By Arthur E. Foulkes, The Tribune-Star
arthur.foulkes@tribstar.com
TERRE HAUTE - The housing market may be the first sector of the local economy to suffer from the approaching loss of more than 600 jobs at Pfizer Inc. in Vigo County.
Many Pfizer employees who will be losing their jobs came to Terre Haute in the past few years to work on the company's new diabetes medicine, Exubera. If many of these people leave the area, the influx of new homes for sale could weaken an already sluggish local housing market, industry observers say.
"We've got a little bit of over supply right now but that's normal for this time of year," said Chip Miller, vice president at Prudential Newlin-Johnson Realtors. If many Exubera employees suddenly put their homes up for sale, "it could have an impact on us," he said.
"Real estate is like any other commodity; it's supply and demand," Miller said.
Higher priced homes in the area would be the most affected if Exubera workers leave in large numbers, industry observers said. Many people who took Exubera jobs came from other parts of the country where housing prices were significantly greater than in Terre Haute. This led some of them to buy homes priced well above average for the local area, they said.
Pfizer would not release figures for the salaries of Exubera employees, but the company's site leader for Terre Haute told the Tribune-Star in 2006 that the majority of Exubera positions would pay between $18 and $25 per hour. That was significantly more than the average Terre Haute wage in 2006 of $15.54 per hour, according to figures provided by the Indiana Department of Workforce Development.
Many Exubera workers bought homes in Terre Haute in the $250,000 to $500,000 price range, said Kyle Shoults, an appraiser with Gibson Appraisal Service in Terre Haute. Unless new industry moves to the area, "I'm not sure where you're going to find buyers" for homes in that price range, he said.
The housing market on Vigo County's south side - near the Pfizer plant - may be the hardest hit by the loss of Exubera jobs.
"We've got several" Exubera employees as residents, said Lisa Drake, a leasing agent for Cobblestone Crossings, Luella Crossing and the Garden Quarter, three neighborhoods just a few miles from Pfizer. Some of these residents already have said they plan to leave the area, Drake said.
Unsold homes on the market also could affect the home construction industry, Shoults said. If existing homes are readily available, the demand for newly constructed homes could suffer, he said.
The ripple effect of the loss of Exubera jobs could spread to other sectors of the economy that benefited from the influx of Exubera workers who bought cars, furniture and other goods from local businesses, Miller said. "Clearly it's going to impact us," he said.
The loss of Exubera will be felt outside Vigo County, said Kim Stevenson, regional analyst for the Indiana Department of Workforce Development in Terre Haute. "It's not just Terre Haute and Vigo County," Stevenson said. "It's going to hurt other counties, too. We need to think about that."
Pfizer hired workers both from outside the area and from inside Terre Haute, said Rick Chambers, a Pfizer spokesman. "We did hire locally as well."
The 660 Exubera employees losing their jobs are "very skilled, very talented folks," Chambers said. They are not likely to have a great deal of trouble finding other employment; but, they may not find it in the Terre Haute area, he said.
Pfizer received government approval to sell Exubera in the United States in January 2006; however, the inhaled diabetes drug experienced disappointing sales, leading Pfizer to halt production late last year. Exubera workers in Terre Haute have been on paid leave since the decision was announced last October.
While everyone seems to agree the short-term effects of the loss of Exubera jobs will be a shock to the local economy, some observers are more hopeful for the long term.
"The economy is very dynamic," Stevenson said. While the loss of Exubera is clearly a setback, "we hope things will look up and we'll move forward."
Miller, who started working in Terre Haute real estate more than 27 years ago, remembers when Columbia Records and other big local manufacturing employers closed up shop in the early 1980s. Terre Haute's economy recovered then and it should, eventually, recover again, he said.
"I'm not pessimistic about what's going to happen in the long run," Miller said. "I don't think you get anywhere being pessimistic. ...We're going to get through this."