Foreclosure pinch ripples through region’s economy

Northern Colorado’s spiraling foreclosure rate is beginning to send ripples throughout the region’s economy, from the corner store to the local door mill.

That’s especially true in Weld County where, according to the Colorado Department of Housing, one of every 124 homes is in foreclosure.

Sure, homeowners feel the biggest fallout of homes snatched out from under them, but there are a host of retail and service businesses that are feeling the effects, too.

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Dan Stoos, president of Carpet Club in downtown Greeley, said it’s difficult for all businesses not to feel the brunt of so many homes in foreclosure.

“We have less walk-in traffic and less builder traffic. It’s not a dramatic impact, but it is an impact,” he said. What he’s lost in residential sales, however, is being made up with a slight increase in commercial sales.

Gayle Sanger, president of Mitchell’s Wall and Floor Covering Inc. in Evans, said she, too, has seen a drop in residential traffic as a result in the drop in new construction in the Greeley area. On the other hand, another family business, Turnkey Builders, is swamped finishing bank-owned houses.

Dan Miskey, manager of 84 Lumber in Greeley, which specializes in contractor sales, said his company is making a concerted effort to welcome homeowners choosing to remodel their present homes rather than build new. Decks and garages are popular do-it-yourself projects.

“We welcome everyone who walks in the door. If they need a piece of siding, we’ll find it for them. If we don’t have it in stock, we sure can order it,” he said.

A cold, snowy winter has had almost as big an impact for Greeley-area businesses as has foreclosures. “We had a very good spring,´ said Ed Holloway, manager of Moffat Paint & Glass.

Foreclosures have nonetheless had an impact on the store, which has been a Greeley fixture for generations. “The turnaround has slowed up on new construction. We’re still doing work on new construction, however,” Holloway said.

He added that he doesn’t see the current economic picture as all doom and gloom. “From our standpoint, we feel sad for a lot of people who have lost their homes and for our city. We’re hoping we get over this quick and that things look better.”

Moffat Paint & Glass has not had to let employees go, and is in fact in a hiring mode.

Only so many dollars

Chris Ruth, manager of Greeley’s Offen Ace Hardware, which is owned by her husband’s family, said they are definitely seeing the results of a tight economy, in part due to the building slowdown but also due to increased competition.

“There’s only so many dollars that anyone has to spend,” she said. “The effect of foreclosures on business is never good. Dollars and cents are not being circulated. If they don’t have money, they don’t spend it on frills.”

A sudden lark to repaint the living room – after seeing one of the TV decorating shows, for example – often is beat down by reality after homeowners discover a gallon of paint can cost $25 to $30 and that it would take two or more to finish the job. “Disposable money is not there,” Ruth said.

She also has noticed that the majority of customers now pay with credit cards. If one card is rejected because the credit limit has been met, most often the customer simply pulls out another card. “We’re living on tomorrow,” she said.

Emily Brown, sales representative at Merry Maids in Greeley, said late spring is the time of year when people – both families and students – are moving in and out of homes. “We’re not seeing an increase or decrease from years past,” she said of the number of cleaning jobs that such moves generate. And she hasn’t seen an increase in requests to clean foreclosed homes, which often are left in a state of disarray.

On the other hand, Matt Gallegos, financial officer of Gallegos Sanitation, based in Fort Collins and serving much of Northern Colorado, is definitely feeling the effect of homeowners and businesses struggling.

Gallegos said the biggest impact is in the number of nonpaying customers. “We have had to eat quite a bit,” Gallegos said of unpaid accounts.

Trying to collect often proves to be an exercise in futility. “When it comes to getting paid, we’re the last guys on the totem pole.” As a result, the company has tightened collection policies.

Illegal dumping has also increased, and many commercial clients are discovering their bins overflowing with residential refuse, which means increased costs to them to have it hauled away.

Decreased home building has also meant a decrease in construction trash that needs to be hauled off. “As building slows down, for haulers, that’s more business that will go away,´ said Gallegos.