'Slow, slow, slow' recovery seen for local builders, economy

The Pikes Peak region’s housing market will improve this year — prices will rise, foreclosures will drop and builders will construct more homes and townhomes.

But the gains will be relatively slight, and the market will limp along for the most part because of a lack of new jobs, according to economist Fred Crowley of the University of Colorado at Colorado Springs. Crowley presented a 2011 forecast Wednesday to about 80 members of the Housing and Building Association of Colorado Springs.

“Slow, slow, slow” is how Crowley described the pace of recovery for the housing market and overall local economy. “I like to call it ‘ice melting in January slow.’ ”

Several local and national economic indicators have improved over the past several months, said Crowley; he had said as early as 2009 that he believed the recession had ended and the local housing market had bottomed out in spring of that year.

For 2011, Crowley forecasts home prices will rise by 4 percent; new foreclosure filings will fall from 4,828 to about 4,200, which is still a whopping total compared with past years; and building permits for single-family homes and townhomes will rise 22 percent to about 1,900, still far below levels of a decade ago. Colorado Springs sales tax collections also could rise 4 percent to 5 percent this year, he said.

But the pace of job growth will have the greatest effect on housing and the economy, Crowley said.

After the start of the recession in 2001, it took about five years for the Pikes Peak region to gain back the jobs it lost during that downturn, Crowley said.

Three years after the start of the recession that began in late 2007, Colorado Springs and surrounding El Paso County had about 29,000 residents without jobs in November and an unemployment rate of 9.5 percent — the highest in a decade, according to the Colorado Department of Labor and Employment.

Not only are those numbers worse than the 2001 recession, but many of the positions lost this go-round are manufacturing jobs that the community isn’t likely to get back, Crowley said. As result, it could take the area seven to eight years to recover recent job losses, he added.

“I don’t see any quick recovery,” Crowley said. “We’ve got stability. Stability will grow the economy 3 or 4 percent. But private sector growth could grow the economy 5 to 8 percent. It’s just that we don’t have that private sector growth.”

Is there a sure-fire way to pump up the local economy? Crowley responded to his own $64,000 question with a $100 million answer: He challenged the community to create its own nine-figure venture capital fund that would finance entrepreneurs and start-up companies.

He suggested 10,000 individuals and organizations be recruited to ante up $10,000 each, which would generate $100 million to supply a venture capital fund. Twenty to 30 new companies a year could be attracted to the Springs, which would be required to launch their operations in the Springs and employ their workers here to qualify for seed money, he said.

Crowley himself offered to write his own $10,000 check to get the fund rolling.

“This can be done,” he said. “Sitting around waiting for it to happen is not going to make it happen.”
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