House of CardsA five-part series by the Steamboat Pilot & Today | Aug. 28, 2009 WWW.STEAMBOATPILOT.COM/HOUSEOFCARDS

The rise and fall of Routt County’s real estate economy

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Part 5: Reshuffling the deck

House of CardsHouse of Cards♦House of Cards♦

Steamboat goes all in

Retiring baby boomers helped fuel the demand that led to record real estate sales in the mid-2000s. But when the market went upside-down, the impacts were widespread.

Story by Tom Ross

Photos by Matt Stensland

The mortgage market folds

The national mortgage meltdown hit hard locally, as homeowners and business-people struggled to face a new reality of vastly decreased values.

Story by Brandon Gee

Photos byJohn F. Russell

Holding a losing hand

Since the market’s plunge knocked the wind out of the work force, businesses have been forced to change and shrink — and some have closed their doors.

Story by Blythe Terrell

Photos by Joel Reichenberger

New game, new odds

Declining tax revenues have hit local governments hard, and falling home prices and a tighter lending market are hurting affordable housing ini-tiatives, as well.

Story byZach Fridell

Photos by Matt Stensland

The rise and fall of Routt County’s real estate economyHouse of Cards A five-part series by the Steamboat Pilot & Today | WWW.STEAMBOATPILOT.COM/HOUSEOFCARDS

On the coverConstruction worker Justin Hayes frames a house in Steamboat Springs. The downturn in housing has slowed building in Steamboat Springs. Hayes, and many others like him, is hoping for a bright future in the housing and construction industry.

Photo by John F. Russell/Staff | Design by Christopher Woytko/Staff

Part 5 — today

Everyone has an opinion about the future of housing in Routt County as interested players in the real estate busi-ness look for footing in a shift-ing landscape.

Story by Margaret Hair

Photos byJohn F. Russell

Cam Boyd, a broker-owner at Prudential Steamboat Realty, shows Bill Spinder a home in downtown Steamboat Springs. Spinder, who says he’s bought numerous properties from Boyd through the years, is looking for a good opportunity to invest in the valley.

Photo by John F. Russell/Staff

A Supplement to the Steamboat Pilot & Today Friday, August 28, 2009 | 3House of Cards

In the summer of 2007, Matt and Stephani Murphy put in a $440,000 offer on a house in Stagecoach’s Red Hawk Village neighbor-

hood. Another prospective buyer made a higher offer on the same day, and the Murphys lost out on the house in the modest subdivision south of Steamboat Springs.

The Murphys, who were recent transplants from Los Angeles, figured maybe it wasn’t the right time. So they rented a place at Sundance Creek Condominiums in Steamboat, and they held out.

Their patience paid off, aided by a drastic turnaround in the real estate market.

“I had a baby, and we were just busy with other things so we didn’t really get back in the market, which was the best thing that could have happened for us,” Stephani Murphy said. “For us, we ended up getting a bigger house than we originally plan-ned on purchasing for so much less.”

On June 29, the couple closed on a three-bedroom, 3 1/2-bath, 1,950-square-foot home in Red Hawk Village for $297,000. The property last sold for $555,000 in April 2007, according to the Routt County Assessor’s Office.

The transaction pace of the local real estate market has slowed dra-matically from the frenzied pace of 2006 and 2007, and folks like the Murphys are taking advantage of it. Sales prices that were unimagi-nable just a year ago are the new norm, but stricter lending require-ments and a general uneasiness about the economic climate is keep-ing many sellers and buyers from finding common ground. Whatever the future of Routt County’s real estate economy, there’s no shortage of opinions about if and when it will return to the record levels of the mid-2000s.

When Red Hawk homes started reappearing as short sales around February of this year,

Matt Murphy couldn’t help but take notice of the distressed prices. Short sales take place when property owners can no longer make their mortgage pay-ments and their banks agree to sell the

properties at a lowered price to prevent the costs of going to foreclosure.

