New Mexico and Albuquerque area employment

The state and local economies continue to do better than the national economy -- although it is clear we have slowed down.

New Mexico's March unemployment figure is 3.7%, far better than the national figure of 5.1%. One year ago, the rate was exactly the same. Albuquerque's rate is 3.8%. Again, far better than the national average but up slightly from the 3.4% for March of 2007.

Job growth for the state is just .06% this March while for Albuquerque the figure was .08%.

The bottom line? We seemed to have kept most of the gains of the last few years -- but growth at the moment is not significant enough to overcome the national housing problems.

March Housing Starts - Albuquerque & Rio Rancho

Same news as February -- and, again, that is good news for homeowners.

Permits were down 40% for this March vs. March of '07.

Why good news? Less competition for sellers of existing homes.

Housing Starts in Albuquerque Area

They are way down (20% for Feb of '08 vs. Feb. of '07), of course. And, that is good news. Fewer new homes means less inventory down the line and inventory remains one of the big problems in the market as we enter the spring/summer selling season.

More on Yesterday's Comment

Just a few hours after noting the loss of potential buyers in our market, Fannie Mae, the government loan insurer, raised the bar on which loans it will insure:

• It will no longer buy loans made to borrows with credit scores below 580.

• It will no longer buy mortgages made to borrowers who have lost a home due to foreclosure in the past 5 years. The previous limit was 4 years.

Unintended Consequences

I've been saying for some time that the Albuquerque/Rio Rancho market has been hurt more by external events than anything happening here. More confirmation: a lender who does a lot of business here in town (none of it was subprime) estimates that about 40% of potential buyers have vanished from the market due to the elimination of various types of loan programs. Again, I am not talking about the subprime loans that were not a major factor here. These are programs that performed well but were eliminated as the credit crunch devastated lender reserves.