from 5:1 to 1:2 or such. The interesting part is that employment and rental ads are considered more of a forward looking indicator of what is going to happen while labor statistics are backwards looking. That forward looking aspect is supported by Scott Stanford's observation that current numbers are best since 1st quarter 2008 (and so 2nd quarter and later were weaker) since employment numbers didn't decline until months later.

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Rob Douglas 2 years ago

"Foreclosure activity fell in the first quarter to the lowest level in more than four years, but mainly because the process of removing people from their homes has slowed. The number of homes just beginning the foreclosure process rose in March for a third straight month, a sign that the nation's housing problems are far from over, according to RealtyTrac, which tracks the figures. “The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, chief executive officer of RealtyTrac. He said a large backlog of bank-owned properties that has accumulated over the past few years will put added pressure on the housing market when banks eventually list them for sale. “The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen,” he said in a news release." http://economywatch.msnbc.msn.com/_news/2012/04/12/11145443-foreclosures-slow-as-pipeline-keeps-backing-up?lite

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rhys jones 2 years ago

Scott -- Based on the typical hourly wage in this town, not to mention the scarcity of even those positions, how can you consider "a couple thousand dollars or so a month" anything near affordable? I love hearing how it is, from the Fourth Estate, and people with nothing but money and time on their hands.

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Scott Wedel 2 years ago

Rhys, I defer to data that has been presented by Scott Ford on any number of occasions that average household wages in this county are not insignificant and thus a couple thousand a month is not an absurd amount to suggest is affordable for a some working married couples. Certainly someone working at Twentymile or any number of other local better jobs can afford that.

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rhys jones 2 years ago

Sorry, I'm too busy scrounging hours at my $10/hr restaurant job to pay my $650 rent to argue with you. You can have this forum back, to squawk as you may.

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Fred Duckels 2 years ago

It is my understanding that we have a backlog of forclosures due to the settling of the problems facing the banks because of robosigning.

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mark hartless 1 year, 12 months ago

Thanks for your contribution to our community Rhys. ?And for the Space Shuttle clip.

Remember: Work is a privilege; and an idle mind is the Devil's workshop. Don't give up. Every dog has his day.

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