Not only did the Murphys capital-ize on drastically reduced prices, they qualified for a one-time $8,000 credit on their 2009 tax return; the credit for first-time homebuyers is part of the American Recovery and Reinvestment

Act of 2009.“I just think if we didn’t get in now,

we never would have been able to afford,” Matt Murphy said.

Standing in the entranceway of his Sagebrush Circle home — where he and Stephani moved at the beginning of July with their 18-month-old son, Cole

— Murphy said that if his family still lived in L.A., he might have entered into a risky loan to buy a house for twice as much money. If they’d bought during the height of the market, the $300,000 that got them a house in Stagecoach in summer 2009 would have netted only a condo or a house even farther out-

Story by Margaret Hair | Photos by John F. Russell

Absorption rate: The number of listings divided by the rate of sale. For example, a market with 2,100 available properties that sells 300 proper-ties in a year has an absorption rate yielding a seven-year supply of properties. The rate has to be adjusted periodically to account for chang-ing listings and transactions.

Federal Reserve System (the Fed): U.S. central-banking system com-prising 12 regional central banks owned by private banks. Governed by a seven-member (each appointed by the president for 14 years) board of governors, the Fed regulates interest rates, availability of bank credit and sets other monetary policies such as legal reserve requirements for banks.

On the ’NetTo read the first four parts of the Steamboat Pilot & Today’s special section House of Cards, visit www.steamboatpilot.com/houseofcards.

JOHN F. RUSSELL/STAFF

Stephani Murphy prepares dinner inside her Red Hawk Village home in Stagecoach. Stephani and her husband, Matt, took advantage of the downturn in the housing market to purchase their home.

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4 | Friday, August 28, 2009 A Supplement to the Steamboat Pilot & Today House of Cards

side of Steamboat Springs.“Now with all the foreclosures and

the short sales that have gone through, all these families have been able to afford that, and that’s great. It’s unfor-tunate for everyone else, and fortunate for all of us,” he said.

For the past 1 1/2 years, Matt has been a framer for Albertini Construc-tion, first working on a 20,000-square-foot log home near Clark, and recently helping with additions and renovations at Vista Verde Ranch, a luxury guest facility in North Routt County. Murphy hopes those projects will last for another six months to a year, he said.

“I think we might bridge the gap, and the economy might straighten out within a year or so, but who knows. Hopefully. It would be great,” he said.

The market nowWhen the Murphys moved to Steam-

boat Springs three years ago, they walked into a real estate market where prices and sales volume were at a record high and available listings were at a record low.

In the first two quarters of 2009, the Steamboat Springs Multiple Listing Service, which tracks data for registered Realtors in Steamboat Springs and sur-rounding areas, recorded 163 transac-tions, said Doug Labor, broker-owner of Buyer’s Resource Real Estate and manager of MLS statistics.

At that sales rate, Labor expects to see about 320 sales in 2009. With just more than 2,300 residential, commercial and property listings available, that rate of sale saddles the market with supply that would last about seven years, he said. A typical rate of supply is about a year, Labor said.

At the end of 2008, Nick Metzler — a broker-owner for Colorado Group Realty — saw a gap between what buy-ers were willing to pay and what sellers were willing to accept.

“I can look back from, say, March to October of 2008 into March of 2009, it’s the first time in my career — minus just after 9/11 — that there was almost no market, meaning the sellers were up here and the buyers were down here and there were just almost no transac-tions,” Metzler said.

To an extent, that gap remains, he said.

“There is and was a gap, and I think that just is something that happens over time … the demand on the inven-tory slows down, and then it just takes awhile,” he said.

Metzler has been directly involved with four homes sales between $1.5 mil-lion and $2.5 million this year. Every deal is different, he said, but all four sales included a price reduction.

“That’s how the market will come together; sellers will come down more and buyers will come out of the wood-work thinking they’re getting a good value, or vice versa,” he said.

In July, David Baldinger Jr., manag-ing broker-owner of Steamboat Village Brokers, said he had more showings than he did in any month this winter.

