ALBUQUERQUE, N.M. — New construction virtually nonexistent, sales nearly dormant
Copyright © 2013 Albuquerque Journal
Northeastern New Mexico has been described as a “housing desert” where homes typically sell at a snail’s pace or sometimes not at all and new construction is rare to nonexistent.
“Many communities like Las Vegas (N.M.) lack sufficient housing for families across the income spectrum, causing severe difficulty recruiting and retaining essential employees and stifling economic-development initiatives,” said Mack Crow of Century 21/Rocky Mountain Agency in Las Vegas, N.M.
The irony is that there are plenty of houses in the six counties that form the northeast quadrant of the state – Colfax, Harding, Mora, Quay, San Miguel and Union – but most are not ready or available for purchase by local residents.
Compounding the problem is most potential local buyers have trouble qualifying for a mortgage, usually because of poor credit, housing experts agree.
An initiative is under way to organize a Northeast New Mexico Housing Task Force to explore the housing issues by the U.S. Department of Agriculture Rural Development and the New Mexico Mortgage Finance Authority.
Getting under way
The first task force meeting is scheduled today at 11 a.m. at the Mosquero School District multipurpose building in the village of Mosquero in Harding County.
“There’s a recipe for how you put this all together and that’s where we have to get started,” said USDA Rural Development State Director Terry Brunner. “You need good local government leadership. You need public and private financing. You need a good group of existing or new homeowners. You need a housing agency to coordinate everything.”
The idea for organizing a task force got its start earlier this year when Brunner held a series of informal chat sessions with residents in small towns like Mosquero, Roy, Clayton and Wagon Mound that are typical of the northeast quadrant of the state.
Given his agency’s three-pronged mission of rural business, housing and utility development, Brunner said, “We figured out that we should be talking about housing.”
Colfax, Harding, Mora, Quay, San Miguel and Union counties make up 16 percent of New Mexico’s total land area, 3 percent of the state’s population and an almost infinitesimally small portion of the state’s new construction.
Building nearly dormant
Of the six counties, only Colfax saw new construction in 2012, according to census data. Ten of the county’s 11 new construction projects were houses in the Angel Fire resort area, which is at the west end of Colfax but whose economic orientation is Taos County.
Resort areas like Angel Fire can skew housing statistics in rural counties. Village Manager Jay Mitchell estimated half to two-thirds of Angel Fire’s 1,977 single-metered residences are either second homes or investment properties.
In Quay County, Sam Morrow of United Country/Mesa Real Estate in Logan estimated half of the roughly 2,500 homes in the vicinity of Ute Lake State Park are owned as second homes by out-of-state residents, mostly from Oklahoma and Texas.
Second homes and investment properties help to pump up the number of housing units relative to the number of households in a rural area.
In Colfax County, for example, there were 10,121 housing units compared to only 5,781 households, according to census data. The result is a housing overhang or excess capacity of 75 percent, hardly indicative of a housing shortage.
Comparable housing overhangs can be found in Mora County at 82 percent and Harding at 71 percent.
Quay County had one of the lower housing overhangs among the six counties at 51 percent, 5,567 housing units against 3,686 households. The lowest overhangs were in Union County at 38 percent and San Miguel at 31 percent.
For comparison, the housing overhang in urban Bernalillo County was only 9 percent, while the statewide average was 19 percent.
Other significant contributors to housing overhangs in the six counties are population loss that decreases housing demand, plus an aging inventory of homes. Clearly, overbuilding is not an issue, experts agree.
“The last new subdivision in Las Vegas was developed in 1972,” Crow said.
Five of the six counties lost population from April 2010 to July 2012, ranging from a 3.8 percent loss in Colfax to a 1.7 percent loss in San Miguel, according to census data. Population declines in rural counties are a trend around the country.
Only sparsely populated Harding County saw a small net gain of 12 residents.
The aging inventory of homes is difficult to quantify, although USDA Rural Development’s Ernie Watson said, “There is a major problem with absentee owners who live somewhere else and have let their houses fall in total disrepair. The value is not much and nobody would really want to live in them.”
Sometimes the properties are encumbered in some way, such as by a lien for back taxes, or otherwise are not sellable. The prevalence of aging manufactured homes, typical of rural New Mexico, represents a type of housing stock that’s difficult to sell.
“A situation that’s pretty common up there is a family owns a nice spread of land going back generations,” said Teri Baca, home ownership representative with the New Mexico MFA. “Over time, the family gave land to a son, a daughter, but did not record it. You can’t sell the homes on that land.”
Water can also be an issue, with some small communities experiencing wells going dry, Crow said. Homes in those communities are extremely hard if not impossible to sell.
“You have to be careful of the geographic area that you’re buying in. The drought isn’t helping matters,” he said. “Too many straws and too little a pond.”
During the first quarter, a total of 47 homes were sold in all six counties with San Miguel leading the way with 21 sales, followed by Colfax with 19 sales, according to the Realtors Association of New Mexico. No home sales were reported in Harding and Union counties.
For comparison, 116 homes were sold in Valencia County and 85 sold in the East Mountain area during the first quarter.
Asking prices for homes in the northeast quadrant vary greatly, from lows of less than $40,000 to highs approaching $1 million, according to a recent check of homes for sale on the Las Vegas Board of Realtors’ MLS. The big variable in price is how much land is attached to the house, both Crow and Morrow said.
As far as the local pool of potential home buyers, a common thread among the six counties is low median household income. For example, San Miguel, the most populous county in the northeast with 28,891 people, has a median household income of $32,332 a year, more than a quarter below the statewide median.
“Low income often goes hand-in-hand with a poor credit rating,” Baca said. “People want to pay their bills, but life happens. A child get sick, someone loses a job.”
Low income by itself does not lead to poor credit if a family lives within its means, she noted. It’s the financial decisions to accumulate debt that often lead to low credit scores, she said, like taking out a loan to buy a pickup truck that’s too expensive or building up credit-card debt.
“Financial illiteracy is at the root of some of these issues,” Baca said.
Both USDA Rural Development and New Mexico MFA offer a variety of home-loan programs to help low-income and, in some cases, middle-income families buy a home or fix up the one that they’re already in. The programs see little use in Colfax, Harding, Mora, Quay, San Miguel and Union counties.