A diverse economy and a more tempered housing market haven’t spared metro Denver from the fury of the national recession, but the city is still holding up better than most places.
Denver ranked 39th among the nation’s 100 largest metro areas for its overall economic performance during the current economic downturn, according to a study from the Brookings Institution in Washington, D.C.
The study, out today, looks at changes in employment growth, the unemployment rate, gross metropolitan product and housing prices through the first quarter of 2009.
“It isn’t necessarily a case of who is doing the best, but who is doing less worse,” said Patty Silverstein, an economist with Development Research Partners in Littleton.
In any recession, certain cities fare better than others based on the mix of industries that provide jobs. But the housing slump has caused wider-than-usual variations in this recession, which officially started in December 2007.
“Metro areas heavy in auto manufacturing, financial services and retail have lost a lot of jobs and lot of output,” said Alan Berube, one of the study’s authors. So too have tourism- dependent areas such as Las Vegas and Orlando, Fla.
Areas more concentrated in energy, health care and education have done better, especially if they avoided the double-digit run-up in home prices prior to the housing-market collapse.
In Stockton, Calif., home prices have fallen 30 percent in the past year, while they are up 4.7 percent in Houston, which ranked third for overall performance.
Unemployment ranged from 5.1 percent in Provo, Utah, to 17.5 percent in Modesto, Calif. Portland, Ore., suffered the sharpest rise in unemployment during the past year, climbing 6.6 percentage points through March.
Within the mountain region, Albuquerque did best, ranking 15th. Denver, Colorado Springs and Salt Lake City ran in the middle of the pack.
Las Vegas, Phoenix, Tucson and Boise City, Idaho, were in the bottom half.
Denver is somewhat of an anomaly, Berube said. It ranked 21st in annual home-price changes, which rose 1.7 percent from the first quarter of 2008, compared with a 6.3 percent decline nationally.
But in terms of foreclosed properties, it ranked 76th among metro areas — with 3.9 of every 1,000 homes in the hands of a lender, compared with 3.06 nationally.
Through last summer, it seemed Colorado and metro Denver might skate past the worst part of the recession, Silverstein said.
“Our slowdown was not nearly as steep as what was happening at the national level — until the first quarter,” Silverstein said.
When the full brunt of the recession finally came to Colorado, it hit hard, something Silverstein attributes to a sharp pullback in commercial-construction activity as credit dried up.
That took a heavy toll on construction jobs. But the slowdown translated into losses in architectural, engineering and other professional-service jobs concentrated in Denver. The drop in prices for oil, natural gas and other commodities didn’t help.
Detroit was the hardest hit of any metro area, not entirely unexpected given its heavy concentration of auto-manufacturing jobs. Of the next nine hardest-hit areas, six were in Florida, two in California and one in Ohio.
Of the top 10-performing metro economies, five were in Texas, led by No. 1 San Antonio; two were in Oklahoma.
That raises an interesting question. Could this recession create a reverse “Grapes of Wrath” of the Great Depression, with people leaving California to work in Oklahoma or Texas?
So far, migration has been limited in this downturn, although that could change if it drags on.
Many people who might otherwise want to move are trapped in homes they can’t afford to sell, Berube said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