Continued from page 3

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Kathryn Pedersen, a vice presi-dent and mortgage loan offi-cer at Yampa Valley Bank,

didn’t want to paint too dark a picture of the housing loans market during a mid-July interview. She did, however, acknowledge that loan seekers are likely to see more and more regula-tions moving forward through the next few years.

“You always think of a pendulum. There was no regulation or very little … and now the pendulum has gone to the absolute other side where it’s more and more hard to do things,” Pedersen said.

It’s that more difficult side where Pedersen sees things resting for the foreseeable future. As of mid-July, she felt the pendulum had a little farther to go in that same direction.

“One of the trends is that we’re going to need tax returns, we’re going to need asset statements, we’re going to need everything about you,” Pedersen said. The bank might then check a lender’s tax returns against the infor-mation sent to the Internal Revenue Service, she said. For the bank, it’s a longer process, but not an impossible one, Pedersen said. The new lend-

ing climate might seem muggier to a potential lender.

“We’re used to that, but I think depending on the client, it’s harder for them because they’re not used to giv-ing everything but their blood for the loan,” Pedersen said.

As mortgage brokers change the way they do business every week, as Pedersen said, lenders have trouble shifting so quickly. But as the summer rolled on, so did Yampa Valley Bank’s mortgage loan traffic, with some of the best and easiest loans being those available to first-time homebuyers,

Pedersen said. For the most part, the bank is putting through 30-year, fixed-interest products, she said.

“I still see the 30-year being around for a while; that is the product that has been here, and I think it will stay no matter what. But I also think that we’ll continue to see some more legislation and regulation, and that may change the product structure down the road, and that may limit what people can and can’t do,” Pedersen said.

Locals are more likely to get a 20-percent-down loan if they start taking steps now to get rid of debt and “have

some degree of savings,” said Elizabeth “E.A.” Black, a Steamboat Springs financial consultant.

Pedersen said she expects regulations to stay tight for a while, but she thinks there might be some things that will free up within a year or so. Before that can happen, lenders will need to figure out their cash positions and markets will need to figure out their new rules.

“It’s hard to say what’s going to happen, because I never would have predicted where we are now,” she said.

— Margaret Hair

The future of lending

0

500

1,000

1,500

2,000

2,500

Q1 Q2 Q3 Q41999

Q1 Q2 Q3 Q42000

Q1 Q2 Q3 Q42001

Q1 Q2 Q3 Q42002

Q1 Q2 Q3 Q42003

Q1 Q2 Q3 Q42004

Q1 Q2 Q3 Q42005

Units

Real estate sales

Real estate listings

Real estate listings vs. sales

A Supplement to the Steamboat Pilot & Today Friday, August 28, 2009 | 5House of Cards

Kathryn Pedersen, a vice presi-dent and mortgage loan offi-cer at Yampa Valley Bank,

didn’t want to paint too dark a picture of the housing loans market during a mid-July interview. She did, however, acknowledge that loan seekers are likely to see more and more regula-tions moving forward through the next few years.

“You always think of a pendulum. There was no regulation or very little … and now the pendulum has gone to the absolute other side where it’s more and more hard to do things,” Pedersen said.

It’s that more difficult side where Pedersen sees things resting for the foreseeable future. As of mid-July, she felt the pendulum had a little farther to go in that same direction.

“One of the trends is that we’re going to need tax returns, we’re going to need asset statements, we’re going to need everything about you,” Pedersen said. The bank might then check a lender’s tax returns against the infor-mation sent to the Internal Revenue Service, she said. For the bank, it’s a longer process, but not an impossible one, Pedersen said. The new lend-

ing climate might seem muggier to a potential lender.

“We’re used to that, but I think depending on the client, it’s harder for them because they’re not used to giv-ing everything but their blood for the loan,” Pedersen said.

