Albuquerque Real Estate & Relocation

Ending the Year with a Thud...

2010-01-28T15:41:00.003-07:00

What a difference a year (or two) makes in New Mexico:

December '07: 3.5% unemployed
December '08: 4.7% unemployed
December '09: 8.3% unemployed

During the last year, 25,900 jobs were lost.

As usual, we are not alone (every state reported a decline in jobs) and the national unemployment rate finished the year in double digits -- an even 10%.

As you would expect, since the Albuquerque/Rio Rancho area is by far the largest in the state, most of the job loss happened here: 14,300. The big losers were manufacturing and construction.

Getting serious about water...

2010-01-11T13:13:00.000-07:00

A new ordinance taking effect in the City of Albuquerque will require sellers to install low-flow toilets before completing the sale. The ordinance went into effect on January 6, 2010 and applies to any structure built before 1994 and served by the Bernalillo County Water Authority under the jurisdiction of the city of Albuquerque.

This will obviously cause some hardship for sales -- but I am personally delighted that the city is continuing its focus on water conservation.

Bottomed Out?

2010-01-02T09:52:00.002-07:00

If anyone can think of a worse decade, please nominate it!

We started with the silliness of Y2K
Moved into the tragedy of 9/11
Got involved in two (still on-going) wars
Watched Enron and Tyco and others crash due to mis-management, greed and arrogance
Got smacked down hard by Wall Street greed and hubris...

...and we are still on one knee trying to get up off the canvas.

New Mexico Unemployment:
No change from October to November -- we remain at 7.8%.
Job growth was a negative 3.0% which translates into a loss of 25,400 jobs. That is easily the worst loss the state has seen since WWII.

Albuquerque/Rio Rancho Unemployment:
A minor drop from 8.1% in October to 8% in November.
Job growth was a negative 3.5% which translates into a loss of 13,900 jobs. That is a big chunk of the entire state's losses.

For the state and the local economy, the only consistent bright spots have been health services and government increases. Every other sector is in the tank at the moment.

And, with all of that -- we are still better off than more than 50% of the other states. Somehow I find very little satisfaction in that.

May I wish all of you a better year and decade -- one small step at a time as we climb out of this very deep hole.

Unemployment a Real Bone in Our Throat

2009-11-25T15:30:00.002-07:00

Unemployment continues to rise.

New Mexico's October rate was 7.9% -- up .2% over September. Over-the-year job 'growth' was -3.3% and that translated to a loss of about 27,800 jobs during the year. It is hard to recall that just two short years ago the unemployment rate was 3.5%.

The only areas of growth were health services, government and information (from our still-active movie industry).

Not to be outdone, Albuquerque's rate was even worse at 8.2% -- representing the same.2% increase see by the state as a whole. For the year, job losses totaled 14,800.

Only two areas showed growth in this region: health services and government.

Well, maybe...

2009-10-24T08:00:00.002-06:00

Business Week, using data from the Brookings Institution, has decided that Albuquerque is among the 40 cities that have been least effected by the recession. Another one of those 'depends on where you are' articles. One thing they did get right without question: all the noted cities had one thing in common - home prices that never got too high or too low.

But -- looking at the facts 'on the ground' the picture is not particularly cheerful.

New Mexico unemployment was 7.7% in September - up from 4.4% for the same month in '08.

Albuquerque/Rio Rancho unemployment was 8% -- up from 4.6% in September of '08.

That is the first time in my memory that this area has had higher unemployment numbers than the state as a whole.

Most worrisome is that job growth is at a 66-year low for the state with no real sign of a turn around yet. Were it not for increases in the government and health sectors, the numbers would be even worse.

House Construction

2009-10-12T16:52:00.003-06:00

My thanks to Michael Murphy, whose SalesTraq company keeps a close watch on home builders in the Albuquerque/Rio Rancho area. Here is his history of housing starts... not a pretty picture. (The data reflects each year through August):

1995 = 3,221 permits

1996 = 3,268 permits

1997 = 3,232 permits

1998 = 3,438 permits

1999 = 3,594 permits

2000 = 3,281 permits

2001 = 3,964 permits

2002 = 3,918 permits

2003 = 4,549 permits

2004 = 4,892 permits

2005 = 4,706 permits

2006 = 4,088 permits

2007 = 2,933 permits

2008 = 1,596 permits

2009 = 1,061 permits

And, as he points out... we have had the stimulus package in place this year. Ouch!

Moving in Lockstep - Wrong Direction

2009-09-26T08:31:00.002-06:00

The good news? New Mexico and Albuquerque/Rio Rancho continue to outperform the nation.

The bad news? That doesn't matter... we are deeply in the hole regardless of what the rest of the country is doing.

U.S. Unemployment Rate: 9.7% in August

New Mexico: 7.5%
Albuquerque/Rio Rancho: 7.4%

Year-To-Year Job Loss

New Mexico: 30,900
Albuquerque/Rio Rancho: 14,500

We have to go back to the mid-40's to find a similar decline in jobs. And, in a state where job growth is traditionally in the 1-2% range, it will take us a long time to get back to a level playing field.

