Economic Bits and Pieces

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

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

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

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

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

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.