As mortgage brokers change the way they do business every week, as Pedersen said, lenders have trouble shifting so quickly. But as the summer rolled on, so did Yampa Valley Bank’s mortgage loan traffic, with some of the best and easiest loans being those available to first-time homebuyers,

Pedersen said. For the most part, the bank is putting through 30-year, fixed-interest products, she said.

“I still see the 30-year being around for a while; that is the product that has been here, and I think it will stay no matter what. But I also think that we’ll continue to see some more legislation and regulation, and that may change the product structure down the road, and that may limit what people can and can’t do,” Pedersen said.

Locals are more likely to get a 20-percent-down loan if they start taking steps now to get rid of debt and “have

some degree of savings,” said Elizabeth “E.A.” Black, a Steamboat Springs financial consultant.

Pedersen said she expects regulations to stay tight for a while, but she thinks there might be some things that will free up within a year or so. Before that can happen, lenders will need to figure out their cash positions and markets will need to figure out their new rules.

“It’s hard to say what’s going to happen, because I never would have predicted where we are now,” she said.

— Margaret Hair

■ On May 20, Congress passed a bill into law that aims to prevent mortgage foreclosures by guarantee-ing or modifying certain loans and providing HUD funding for certain people; changes to rules on fore-closure mitigation and credit availability; and creating a mortgage fraud task force.■ In June, President Barack Obama proposed a new regulatory structure that would give more power to the Federal Reserve, the nation’s central bank, and create a new agency called the Consumer Financial Protection agency. Both moves would create more oversight of lending practices, with powers extending into different kinds of credit including mortgage loans.■ On July 23, the Federal Reserve Board proposed changes to the Truth in Lending Act, this time focus-

ing on closed-end mortgages, according to a Federal Reserve news release. The proposed rules would require increased disclosure of the annual percentage rate, including information about fees and rates com-pared with other borrowers; and “require lenders to show consumers how much their monthly payments might increase, for adjustable-rate mortgages,” according to the release.■ Regulations enacted on Aug. 1 of this year as part of the Housing and Economic Recovery Act require a three-day review of loan documents before the loan process can get started, and allows for another three-day waiting period at the end of the loan process if the annual percentage rate of the mortgage increases by more than 0.125 percent.

The future of lendingLending regulation changes

Comparing ski resorts ListingsArea 2004 2005 2006 2007 2008Steamboat 1,474 759 1,222 1,111 1,992Summit County 3,846 773 3,577 1,643 1,347Park City 2,107 1,222 1,698 2,625 3,084Sun Valley 1,216 1,289 1,756 2,005 1,442Telluride 518 512 386 548 753Jackson Hole 628 461 446 384 574Vail 1,596 1,081 1,550 1,759 1,337

SalesArea 2004 2005 2006 2007 2008Steamboat 531 748 693 913 462Summit County 1,207 1,105 1,596 1,094 657Park City 1,185 1,883 1,464 1,166 675Sun Valley 589 524 369 327 187Telluride 173 191 95 96 102Jackson Hole 273 343 334 294 166Vail 1,184 1,577 1,254 1,317 628

Annual absorption rateArea 2004 2005 2006 2007 2008Steamboat 72% 197% 113% 164% 46%Summit County 63% 286% 89% 133% 98%Park City 112% 308% 172% 89% 44%Sun Valley 97% 81% 42% 33% 26%Telluride 67% 75% 49% 35% 27%Jackson Hole 87% 149% 150% 153% 58%Vail 148% 292% 162% 150% 94%

Average priceArea 2004 2005 2006 2007 2008Steamboat $350,803 $383,919 $399,999 $557,889 $546,938Summit County $277,212 $231,605 $359,826 $510,464 $588,167Park City $398,915 $494,247 $716,904 $821,691 $895,300Sun Valley $520,292 $729,065 $744,391 $819,057 $742,713Telluride $1,359,620 $776,039 $1,175,450 $1,494,477 $1,313,110Jackson Hole $743,012 $973,874 $1,089,171 $1,311,817 $1,708,098Vail $697,614 $695,060 $891,494 $1,168,917 $1,447,199