July Unemployment

2009-08-29T05:04:00.002-06:00

Unfortunately no surprises -- not much change.

The percentages continue to look better than most of the country and continue to be lousy on an absolute basis. Both New Mexico as a whole and the Albuquerque/Rio Rancho data paint a picture of a work force that has a long way to go to return to normalcy.

New Mexico
2009 July unemployment was 7% -- up from 6.8% in June
2008 July unemployment was 4.2%

Albuquerque/Rio Rancho
2009 July unemployment was 6.8% -- the same as in June
2008 July unemployment was the same as the state as a whole: 4.2%

In both cases, the only sectors performing well are Education/Health Care and Government. All others are in negative territory. And that, of course, means none of the 'building blocks' for a sustained rebound are in place.

Some Good News

2009-08-26T05:19:00.002-06:00

Eclipse... the light jet company that went into bankruptcy earlier this year will be starting up again. Much smaller, but still plan on hiring back about 200 people by the end of the month.

Also, the US Forest Service will be adding/transferring about 140 additional jobs to Albuquerque in the near future.

Not Much Change In A Lousy Picture

2009-07-24T07:45:00.002-06:00

As I have kept saying, we may be doing better than most states but the unhappy fact is that New Mexico and Albuquerque/Rio Rancho are not climbing out of a very deep hole. New Mexico's overall rate of unemployment inched up again while Albuquerque/Rio Rancho's fell slightly. But, both are more than 2.5% higher than this time last year. And, were it not for two sectors (government and health care) the figures would be much worse.

New Mexico unemployment:

6.8% this June
6.5% in May
4.1% last June

Albuquerque/Rio Rancho unemployment:

6.8% this June
7.0% in May
4.1% last June

In 'real people' terms, that means 26,400 jobs have disappeared in the state, of which 10,700 were within the Albuquerque/Rio Rancho area.

It's Nasty Out There

2009-06-27T06:36:00.002-06:00

When you remove all the very accurate statements about 'everyone else is worse off', you are left with our reality: a steadily mounting percentage of unemployment and a level of negative job growth that has not been seen in 50+ years.

New Mexico's May unemployment level is 6.5%
May of 2008 was 4%
Job growth during the same time frame was a negative 2.4%

The Albuquerque/Rio Rancho area -- normally much better than the rest of the state -- isn't doing any better this time.

The unemployment rate was 7% this May.
May of 2008 was the same as the state's rate of 4%
Job growth(?) also is worse than the state as a whole at a negative 2.9%.

Yuck! Anyone who things we are out of the current recession is smoking a controlled substance.

You Should See the Other Guy...

2009-06-18T05:07:00.002-06:00

One more list that shows Albuquerque is terrific shape -- relative to the others.

The Brookings Institution looked at the nation's top 100 metropolitan areas and concluded that we had the 15th strongest economy during the first quarter of the year. Employment, unemployment rates, wages, gross metropolitan product, housing prices and foreclosure rates were all factored into the study.

But, like the vast majority of the cities in the study, we have not begun to turn the corner, just slowed the downward spiral. In fact, only one metro area (McAllen, TX) saw growth in both employment and gross output during the first quarter.

A long way to go....

Some Signs of Life

2009-06-07T06:37:00.002-06:00

Three glimmers of light in the midst of this murky economy:

UNM is starting a $23 million sceince/math building
General Mills has broken ground on a $100 million expansion
Solar Array's first phase (at $170 million) of construction is set for the fall

All mean construction jobs, of course, but also new hires at a time of true stagnation.

Unemployment Flattens Out

2009-05-30T06:09:00.002-06:00

Some good news for a change (beyond being a Kiplinger 'hot city'!). Unemployment may have peaked in the region, well below the national average.

New Mexico's rate for April was 5.8% -- a slight drop from March's 5.9%
Albuquerque/Rio Rancho looks even better. April shows 6.3% vs. 6.6% in March.

Both compare very favorably with the national average of 8.9% for April.

But, before turning cartwheels down the street, it is worth remembering two more sobering statistics:

Last year's April rate was 3.9% for the state and 3.7% for Albuquerque.
We continue to have negative job growth in both the state and the Albuquerque/Rio Rancho area. While that continues, not much hope for any sustained improvement.

A Good List to Rank High

2009-05-26T17:51:00.003-06:00

Have not seen one of these for awhile - probably because all cities ranked so low it was embarrassing :)...

Kiplinger's Personal Finance magazine has Albuquerque ranked #2 for its "10 Best Cities of 2009". It noted both our growing film industry and the success we have had attracting companies like Schott North America in the solar-energy industry.

Unemployment Inches UP -- Again

2009-04-26T08:51:00.002-06:00

No surprise... we continue to do better than the rest of the country. But, what we do have is about as bad as it has been for more than 50 years.

For the state as a whole:

Unemployment was 5.9% in March vs. 3.9% for March of '08.
Over-the-year job growth was (1.9%) and that translates into over 16,000 jobs lost.
1954 was the last time the state's job growth was this bad.
Just 2 of 13 industry classes posted gains: health care and government.

