Recession: Talk of the town ’09

A construction worker hangs a pipe for the electrical system at a new PRO-Build retail area and showroom under construction at 2779 D Road in this February, 2009, file photo. The construction store opened the doors to its new showroom in July, despite the lingering effects of the recession.

Although the national economy began to crumble in the previous year, 2009 will forever be remembered as the year Mesa County slid along with the rest of the country into one of the worst recessions in United States history.

The oil and gas industry, which had been booming most of the decade, scaled back dramatically, reducing the drill rigs in use and the people needed to work the rigs and service them. The ripple effect hit Garfield and Mesa counties hard. As energy jobs dried up, other jobs began disappearing, too. In particular, the thriving construction industry slowed to a crawl.

Sales tax revenue for Grand Junction and Mesa County went into its greatest decline since the oil shale bust more than 25 years ago, as spooked buyers kept a firm grip on their wallets and purses.

Mesa County unemployment, which peaked at 4.6 percent in 2008, crested above 9 percent in July this year. Home values decreased, and still real estate agents struggled to make a sale. People lost jobs and homes, and some left town.

The local job market flip-flopped from the 2008 trend of a long list of jobs and a short list of candidates, according to Mesa County Workforce Center Supervisor Gilbert Lujan. The health care sector was the only industry to eke out a steady stream of jobs, Lujan said.

The unemployment rate decreased incrementally after July, but Lujan doubts it was for the right reasons.

“At the same time, the labor force number has reduced quite dramatically,” he said. “That tells us either there’s a lot of people moving, going back to school full-time, or people are just giving up because they haven’t been able to find anything.”

The economic downturn afforded at least one person a new job. Amy Case, who began work with the Grand Junction Housing Authority 14 months ago, began working as a home ownership coordinator in early 2009. The housing authority hadn’t offered Housing and Urban Development-approved foreclosure prevention counseling for awhile, but brought the service back this year.

Foreclosures more than doubled between the first and third quarters of 2009, but Case said she expects the worst of the foreclosure storm is hitting Grand Junction now.

Because of people using a couple months of savings to pay for a mortgage after a layoff, and with at least three months of mortgage nonpayment needed before a bank will consider adding another home to a growing list of foreclosures, Case predicts the bulk of foreclosure filings will hit this month, five months after unemployment hit a peak locally. Each foreclosure notice includes information about contacting a counselor. Extra advertising isn’t necessary to keep Case busy.

“About 12 people a week call, and that’s with almost zero marketing effort,” she said.
In the same office as Case,  Lori Rosendahl, the housing authority’s director of operations,  oversees a list of 2,400 people waiting for vouchers that will allow them to pay reduced rent on apartments and homes in the Grand Valley. The list is usually closer to 1,400 names long, and Rosendahl said she
hasn’t been able to move anyone off the waiting list since October 2008.

About 30 percent of the people on the list told Rosendahl they were homeless, up from 25 percent of applicants in 2008.

“A lot of that was because of low vacancy,” Rosendahl said of the 2008 figure. “Now it’s because they can’t afford the rent.”

Approximately 900 families have housing vouchers at this time. Rosendahl hopes to offer at least 910 housing vouchers next year, plus 35 vouchers for homeless veterans. As for the waiting list, she expects it to grow.

Families that can’t get a voucher occasionally end up at Homeward Bound Homeless Shelter. But even there people are sometimes turned away.

Gi Moon, the shelter’s executive director, said the shelter has been at capacity — 90 people, plus anyone under the age of 3 — pretty much every night this year. The shelter has been bursting at the seams since the beginning of last winter, she said, prompting the shelter to consider a 5,000-square-foot expansion. Moon said she plans to start an “aggressive campaign” for the expansion soon.

Even the churches that take in homeless after the shelter hits capacity are filling up at night, Moon said. A family stability program funded through Mesa County has helped 17 families get short-term rental assistance to keep them from having to stay at the shelter, and the new Home Now program helps renters with one-time payments such as deposits.

As hard as it has been on people trying to get into a warm place to call their own, the economy hasn’t gone easy on people selling homes, either. According to the Colorado Association of Realtors, local real estate agents sold 1,313 homes in the first three quarters of 2009, down from 2,331 in the first three quarters of 2008.

It wasn’t for lack of supply, which outweighed last year’s listings each month of 2009. As of mid-December, 1,981 homes were on the Grand Junction market, compared to 1,839 a year ago.

With 2,065 homes on the market in November, Erika Doyle,  Grand Junction Area Realtor Association chairwoman, sees the month-to-month drop as a “glimmer of hope” that the local market has hit its bottom. Inventory has decreased for five consecutive months, she said.

Doyle said tax credits, low interest rates and price adjustments have helped the market, but it may take a couple years to follow the nationwide trend back to a healthy market.

“Nationally, the conservative estimation is that there will be a 3 to 5 percent boost in prices,” Doyle said. “A lot of the price fear factor should be going away in 2010.”

Few economic forecasters have hope for the first quarter of 2010. But some see recovery blossoming by this time next year. Grand Junction Area Chamber of Commerce Executive Director Diane Schwenke predicts people will feel more secure in their jobs and begin to spend more money as early as May or as late as August. New jobs may follow a quarter or two behind that upswing in spending, she said.

“Historically, recessions don’t last more than 18 to 24 months,” Schwenke said. “The one in the early ’90s we mirrored almost exactly, just six months behind.”

Ann Driggers, president and chief executive officer of the Grand Junction Economic Partnership, 
said a flurry of businesses are considering expansion or relocation in Grand Junction. Calls to GJEP were up in October and November.

“Our city has a bright future,” she said. “Cabela’s, for instance; the fact that they only announced expansion to two places in 2009, and Grand Junction was one, that’s huge.”

A job forecast by economic research firm Moody’s projects the total number of people on payrolls for full-time or part-time work will increase by 0.3 percent in Colorado from the third quarter of 2008 to the third quarter of 2009. But Moody’s predicts Grand Junction’s payroll count will decrease by 0.8 percent, and the United States’ payroll count will drop 0.5 percent over the same period.

Grand Junction’s biggest drops are predicted to come in the natural resources and mining industry (7 percent drop), construction (3.5 percent drop) and financial activities jobs (3.5 percent).

The greatest gains are predicted in “other” services (3.8 percent growth), education and health services (1.2 percent) and wholesale trade (1.1 percent).


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