Source: Doug Labor, broker-owner of Buyer’s Resource Real Estate and manager of MLS statistics

Q1 Q2 Q3 Q42005

Q1 Q2 Q3 Q42006

Q1 Q2 Q3 Q42007

Q1 Q2 Q3 Q42008

Q1 Q22009

Source: Doug Labor, broker-owner of Buyer’s Resource Real Estate and manager of MLS statistics

There are about 2,300 real estate listings on the Steamboat MLS. At a rate of about 320 sales predicted for this year, it would take more than seven years to clear the inventory.

As the market has slowed from an historic high, a gap between high supply and low demand could demonstrate a correction in drastically appreciated real estate prices, some Realtors said.

In the first quarter of this year, the Steamboat MLS recorded 59 sales, the lowest number in records dating back to 1995.

At the height of the Steamboat Springs real estate market, supply of listings and demand for sales caused prices to increase and the absorption rate to pick up pace.

6 | Friday, August 28, 2009 A Supplement to the Steamboat Pilot & Today House of Cards

The first quarter of any year tra-ditionally is the slowest for real estate transactions, Labor said; the third quarter comes in first, followed by the fourth and then the second. From 2003 to 2008, the first quarter averaged 268 sales. In the first quarter of 2009, there were 59, Labor said.

Sometime in the third or fourth quarter of 2008, prices in certain sectors started to drop, Baldinger said. When prices come down, buyers start to bite. He and Metzler said buyers might be slow to return out of caution.

“This is a hard and deep enough time financially for the whole country that people are going to be very careful, and that’s really the bottom line. Banks are being … extremely conservative, buy-ers are being conservative, and they’re just moving slower. They’re still coming, they’re just moving slower,” Metzler said.

Steamboat and the outside worldNationally, there have been some

signs of a pending recovery in the econ-omy and the housing market.

Just this week, there was news that housing prices in 18 of 20 major U.S. cities increased 1.4 percent in June, marking the first time the S&P/Case-Shiller index increased two months in a row since mid-2006. Consumer confi-dence also increased in August after two months of decline.

On Aug. 12, representatives of the Federal Reserve Board expressed con-fidence in the health of the national economy. The Fed extended its low short-term interest rate, predicted inflation would stay under control, announced an October ending date to its program aimed at buying $300 billion in Treasury bonds, and said it planned to continue a plan to buy $1.25 trillion of “agency mortgage-backed securities.”

July’s trade deficit numbers also were released Aug. 12, showing an increase in imports and exports, with the gap increasing from $26 billion to $27 bil-lion. The increase could signal strength-ening global markets.

Although national new-home con-struction and permits dropped slightly in July, single-family home construc-tion grew, as did the number of permits issued for single-family homes.

Local financial analysts and those involved in the Steamboat Springs real estate market list macroeconomic fac-tors, including consumer confidence, stock market strength and available wealth, as cues for rebounding demand in the Steamboat Springs housing mar-ket.

Labor said second-home owners, retirees and location-neutral business owners were key demographics of the mid-2000s housing boom.

In Harry S. Dent’s “The Roaring 2000s,” a book about demographics, the author predicts baby boomers will drive vacation home demand until 2013; Labor said the retirement demand from the same population could hold those highs steady through 2026.

“The kind of underlying factor … that has been fueling our market, prior to this recession, has been the baby boomer population, and I still feel that interest from baby boomers is still out there, but they’re waiting for their own personal finances or positive news,” he said.

Elizabeth “E.A.” Black — a consul-tant specializing in financial literacy who has worked with Millennium Bank and the Yampa Valley Housing Authority — said consumer confidence has to come back in major markets for Steamboat to see the kind of rebound it might hope for.

“Everyone is nervous and they don’t know what to do, so they’re not doing anything. … I just think it’s going to take time,” Black said in mid-July. Much of the money that fueled second homes and other big-ticket items has dried up, she said.