The Albuquerque/Rio Rancho picture is no prettier:

Unemployment was 6.6% in March vs. 3.8% a year ago.
Over-the-year job growth was (2%) -- subtracting 7,700 jobs from the local economy.
Just 3 of the job classes posted gains: health services, government and information (which is the classification for the growing film industry in the area).

And, believe it or not, our data puts us in a very favorable light vs. other states. We ranked 12th vs. other states. (Only three states and the District of Columbia were in positive territory.)

Yuck!

But you should see the other guy...

2009-03-26T17:01:00.002-06:00

Once again, employment figures for New Mexico and the Albuquerque/Rio Rancho area are less than thrilling... and far better than most. For February:

5.4% for New Mexico as a whole... up from 5.1% in January. Nationally the figure for February is 8.1%
Albuquerque/Rio Rancho lifted to 5.8% from 5.5% in January.

Job growth is the other area we are 'out-performing' most of the country:

Over-the-year job growth for the state was a negative 1.4%. Only six states reported any growth at all. But, again, for an area that normally has very little fluxuation, the past year has been worse than any in 17 years.
Albuquerque/Rio Rancho lost 4,800 jobs -- a drop of 1.2%.

February New Home Starts

2009-03-25T05:46:00.002-06:00

A small surprise... Rio Rancho permits rose 54% over January for a total of 93.

Albuquerque continued to lag. Only 31 permits were pulled for the entire city.

Most of the permits were for outlying subdivisions so sprawl is still happening... just at a slower pace. My guess is that trend will continue with the availability of up to $8,000 in stimulus money for a home buyer. That is certain to draw a number of first-time buyers into the market and many of those buyers will purchase entry level homes.

Looking Good (In Comparison)

2009-03-06T05:44:00.002-07:00

January unemployment statistics are finally out. (I suspect the short month is partly responsible for the delay -- as well as needing to fill requests from the legislative branch which is in the middle of its 60-day session.) As usual with statistics, how you look at them matters a great deal.

New Mexico's rate is 4.7% while the national rate is 7.6%.

Looks pretty good until you see the steadily increasing local numbers:

In January of '08, our rate was 3.8%.

Far more damaging, however, is the rate of job growth. Over the past year we are at a (1.0%). That is the first year of negative growth since 1991 -- more than 17 years ago.

The Albuquerque/Rio Rancho area unemployment data mirrors the state:

January '09 rate is 5.5%
January '08 was 3.7%
Job growth was (0.9%). That is the fourth month in a row of year-to-year negative numbers and the rate of decline has been accelerating.

Win Some... Lose Some

2009-03-03T16:36:00.000-07:00

Intel announced an additional 50 layoffs; Sprint is hiring 40 more. Both in Rio Rancho... but unfortunately not at the same wage level, I suspect.

January Housing Starts

2009-02-20T17:23:00.002-07:00

Not much to write home about... and I am sure that is no surprise to anyone.

The entire metro area totaled just 96 permits for January. That is better than December, when only 81 permits were requested. But, it is a far cry from January of '08 when 169 permits were obtained.

Stimulus Package

2009-02-17T16:26:00.000-07:00

Initial estimate is that the package will create 22,000 jobs in the state. Where and when, of course, are still to be determined. And, just as important as those two questions is the third one: longevity. If the jobs are temporary 'hits' for construction projects, for example, they will do nothing to address the confidence issue that I think is holding back everyone from purchasing any big ticket items.

Good News for a Change

2009-02-11T09:55:00.002-07:00

Intel just announced it will be spending $2.5 billion to upgrade its facilities in Rio Rancho. They intend to use the upgraded 'fab' to manufacture its next generation chip technology.

That is a stimulus package all by itself! From past history, once Intel decides to do something, they are very fast to get going. My guess is that most of that money will be spent in the next 12 months which means about 1,500 construction jobs will be added to the local economy. Since construction is one of the sectors that is hurting the most, that is welcome news indeed.

A Mostly Negative Picture

2009-02-01T10:30:00.002-07:00

The December unemployment picture isn't pretty. The only remotely positive statement that can be made is that we are (still) better off than most. While the national unemployment rate is now at 7.2%, New Mexico was 4.9% in December with Albuquerque/Rio Rancho at 5.3%

Sounds pretty good except that one year ago, the figures were 3.2% for New Mexico and 3.4% for Albuquerque/Rio Rancho.

The only areas of growth are in government and education/health services. (Statewide, mining is still showing growth but anticipated layoffs due to the drop in oil prices will erase those gains.)

Every other sector is showing negative numbers: manufacturing, construction, leisure & hospitality, retail, financial and transportation.

Not much to cheer about.

Still Better Off

2008-12-29T08:47:00.002-07:00

November's unemployment data shows that New Mexico (and Albuquerque) continue to dodge the worst of the recession. Albuquerque's unemployment rate for November was 4.4%. It actually dropped from October when the rate was 4.6%.

