Colorado Neighborhoods REAL ESTATE

It’s a Long Way to Fall

You won’t see it from the chairlifts. You won’t notice it window shopping in Vail or Beaver Creek. And it may not be apparent as you’re flipping through the glossy pages of this magazine. But we’d be glossing over reality not to report that ”Happy Valley” is in a funk. Like many areas – especially those relying largely on growth – huge swaths of our community have been hurting since 2008.

We’re in the mud,” says Ben Kleimer, an Avon real estate broker. “We’re in that period of time that, at some point – maybe a year and a half, two years from now – we’ll be able to look back on this and say oh, that was the bottom, that was brutal.”
Even four years into the slump, the topic remains tough for many residents to talk about. “To some extent, it’s mythical up here. We’re in the mountains. Things are supposed to be so ideal,” says builder Mike Guida, who lost his home to foreclosure. “When things turned south, it was like holy mackerel – it hit like a tsunami. I think people still don’t want to acknowledge what has happened here. It’s the story nobody wants to touch.”

“Up, up, up,”was the unofficial mantra as the Vail Valley transformed over a half-century from a minion of miners, sheep herders and lettuce farmers into a community driven by tourism and growth. The county’s population swelled by more than 25 percent from 2000 to 2010 with the promises of small-town living, world-class recreational amenities and plenty – always plenty – of work.
“Before 2008, anybody was able to get a job, even two jobs, up here just by being able to breathe on a mirror,” says Tsu Wolin-Brown, executive director of the Salvation Army in Avon.
Then the national economy crashed in 2008, triggering an almost immediate halt in new construction and local real estate transactions. Many locals figured it would be a temporary blip like the one they experienced after September 2001.
   “Everyone was anticipating a restart after three or four months,” Kleimer says. “So it was well into 2009 when people started to think, ‘Hey, maybe this is something more serious’, maybe the eternal optimism that was so pervasive here is no longer such an accurate view for everybody in the valley.”
For local bankers, brokers and folks working in tourism, optimism is their business.
“Things are pretty good,” Chris Romer, Executive Director of the Economic Council of Eagle Valley, assured me in March.
“Sales tax collections are up. Lodging and occupancy numbers are up. We’re coming off record skier numbers last season. Real estate is improving in terms of volume. Many of those matrixes are doing quite well,” he says.
Still, even Romer acknowledges, “The further the way from the tourism epicenter you are, the harder and harder it is.” What is it?
Statistically, Eagle County’s economic indices flew out of whack in late 2008 and have continued to flatline at a grim sort of “new normal.”
Unemployment here rose from 2.8 percent in 2007 to 8.7 percent in 2011 as the community officially lost 6,000 jobs (though probably closer to 9,000 or 10,000 jobs, some say, factoring in undocumented workers). Property values have dropped about 40 percent. Foreclosure filings have tripled and foreclosure sales have skyrocketed by 600 percent. County revenues have fallen by 30 percent, with the general fund expected to remain stagnant at least until 2015.
The Vail Valley Charitable Fund has doubled the number of direct-aide grants it gives families facing medical emergencies. And the Salvation Army is providing five times more local households with support for food, rent, transportation and utilities. People who were longtime donors to both charities have been coming in for help.
“It’s a real reversal of fortune kind of thing, right before our eyes,” Wolin-Brown says.
With the county’s workforce cut by nearly 14 percent, social services are strained. The Eagle County School District laid off about 70 staffers, including 50 teachers, after voters rejected a ballot measure that would have kept them in the classroom.
“There’s a side of this area tourists don’t see. What that looks like, for some segments of this community, is a real struggle every day to survive,” says Kathy Brendza, principal of New America High School, which serves mostly second-language students in Gypsum. About 88 percent of her kids are homeless, their parents having left the area – and, many, the country – since construction jobs were slashed.
Marian Cristian Baena is working as a cashier in a hamburger joint to pay for the room she rents with friends since her folks went back to Mexico 10 months ago. They won’t be here to see her flown into her graduation ceremony by helicopter like a rock star – an honor bestowed on her as the school’s valedictorian.
“It’s hard to stay here, but it was my decision,” she tells me. “I have dreams and goals, and I’m trying hard to complete them.”

“Slump” is a relative term.
For some in tonier areas such as Beaver Creek, Cordillera and Vail Village, the downturn means having to fly here on commercial –  rather than private jets or cutting back from four months of vacation time to two or three.
Local country clubs have strained to maintain memberships. And gated communities such as Arrowhead have struggled to keep amenities such as free shuttle services running at pre-2008 levels.
“The approach taken by those of us serving the vacation-home community is to act very much like nothing has changed,” says one of several high-end brokers who insisted on anonymity for this story.
For many year-rounders, the downturn has wreaked far more havoc.
Many builders, architects, engineers, plumbers, electricians, carpenters, roofers, tile-setters, landscapers and laborers who prospered from the boom of the 1990s have found themselves accepting remodeling work at a fraction of their old earnings, or without any construction work at all. Some are teaching skiing. Some are collecting unemployment. Some have packed up and moved away.
Joe Schwan co-owns a reprographic shop in Edwards. A drop in business from the construction bust caused him to find other employment.
“I hadn’t been out of work for 30 years,” says Schwan who at age 56 found a job at a school cafeteria and then selling cell phones at Costco. When interviewed for this story, he was applying for a home modification loan to avoid foreclosure.
When Mike Guida’s construction business stalled in 2008, he went back to college at age 59 to get certified to do energy performance analyses. About 75 percent of students at Colorado Mountain College are age 25 and over.
“I started out as a carpenter. I built things all my life. Then, overnight, it was gone. I didn’t know how to do anything else. Now I’m writing reports, audits. This is nothing near what I hoped for. It’s not what I dreamed,” he says.
Guida had built his own Craftsman-style home on the golf course at Eagle Ranch. He cut all his timber locally. His wife, Lisa, did all the finishes. Their house was appraised at $1.2 million in 2006, yet sold for $675,000 in foreclosure in 2011. He fights tears when discussing the day he and his family got booted out by their lender, Selene Finance.
“You work hard and you think you’ll be in in your house as long as you need. All your equity and sweat equity – you count on that. You never think that, bam, one day it’ll be gone,” says Guida, a founding member of the community’s Habitat for Humanity. “It doesn’t matter if you have $100 or $1 million. When you lose it, it’s kind of like a nightmare. Your faith is tested to the core.”