“All of these financial services people made a lot of money, and they were the kind of people who came to resort com-munities throughout the country, and that’s why I think it’s going to take us a little longer to recover,” Black said.

Differing paths forwardSteven Hofman — who served as

an assistant secretary of labor under President George H.W. Bush and is a former director of research and policy for the Republican leadership of the U.S. House of Representatives — moved to Steamboat Springs in December 2008 after buying his land in the Dakota Ridge neighborhood in 2000. A “kids ski free” ad first brought Hofman and his family on vacation here in 1994, he said.

He sees the recent low volume of this resort-town housing market the same way one might look at a place where the sole industry has rusted away.

“Because housing is such a large segment of the economy … (it’s like) you had the equivalent of a base clos-ing, that you’re a one-plant town and that plant has just closed,” Hofman said.

When Hofman talks about the market he thinks drove the mid-2000s housing boom here, he can’t help but think about baseball.

In the new Yankee Stadium there is a cluster of seats — a top-of-the-line infield section with perfect views of home plate where seats at one point sold for $2,500 apiece — where hardly anyone sits.

“That stadium was built for an

economy that existed two years ago,” said Hofman, now a corporate busi-ness strategy advisor who enjoys going to see the Yankees play but would never consider buying a $2,500 ticket.

“People created all of this luxury product for an economy that no longer exists,” Hofman said. “The same thing applies to a lot of the construction that happened here in Steamboat.”

Looking out from his front porch in Dakota Ridge, Hofman can point in almost any direction and land on a house that’s on the market. Some of them were built on speculation during the boom, and others have gone on sale since the national recession began. Hofman expects all of them to be empty for a while longer.

Scott Ford is a financial consultant who moved to Steamboat Springs in the early 1990s and has worked with the Steamboat Springs Chamber Resort Association, Steamboat Springs School District and Colorado Mountain College’s Small Business Resource Center. He acknowledges the hit on Steamboat from the rest of the econ-omy, but is optimistic about affluence making its way back to the mountains.

On the recovery side of an economy, a recession creates catalytic events in people’s lives, he said.

“On the upside of this recession, we will grow and we will grow

Inflation: Sustained, rapid increase in the general price level, as mea-sured by some broad index number of prices (such as Consumer Price Index) over months or years, and mirrored in the corresponding decreasing purchasing power of the currency. ... There is no one single, universally accepted cause of inflation, and the modern economic theory

describes three types of inflation: (1) Cost-push inflation is due to wage increases that cause businesses to increase prices to cover higher labor costs, which leads to demand for still higher wages (the wage-price spiral), (2) Demand-pull inflation results from increasing consumer demand financed by easier availability of credit; (3) Monetary inflation

caused by the expansion in money supply (due to printing of more money by a government to cover its deficits).

Source: BusinessDictionary.com.

JOHN F. RUSSELL/STAFF

Steven Hofman expects the future Steamboat Springs economy to look a lot different than the one that led to unprecedented real estate sales in the mid-2000s.

Continued from page 4

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A Supplement to the Steamboat Pilot & Today Friday, August 28, 2009 | 7House of Cards

more affluent,” Ford said. Finding a “new normal” could take time, he said, but Ford expects a return in con-sumer spending, followed by a return in real estate volume, then a return in construction. Since retiring, Ford has worked on the Community Indicators Project and the Routt County Livability Index.

What Hofman sees happening on a national scale is not a typical reces-sion, but a shift from one business model to the next. Hofman said it’s a change that will move the weight of productivity from the financial sec-tor to a to-be-determined area of the economy, and it will need at least 10 years to solidify.

“In my judgment, the era of the 8,000-square-foot home and all the economic activity that is thrown off of that is over,” he said. An employee in any economic sector creates an average $6 or $7 of economic activity for each dollar he or she is paid, Hofman said.