Next month, I will go into more details about individual sectors of the economy as I take a look at the full year's data.

Happy New Year everyone. It should (has?) to be better :).

How Low Can You Go?

2008-12-23T06:01:00.000-07:00

Housing starts for the metro area for November: 64.

A couple of years ago, that was a bad weekend's tally.

Not that it matters a whole lot, but the 'leader' is Albuquerque with 29, followed by Rio Rancho with 23.

And, WE are in GOOD shape!

2008-11-29T09:43:00.002-07:00

Every month, the employment picture looks bleaker when compared to the same month last year.

First, the entire state of New Mexico, comparing October '07 to October "08:

Job growth was .o1% -- the lowest in 17 years
Manufacturing (including the high-paying tech industry) lost 2,500 jobs
Construction lost 1,500 jobs
Leisure and hospitality shed 1,400 jobs
Financial services also lost -- a total of 700 jobs

Keeping us (barely) in the '+' column are:

Eduction and health services added 4,400 jobs
Mining (mainly exploration) added 1,000 jobs
Government added 1,900 jobs
Information (including our growing film industry) added just 100 jobs

When the focus is narrowed to just the Albuquerque area, the picture does not improve. Overall unemployment on a year-to-year basis increased from 3.3% to 4.6%. And, payroll employment fell a total of 1,500 jobs on a year-to-year basis.

Imagine what it must be like in one of the states with real problems!

Some Good News For A Change

2008-11-21T11:39:00.002-07:00

General Mills will be expanding its existing Albuquerque plant early next year. The $100 million addition will manufacture snack products. The current plant manufactures breakfast cereals.

When complete, the new facility will employ an additional 60 people. That isn't much in the grand scheme of things but the $100 million construction budget will be very welcome to a construction industry that has fallen on hard times lately.

Another Casualty of the Credit Crisis...

2008-11-13T19:55:00.002-07:00

...and this one hurts.

Eclipse Aviation Corporation, the first company to successfully navigate the technological maze and create a very light passenger jet, told its workers today that it could not pay checks for the period just ended on November 12th.

Eclipse has been seeking a loan of between $200-300 million. Not surprisingly, it has been unable to raise the funds.

New Mexico Unemployment - September Data

2008-10-25T17:18:00.002-06:00

Normally I give a synopsis of the data but this month the Employment News Release (of 10/23/08) appears to not believe the figures -- so I will quote instead:

New Mexico's seasonally adjusted enemployment rate was 4.0% in September 2008, down from 4.6% in August but up from 3.4% a year ago. The national rate was 6.1%. The state's unemployment rate drop in September likely resulted from a statistical sampling anomaly.

The New Mexico economy is weak but the national economy appears to be even weaker. New Mexico employment sectors with the closest ties to the national economy are among those that are underperforming.

Albuquerque's economy, being connected to the national economy through several large national employers, has started to lose jobs.

Not good news, to put it mildly.

When Bad News Is Good

2008-10-14T05:34:00.001-06:00

The foreclosure rate in Albuquerque rose to .9% in August... up from .5% in the same month of 2007. Once again, however, the national figure makes us look like the Belle of the Ball. The August rate for the nation was 4.4%.

Leave Us Alone -- Please!

2008-09-30T14:32:00.002-06:00

A long-running joke in this state is that many people (including some post offices around the country!) seem to think we are actually a part of Mexico. The latest unemployment figures for the state and Albuquerque/Rio Rancho make that look like a good idea.

We are still in far better shape than most. But, the economic sectors of our economy most closely tied to the national economy are the ones that are doing the worst. Manufacturing, financial and professional/business services are all underperforming.

The state's unemployment rate in August was 4.6% -- up from 3.4% last year.
Job growth stands at .06% -- an increase of 4,700 jobs from a year ago.

Albuquerque/Rio Rancho's unemployment rate was 4.7% -- up from 3.4% last year.
Over the year, employment has declined .2% -- a loss of 600 jobs. That is the first net loss we have suffered since 2002. Some of the winners and losers:
Construction lost 800 jobs.
Professional & business services lost 800 jobs.
Leisure and hospitality lost 400 jobs.
Government services added 1,200 jobs.
Education and health services added 1,100.
Information (where movie jobs are slotted) added 400 jobs.

Heading for the Basement

2008-09-23T15:40:00.002-06:00

The door slammed - hard - on home construction in the Albuquerque/Rio Rancho area in August.

A mere 76 permits were pulled in the metro market. That contrasts sharply with August of '07 when 272 permits were obtained.
The drop from July of '08 was just as dramatic... 196 permits were pulled last month.

Congratulations - Part II...

2008-09-21T05:26:00.001-06:00

How do you like owning the financial sector of the United States? Before you get too cheerful about that, remember you are going to pay a lot for something that is worth very little....

How much? Current 'worst case' scenarios are up to a trillion dollars. But, I think we have already reached that figure and then some. Fannie and Freddie guarantee more than $5 trillion and we own them. And now, of course, we are guaranteeing up to another $700 billion.