As county officials tell it, the foreclosure trend started in early 2009 as a resounding cry for help from hundreds of local homeowners desperate to keep their houses. After a year or two, the calls stopped coming when resignation set in.
“It used to be our phones would be ringing with people asking, ‘How can I make this work? How can I stay?’ Now there’s an eerie silence. When the calls do come, the question is ‘OK, when do I have to be out?’ You can hear the sense of defeat. Professionally, what I think that means is that things are not getting better,” says Chief Deputy Public Trustee Karla Herridge.
In working class neighborhoods – especially in the down-valley communities of Eagle and Gypsum – families have walked away from their homes, which often sit vacant and in disrepair until they’re foreclosed and banks finally get around to selling them.
Many owners who are able to hang on to their homes are underwater in their mortgages.
“When the house across the street from you is going for half of what you paid for yours, it causes some tension,” says Carol Wick, a teacher living in the Brush Creek Terrace subdivision in Eagle.
The upside is huge for buyers, especially first-timers who otherwise may not have been able to afford property here. Before the market fell, Katie Fiedler had been shopping around for what she calls a “one-bedroom dorm-room type of condo.”
“You know, the kind where you have to share a washing machine,” she says.
In a matter of months, the 20-something clothing shop manager was able to buy a two-bedroom condo in Eagle Vail with 50 percent more space and a washing machine of her own.
“I guess I got lucky with timing,” she says.
Eagle County Government also has taken advantage of the downturn by buying up open space it couldn’t otherwise have afforded. For the eight years after voters approved a mill levy for open space, the county sat on most of its revenues as property values soared. Once the market fell, it started snatching up open space parcels, including several on the Colorado and Eagle Rivers. That land will allow kayakers, rafters, duck-hunters and fishermen unprecedented public access.
“In some ways, it’s a silver-lining to an otherwise painful downturn,” says County Commissioner and open space booster Jon Stavney, who built homes before the crash.
Overwhelmingly, locals say they’re weathering the downturn by increasing time outdoors, which lured them here in the first place. After all, the bike paths, hiking and snowshoe trails and rivers are still free, for the most part. Property values may have plummeted, they say, but their access to the mountains is still priceless.
“Now I cycle 250 miles a week rather than going out to dinner and spending $300 on sushi. I’m skinnier and healthier for it,” says Kleimer, the real estate broker.
Dave Niewoonder tries to remind himself every day why he moved from the Front Range to Eagle County in 2005: From the window of his social studies classroom at Battle Mountain High School, he can see the slopes at Arrowhead.
Most days – especially when the snow has fallen, the sun is shining or the light is just right – he says it still seems worth it to have uprooted to the high country.
But some days, increasingly, he questions the move. Partly, it’s that his teaching wages are frozen, his class-sizes are growing and his workload is increasing so much that he doesn’t have time to ski or kayak like he had hoped. And partly, he didn’t anticipate the cost of services to be so high.
“The car mechanic, even the dentist can cost two- to three-times what they do on the Front Range. You don’t realize that stuff until you move here,” he says.
Mostly, Niewoonder’s disenchantment stems from his troubles keeping up with his adjustable-rate mortgage. When interviewed for this article, he had six weeks to find out whether his bank would modify his loan or kick him and his wife out of their home. These are stresses, he says, that not even the best mountain views can ease.

On any given Sunday at the First Evangelical Lutheran Church of Gypsum, there is an absence that’s increasingly difficult to ignore. A congregation that in 2003 had 140 weekly worshipers is down to about 30 regulars.
Attrition stems largely from the economy. Some churchgoers lost their work and moved away. Some have had to take jobs on the ski slopes or at the airport on Sundays. And some, quite simply, are shaken in their faith.
“People are so overwhelmed. They’ve lost homes, jobs and are wondering why this happened to them. There’s a sense of discouragement as far as the congregation goes. The spirit of things – the energy, the sense of community – wanes, even if it’s not directly verbalized,” says Kari Reiquam, who subsidizes her work as church pastor with a second job in a dress shop in Frisco.
At First Lutheran, having fewer parishioners means there are fewer volunteers to maintain the chapel and the parish hall. It means less tithing to meet church costs. And it means a diminished ability to carry out its ministries. The congregation used to serve five needy families a month with its food bank, and now is serving three. Its program to send young Tanzanian women to nursing school has withered, members say.
Parishioner Debra Ketterling counts herself lucky in that her job at an airport car rental and her husband’s jobs at a car dealership and car wash have been stable throughout the slump. Their two sons, both recent college grads, are living at home looking for work, as are many of their friends.
Ketterling, a 29-year area resident, worries about the vitality of her church and the future of a community in which “Up, up, up” seems absurdly out of touch. At times like these, she says, it’s disheartening to sit in worship every week wondering where everyone went.
“I was seeing one of our parishioners every Sunday, and it took several months before he said he had lost his job,” she says. “There’s a lot of shame around this. So you’ve got to wonder – if nobody wants to say anything, maybe everybody thinks they’re going through it alone.”