“When you have a huge sector of our local economy that’s a fraction of what it was, then you’re taking away six to seven times the productivity,” Hofman said. Those who represented a thriving affluent class drove much of that activity, he said.

“People will come here who want to live here, but a lot of what drove the economic activity was build it and they will come — people are not going to be coming because they can’t afford it,” Hofman said.

Ford said that although some people

might not be as wealthy as they used to be, he thinks a market for second-home owners and location-neutral business-people remains in mountain towns. Steamboat will get its share, he said.

“I think we’ll see our development continue to be driven by individu-als who will make the decision that because of the amenities in this com-munity, ‘I will move to Steamboat,’” Ford said.

The signs of recoveryMetzler points to property show-

ings as his No. 1 indicator of return-ing business for Colorado Group Realty.

“We are seeing an increase in show-ings in some of our areas,” he said in mid-August. He said that spike could be attributed to August being a tradi-tionally strong month, or it could be the start of a turnaround.

In early August, Metzler showed homes to interested second-home buyers who said they weren’t looking in 2008 because their business back home was down. In early August 2009, those buyers said business had picked up, he said.

Doug Labor, whose Buyer’s Resource works exclusively with buy-ers, looks for increased Web site hits, phone calls and general inquiries to gauge his office’s volume. He also checks tourism and skier visit num-bers for signs of the economic situa-tion across the country.

“Because we only represent buyers, we are seeing some half-decent activ-

ity with our Web site hits, which leads me to believe there are a lot of people circling the area, circling the market from a distance, and they’re just wait-ing to see some positive indication of things turning around,” he said.

Steve Downs, a Steamboat Village Brokers agent who has been selling real estate in Steamboat for 34 years, said there are elements of the market here that could help insulate it from macroeconomic factors.

Compared to larger areas, not as many people bought on speculation, he said. Families invested in multi-generational second homes, giving those properties a degree of stabil-ity. Resort-minded buyers viewed Steamboat as a value, and for years came here as other markets sold out, he said.

“You don’t know the bottom of the market until it starts to go up — well, has the market turned and started back up? No, that would be a lie, and people are waiting,” Downs said in mid-July.

Labor said the bottom could be an emotional point — when “every arti-cle you read, every newscast you turn to, every report that anyone’s aware of, and it’s all bad news.”

“The tricky thing with that is you never know you’ve hit the bottom until six months after the fact,” Labor said.

Prices per square foot for single-family homes in Steamboat Springs are lower now than they were in 2008, according to Colorado Group Realty’s 2009 mid-year market statistics. The report includes numbers for the

Economic diversity: Varying the industries and labor force demograph-ics in an area to provide greater strength in a local economy.

Source: Steamboat Pilot & Today

Location-neutral business: A business in any field, including produc-tion, technology or consulting, that does not rely on the local economy for its operation. Often small operations in which employees conduct business by computer or phone.

For moreFor more photos from Part 5 of the Steamboat Pilot & Today’s special section House of Cards, visit www.steamboatpilot.com/houseofcards.

Price per square foot for a single-family home in Routt County $1,000

$800

$600

$400

$200

$0

Low price

Average price

High price

Downtown/Fish Creek Mountain Area West of Steamboat Hayden Stagecoach North Routt

2007

(2nd

half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

2007

(2nd

half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

2007

(2nd

half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

2007

(2nd

half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

2007

(2nd

half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

2007

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half)

2008

(1st

half)

2008

(2nd

half)

2009

(1st

half)

Source: Colorado Group Realty

Continued from page 6

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“Because we only represent buyers, we are seeing some half-decent activity with our Web site hits, which leads me to believe there are a lot of people circling the area, circling the market from a distance, and they’re just waiting to see some positive indication of things turning around.”

Doug LaborBroker-owner of Buyer’s Resource Real Estate and manager of MLS statistics

8 | Friday, August 28, 2009 A Supplement to the Steamboat Pilot & Today House of Cards

first half and second half of each year since 2007.