Where will you and I get the money. Print it, of course. And the last time I checked that was called inflation: Big time.

Congratulations...!!

2008-09-17T12:46:00.002-06:00

...you (and I and every other person in the U.S.) now own a very, very large chunk of Wall Street's financial sector:

Bear Stearns (We guarantee $30 billion)
IndyMac (FDIC insurance kicks in as bank fails)
Fannie Mae and Freddie Mac (government takeover... no matter what the spin)
AIG (same)

Cost to you and I and everyone else... depends on who is counting, of course, but if the tab is less than a couple of trillion(!) dollars I am going to be elated. And, very surprised....

Fannie and Freddie and You and I

2008-09-09T08:40:00.001-06:00

Following the 'take over' of the two mortgage giants, rates have fallen off the table. All the Fed's previous rate cuts are now acting on mortgage rates. That was the intention when the cuts were announced, of course. Rates did not fall due to fears of ongoing instability in the credit markets. (Which of course did happen.)
Now that we have stepped in to bail out Fannie and Freddie, we may see lower rates for awhile. Hey -- why not? We (all of us taxpayers) will be paying for the carnage... we might as well get something out of it.

We'll see...

2008-09-05T05:54:00.001-06:00

Forbes Magazine has been a consistent booster of Albuquerque and the latest comment from that direction is no exception. Job growth is projected to be 1.6% through 2012 (no mention of when that will start) and housing starts are going to be on the upswing by 2009.

Flatlining

2008-08-27T05:56:00.002-06:00

As I've been saying for months, we have missed the excesses of the subprime debacle. But our market is still very sluggish and there is a simple reason. Job growth is lousy. Unemployment remains below the national average but inches up every month. And job growth is essentially non-existent.

NM unemployment was 4.1% in July -- up from 3.9% in June
Albuquerque's figures are similar. 4.2% -- up from 4.0%
Job growth state wide is just .9% for the past year and most of the gains are in the energy intensive area of Farmington.
By contrast, Albuquerque's job growth for the past year is just about zero (.3%).

By far the biggest problem with our real estate market is a high inventory. No way are we going to reduce that with flat job growth.

Another Reason to Love New Mexico

2008-08-11T11:13:00.002-06:00

I've been saying that our market looks pretty good to a lot of others. How would you like to be selling in any of these:

-28.4% Las Vegas, NV
-28.3% Miami, FL
-26.5% Phoenix, AZ
-24.5% Los Angeles, CA
-23.2% San Diego, CA***
-22.9% San Francisco, CA
-20.2% Tampa, FL
-17.4% Detroit, MI
-15.4% Washington, DC
-14.8% Minneapolis, MN

The above are the markets with the sharpest declines over the past 12 months. Not a Top-10 list to join!

Just Before the 'Fall'

2008-08-08T05:53:00.002-06:00

Albuquerque's market was just beginning to cool off in the middle of last year. And, we were a few months from the financial markets melt down. So, looking at year-to-year for the 2nd quarter is interesting. It provides a pretty clear picture of the damage to our market caused by national events. All of the following compare April-June of 2008 vs. 2007:

Average price: (3.09%)
Sold properties: (27.83%)
New listings: (25.67%)
Days on Market: 71.79%

So, everything is negative but one -- Average Days on Market. But what remains remarkable to me is that in the current horrible national environment, Albuquerque performed the way it always has and avoided the excesses so apparent in other areas. (Would anyone like to try and sell a house in Phoenix?)

Good News in Low Numbers

2008-08-02T05:48:00.003-06:00

Housing starts continue to decline in Albuquerque/Rio Rancho. And, except for the builders and their tradespeople, that is good news. A major difficulty with our market at the moment is too much inventory so fewer new homes can only help.

Permits issued for the metro area (189 in June) were down 15.6% from May.
By contrast, June of '07 saw 605 permits issued.

Back to the Future

2008-07-31T09:25:00.002-06:00

Getting mortgage money has become much harder. That statement is true -- but only to a certain extent. What has really happened is that we have gone back to the type of lending practices that were the norm prior to the sub-prime debacle.

Seller-assisted programs that allow the seller to provide the down-payment for the buyer will be phased out on October 1st.
The number of investment properties a person may own and still get a conventional loan will be limited in the future.
A good credit score and documentation are now the norm.

Of course, other programs aimed primarily at first-time borrowers are not changing too much.

FHA will still allow gifts from the family to help a buyer with down payments and closing costs. The downpayment, however, will increase to 3.5% from 3%. And, the monthly MIP payment will depend on the borrower's credit score among other criteria.
NM-MFA (New Mexico Mortgage Finance Authority) remains largely unchanged. A buyer whose income is within the guidelines will find this type of loan very attractive.

Staying Out of the Deep End

2008-07-27T10:26:00.003-06:00

Economically, Albuquerque (and New Mexico) continue to do far better than the nation as a whole.

