homes  homeweek

Sunday, April 7, 2002

ABQ Housing Market Going Strong

By Glen Rosales
For the Journal
    While America's economy has been somewhat sluggish, the home-buildingmarket in Albuquerque has churned merrily on, breaking records that experts thought wouldn't be topped for some time.
    New housing starts in the metropolitan area broke a 2-year-old record in 2001 and beat the previous year by more than 20 percent.
    And there's been very little slowdown so far this year, says Jim Folkman, executive vice president of the Home Builders Association of Central New Mexico.
    "I've been surprised by the last two years," he says. "And last year by the magnitude of the increase. I expected a 5-(percent) to 7-percent drop."
   
Building up
    Albuquerque is "insulated" from the rest of the nation's economy by the reliance on government spending, Folkman says, so trends that apply elsewhere generally don't mean much here.
    In the wake of the September terrorist attacks, Albuquerque is attractive to a lot of people — it seems like a friendlier, less-likely target than some other cities, adds Arlan Collatz of Tiffany Homes.
    "People are looking for their comfort zone," he says. "And Albuquerque can provide that. It's a smaller city, so people feel safer here."
    Builders, seeing that need, have responded, especially at the lower end of the market where bottom-of-the-barrel interest rates really have an effect. They are racing to build entry-level production homes on the Southwest Mesa and the West Side.
    Of the more than 5,500 starts in the metro area last year, 83 percent were houses priced at $119,000 or less.
    "We're going to have a robust first quarter," Folkman says of 2002. "I think the second quarter will be a little bit softer, but I think we should rebound in the third and fourth quarters."
   
New vs. old
    Albuquerque set a record for existing home resales in 2001 as well.
    "With the low interest rates, we have a lot of people taking advantage of that by moving up and into a new and bigger home," says Mark Ferguson, president of DR Horton's New Mexico division.
    Many home buyers, especially at the lower end of the market, left rental properties for the first time; others moved up from existing houses.
    The plethora of new houses can affect the resale market hard in an area where there is a lot of new construction nearby, such as Paradise Hills, says Barbie Brennan, a real estate agent at Keller Williams.
    "It's very difficult because there is so much new construction and it's less expensive," she says.
    Brennan and her sales partner, Eve Price, encourage clients to stress the positives of older homes, such as larger yards. It helps if the older homes have had recent remodeling work done, too, Brennan says.
    "But it's really hard for any seller to compete with that," she says of new-home construction. "The buyer is just going to be looking for a great deal."
    In some parts of the city, however, like in the La Cueva and Eldorado school districts, there is plenty of traffic, she says.
    "People move into the Northeast Heights because of the schools," Brennan said. "And people move into the North Valley for the quality of life. It just all depends on what people are looking for."
    The resale inventory stands in the neighborhood of 3,000 homes.