Average price-per-square foot of a single-family home in downtown or the Fish Creek Falls area during the first half of this year was $314, according to the report.

That number was $383 in the sec-ond half of 2008, $405 in the first half of 2008.

Incubating businessesEntrepreneur and software devel-

oper Jens Owen sees opportunity in decreased or corrected home prices.

A Steamboat Springs resident since 1994, Owen has started, grown and sold two location-neutral technol-ogy companies: Precision Insight and Tungsten Graphics. When it came time to look at starting a third business, Owen wanted to reach a broader audi-ence, he said.

By early fall, he hopes to open the doors of the Storm Peak Innovation Center, an incubator for location-neu-tral technology businesses. Owen pur-chased space for the incubator’s head-quarters on the 10th Street side of The Victoria in June 2008. The first 10- to 12-week incubator session is scheduled to start in January 2010.

He has worked with Noreen Moore, business resource director for the Routt County Economic Development Cooperative, to create networking opportunities for technology profes-sionals in the Yampa Valley.

Increased access to the Internet has allowed more opportunity for com-puter-based workers to live here, Owen said. Decreased home prices help make a career move to a resort town more plausible.

“Timing-wise, as prices were going up from a housing (standpoint), we were kind of getting close to edging ourselves out of the market or the opportunity,” Owen said.

Things were still pretty strong for software professionals as recently as summer 2008, he said, but some of those workers might now be looking for new opportunities.

“At the same time the economic slowdown has allowed for some really good talent to become available,” he said.

Inside the incubator, Owen plans to have a digital media gallery; a glass-walled conference room; a flexible workspace; and a coffeehouse-style meeting area.

The idea is fashioned off TechStars, a technology business incubator that runs summer programs in Boulder and Cambridge, Mass., and includes seed money, mentoring and networking opportunities.

Participating business founders will be required to come to Steamboat for their incubation session, and after that, are free to distribute around the world, Owen said. He suspects at least some of those businessmen will stay; his last business, Tungsten Graphics, employed 18 people, with three living

in Steamboat, five scattered around the U.S. and 10 based overseas. He thinks incubator clients will tend to stick around and keep businesses in Steamboat, though it’s not a require-ment, he said.

“It’s going to be a natural evolu-tion for many of the entrepreneurs to want to continue to be based out of Steamboat,” Owen said.

Randy Rudasics, manager of the Bogue Enterprise Center at Colorado Mountain College and volunteer small-business counselor for SCORE, said local construction and real estate have softened in the recession.

“I’ve seen several people come through in the past year who were real estate agents who wanted help putting together a small-business plan, but almost all of them kept their license,” Rudasics said. Most of those enter-prises have been one- or two-person projects that are unlikely to add more employees, he said.

In the next three to five years, Rudasics expects to see a diminished available labor pool and skill set in professional areas, especially those related to the construction industry.

“My concern is that some skilled labor has left the valley because there wasn’t any opportunity here recently, and when some of that opportunity comes back, we will have a tough time recruiting folks

here for all the traditional reasons: cost of living, confidence in the long-term economy, things like that,” Rudasics said.

E.A. Black, the consultant and financial literacy teacher, said econom-ic diversity — be it through Owen’s location-neutral businesses, Hofman’s new business model, or a return of construction and real estate — will

help expand and strengthen the eco-nomic base.

As the number of people with high incomes has dropped, Black said it’s hard to say when Steamboat Springs will pull out of its economic slump.

“We need consumer confidence, stability and certainty, job growth and time … and hopefully time will heal our financial wounds,” she said. ❖

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JOHN F. RUSSELL/STAFF

Randy Rudasics, SCORE volunteer and manager of the Bogue Enterprise Center, has seen some traffic at the Colorado Mountain College’s Small Business Center. Below: Jens Owen, a technological developer who lives in Steamboat, plans to open an incubator in downtown where he will hold sessions helping people start location-neutral businesses. The space also will serve as a meeting place where this new generation of businesspeople can hold meetings and share ideas.