June's national unemployment rate was 5.5%
New Mexico's rate was 3.9%
Albuquerque's rate was 4.0%

Housing, of course, remains a huge problem around the country and foreclosures are a big part of the reason. Here again, we are in far better shape than most. I don't have a break out specifically for Albuquerque, but New Mexico continues to rank near the bottom.

In the second quarter, U.S. filings were up almost 121% over the second quarter of 2007 with 739,714 filings.
In contrast, New Mexico had 1,150 filings state wide. That is a 60% increase over the same quarter in 2007 -- but a 2.7% decrease from the first quarter of this year.
The states with the highest foreclosure rates: Nevada, California and Arizona all showed increases over the first quarter of this year.

Shadows and Substance

2008-07-11T05:30:00.002-06:00

For the past decade, New Mexico has made a concerted effort to attract films and production facilities. In the last three to five years, that effort has started to pay off. The latest 'maybe-perhaps-sounds-good-if real' is the announcement that Masque Entertainment will built a studio with eight sound stages and post-production facilities in Rio Rancho. The film business is notorious for brave announcements that quickly dissolve but if this one proves to have some substance it will be a big additional step in making New Mexico a serious option for West Coast productions.

And, speaking of substance, New Mexico continues to rank close to the bottom in foreclosures. The latest RealtyTrac has us ranking 37th among the states. Nevada, California and Arizona continue to lead the pack with West Virginia, South and North Dakota happy to be at the bottom of this particular list.

Credit Market Still Suffering

2008-07-08T05:37:00.002-06:00

Lots of not-so-good news on the mortgage front. Thornburg Mortgage, of course, has been the poster child for a well-run company that was caught in the credit fallout. Now, IndyMac has joined the list. On Monday, regulators concluded it was no longer 'well capitalized' but the company does not anticipate raising any capital in the current credit climate. Instead, it will cut about 53% of its work force and simply focus on servicing the loans it has already made.
Also yesterday, shares of Fannie Mae and Freddie Mac tumbled more than 18%. Lack of capital is again the culprit.

Economic Bits and Pieces

2008-06-30T14:45:00.002-06:00

Unemployment for May:
Both New Mexico as a whole and the Albuquerque area continue to best the national figures.

The state's unemployment rate is 3.8%, up from 3.5% in April. Last year at this time the rate was 3.6% so there has been very little deterioration.

The Albuquerque area, has slipped a little further to 3.8%. That is an increase of .4% from the same month last year.

Employment gains:

Again, the state is doing better than the Albuquerque area. Overall growth was 1.1% -- and that puts New Mexico in 9th place among all states.
By contrast, Albuquerque employment rose just .4% in May and only .5% during the last year. The leading sector (no surprise) is Educational and Health Services with a yearly increase of 1,600 jobs since May of '07.

Lose some -- win some:

We lost a lot of jobs at Intel a few months back... roughly 1,000 depending on who was counting. (The oldest chip fabricating plant was shut down.) About two weeks ago, Hewlett-Packard announced that it would be bringing 1,300 jobs to the Rio Rancho area. But, while the loss was immediate, the gain will take some time: site choice, design and construction will all have to take place prior to hiring.

Albuquerque Unemployment Rate Drops

2008-05-23T09:30:00.002-06:00

Another indication that our real estate market suffers more from perception than reality.

Unemployment for the state dropped to 3.5% in April -- down from 3.8% in March and also less than the 3.6% of April '07. The national average was 5.0% for April.

Albuquerque, at 3.5%, tied with the state figure. By far the most job growth was seen in the education and health services sector - a solid 3% during the last 12 months.

A Greener Albuquerque

2008-05-17T05:45:00.002-06:00

Hey -- who says the desert is mostly shades of brown :)? Albuquerque became the first city to sign a pledge to build a green economy.
The pledge commits the city to focus on 'green-collar' jobs: those contributing to preserving or enhancing environmental quality.

Foreclosures

2008-05-15T05:40:00.002-06:00

Another illustration of perception vs. reality. Foreclosures remain one of the driving forces in real estate markets all over the country. RealtyTrac's April report notes that filings were up 65% over April of '07.
New Mexico, however, remains relatively immune. We rank 37th in the nation. Worst hit: Nevada, California and Arizona.

Help with Mortgages

2008-05-08T04:51:00.002-06:00

New Mexico has far fewer problems with foreclosures than most states. But, for those needing help and assistance, there is a new program to offer counseling. The hotline will be set up soon and will run through September. The number is: 888-995-4673.

New Mexico and Albuquerque area employment

2008-04-26T08:44:00.002-06:00

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

2008-04-21T16:51:00.004-06:00

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

2008-04-07T05:33:00.002-06:00

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.

Unintended Consequences

2008-04-02T10:12:00.002-06:00

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.

More Reality vs. Perception

2008-03-27T16:47:00.002-06:00

New Mexico’s seasonally adjusted unemployment rate was 3.2 percent in February 2008, little changed from January’s record low of 3.1 percent. The national unemployment rate, currently 4.8 percent, remains higher than New Mexico’s. A year ago, the state’s unemployment rate stood at 3.8 percent.
Albuquerque’s seasonally adjusted unemployment rate was 3.3 percent in February, unchanged from January’s rate. Over the year, unemployment in the area has decreased three tenths of a percentage point from 3.6 percent.
So, why are we having so much difficulty with the housing market? Go figure....

Waiting On Data

2008-03-20T05:47:00.003-06:00

Still waiting on the February statistics from our association. I won't be surprised if we had less activity than in January. Every bit of news has been negative during the last few weeks and one of the lessons of the Albuquerque/Rio Rancho market is that for the first time this market is following the national market. And, fundamental to the problems with the economy is that NO one understands all the root causes of the meltdown -- and that is what is injecting an extra level of caution. A good quote from yesterday's financial articles: "Bubbles lead to busts. Busts lead to panics. And panics can lead to long, deep economic downturns, which is why the Fed has been taking unprecedented actions to restore confidence." (NY Times 3/19)

Albuquerque Unemployment Rate

2008-03-07T05:40:00.002-07:00

Once again, the difference between perception and reality is glaring. With the market in such bad shape you would think we had rising unemployment. In fact, January's rate was 3.3% -- down from 3.4% in December. One year ago, the rate was 3.8%. Go figure....

Seriously Good News

2008-03-06T16:06:00.002-07:00

With all the turmoil in the credit markets and loan programs disappearing overnight, the government backed mortgages have become critically important.

Today, FHA limits were raised for the Albuquerque/Rio Rancho area to $271,050. And, of course, FHA loans require only a 3% down payment. Keeping in mind that our average price is just about $220-230,000 on any given month, that will mean a lot of stability and less funds needed to close for a very big proportion of the local market.

Politics vs. ideology

2008-03-06T10:04:00.002-07:00

Politics (in this case defined as 'keeping your job') will shortly move the Bush administration to intervene in the markets. That may normally be a non-starter for conservatives... but, hey, this is an election year. So, the Fed chairman, Ben Bernanke, is suddenly calling for bankers to reduce mortgages for those in trouble and the administration raised limits on the volume of mortgages that can be Federally insured.
None of this is necessary in the Albuquerque/Rio Rancho area particularly -- except that anything that reduces the perception that the sky is falling will be welcome. More and more, I am convinced that this market - even though the local economy is sound -- will not recover while every economic indicator is down.

All real estate is local

2008-02-26T05:35:00.004-07:00

Once again, January figures show sales down all over the country. But, Albuquerque and Rio Rancho continue to defy the national statistics. Yes, this market is slower but it remains far more stable than others. I'm still assuming we will dodge the worst of the problems. And that most of what hits us will be due to the national psychology more than local conditions.

No Change on Limits

2008-02-18T05:41:00.002-07:00

The economic stimulus package now in place will not make a difference in Albuquerque and Rio Rancho, since all the loan 'caps' are based on local prices.

FHA limit is still $200,160
Conventional remains $417,000

Even for those areas that will see a rise, it will take a couple of months for the agencies to work out the numbers.

Albuquerque at Year's End

2008-02-13T05:40:00.002-07:00

Just finished writing my Market Update for the whole of '07. Looking forward, the big questions remain:
Will our local economy trump all the bad news from everywhere else?
Will the loss of loan programs (the good ones!) significantly reduce the number of buyers?
As the time-to-sell stretches out, will sellers start reducing their prices?

I've been selling housing for more than 18 years now and I have never seen a market that is so contrary to local conditions.

It's the Psychology...

2008-02-06T05:49:00.000-07:00

The famous mantra from the '92 election was, "It's the economy." Remembering that on every occasion propelled Clinton to the White House. Now, we have a screwed up national economy but a more-than-ok local economy in Albuquerque and Rio Rancho. It still remains to be seen which is more compelling in buyers' minds.

After 'The Game' -- the Market?

2008-02-04T05:37:00.000-07:00

Bad years or good, traditionally the Albuquerque & Rio Rancho markets are slow from late fall to the end of the Super Bowl. So, now we will find out if a good local economy and very low interest rates will be enough to counter the national credit problems.

Why Albuquerque Keeps Ducking the Worst

2008-01-29T15:45:00.000-07:00

I've been saying that New Mexico normally does better during economic downturns then the rest of the country. In fact, according to Lee Reynis, director of UNM's Bureau of Business and Economic Research, "We have almost never had a recession here.... Rarely does employment growth turn negative." If we were to follow the rest of the country into a recession, it would be the first time since the 1950's.

One other note: foreclosures in New Mexico were down 26% in 2007 vs. 2006. Just four other states followed our example: Oklahoma, Pennsylvania, South Carolina and Utah. At the other end of the spectrum: Texas, Colorado, Arizona and Nevada were among the top 10 in foreclosures.

I said quite some time ago that we always seem to 'muddle' through. You are looking at a typical NM muddle :).

Some Facts & Some Theory

2008-01-28T15:17:00.000-07:00

Unemployment for December continued to be very low in New Mexico and Albuquerque: 3.5% & 3.7% respectively. Both are a small 'uptick' from November but still well below the national average of 5.0%

New home permits were down a very large 60% from December to December. That is a big drop, of course but I consider it good news for everyone but the builders themselves. On the outskirts of Albuquerque and Rio Rancho the builders' excess inventory is slowing up individual home sales. When their inventory is sold off, then the re-sale market will come alive again in those areas.

And, speaking of inventory, that is the key to forecasts about when the market will turn around. Depending on the source, that will occur in the second or third quarter as confidence returns and inventory shrinks.

The Blame Game

2008-01-26T05:45:00.000-07:00

Check out They Lied to Us for the bottom line on who did what during the credit debacle. Bottom line for me: the financial people were simply making too much money to pay attention. Does anyone remember Alfred E. Newman of Mad Magazine? His signature comment was, "What, me worry?"

Thinking About Albuquerque/Rio Rancho

2008-01-23T05:49:00.001-07:00

OK -- if our local economy continues to be in good shape (income up, unemployment down and foreclosures moderate to low) why is that not reflected in the real estate market?

Caution about the economy?
Fear of buying at close to the top of the market?
Lack of mortgage programs?
Too many choices?

Something else?

Let me know your thoughts....

The Fed Reacts -

2008-01-22T14:48:00.000-07:00

- and so do rates in Albuquerque.

After the Federal Reserve lowered its funds rate by .75%, mortgage loans were at 5.625% in Albuquerque. That is almost as low as the historically low rate of 5.5% from a couple of years ago.

So, with a strong local economy and very low interest rates, we'll see if buyers come back into the market.

What Economic Downturn?

2008-01-17T17:08:00.000-07:00

Fast on the heels of the announcement about SCHOTT SOLAR building a plant in Albuquerque's Mesa del Sol development comes another -- and bigger -- announcement.
FIDELITY INVESTMENTS will build an operations center in the same development. The facility should be completed in late '08 and employ about 1,250 people. Even better, the expected salary range for most of the positions will be in the $37-65,000 range.

Albuquerque Jobs

2008-01-15T06:08:00.000-07:00

Three recent events highlight the 'now you see 'em, now you don't' aspect of job announcements:
Almost certainly real: SCHOTT SOLAR will build a solar energy production facility in Mesa del Sol on the south edge of Albuquerque. Beyond construction jobs the company will employ 350 people at its first phase.
Probably real: ECLIPSE AVIATION, with a total work force of about 1,600, plans to hire an additional 700 people this year.
We'll see: TESLA MOTORS is once again saying it will build an assembly plant for its electric sedan on Albuquerque's West Side.

Unemployment Figures

2008-01-14T05:07:00.000-07:00

If 'all politics is local' is true, that is probably because all economies are local.

While the national economy continues to slide, the Albuquerque region (including Rio Rancho) continues to avoid the worst. November unemployment stands at 3.0% How many other areas of the country do you think would like to see that figure?

Down They Go...

2008-01-10T13:31:00.000-07:00

Ben Bernanke, the chairman of the Federal Reserve, said today, "We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risk."

Sound like another rate cut in the offing to you? The next policy meeting is Jan. 29 and 30.

Connecting the Dots...

2008-01-09T06:05:00.000-07:00

Stocks are down sharply from the first of the year on consistently bad national economic news. KB Home posted a large loss for its 4th Quarter. Next up, almost certainly, is another drop in interest rates to start 'cooking' the economy. (What politician wants to enter an election cycle during an economic downturn, to say nothing of a recession??)

So, no surprise that the market anticipates that event. According to FANNIE MAE, mortgage rates have reached their lowest point since 2005. As of Jan. 7th the average for a fixed-rate 30-year loan was 5.7%.

Luck of the Draw

2008-01-07T05:54:00.000-07:00

One reason Albuquerque's housing market has survived far better than others (so far) is that we are simply less expensive overall. The same type of housing that is over $500,000 in LA, for example, will cost about $200,000 or less here. So, subprime loans were not a critical tool for getting people into houses when prices went up.
Another reason is that getting out of a bad loan is far easier here. New Mexico does not allow pre-payment penalties so refinancing is far less expensive.
The result: far fewer foreclosures saturating the market.

Oh, NO... another blog!

2008-01-06T12:23:00.000-07:00

So, the question, of course, is ‘Why this one? Why now?’

For 18 years I have been listing and selling homes in the Albuquerque area. For the last 10 years, I have been informing my clients about the local market on a monthly basis. (Click here to sign up for the Market Update .) Our economy has rarely marched in sync with the national economy and we have never experienced the big boom and bust swings that can turn a real estate market on its head in a matter of weeks. So, that frequency has always been enough – until now. A lot has changed in the last few months. And, crucially, events outside of Albuquerque are starting to have an impact.

Credit sources drying up overnight.
Mortgage programs that affect both high- and low-income families ending abruptly.
And, why the heck should the failure of a bank in England or France or Germany cause problems with our sources of credit?

I’ll be trying to highlight some of those issues as they appear and include links to articles that are far more informed than I.

Come along for the ride…