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ABQ’s low housing spending adds to ‘Hunger Games’ market

A worker is silhouetted in a second-story window of a home under construction in the Mesa del Sol subdivision Thursday. The master-planned community, one area in Albuquerque where new residential construction is occurring, now has 300 homes. The development’s master plan eventually calls for 37,500 residences. (Jim Thompson/Albuquerque Journal)

Copyright © 2021 Albuquerque Journal

A national study shows that Albuquerque is outside the top 200 metropolitan areas when it comes to spending money on new housing – and it lags far behind metro areas in neighboring states.

According to a study from the trade publication Construction Coverage, which examines how much money cities across the country spent per capita on new residential construction in 2020, Albuquerque spent $541.33 per capita on new residential construction. That figure ranked 201st among metropolitan areas with at least 100,000 residents.

A home for sale in Northeast Albuquerque. Record-low inventory of homes for sale in the Albuquerque area is helping push home prices up. (Jim Thompson/Albuquerque Journal)

This relative shortage of new residential construction, along with strong demand for housing, has led to record-low inventory in Albuquerque and pushed home prices up in recent years.

“(Sellers) have a product that’s in scarce supply, and that doesn’t look like it’s going to change anytime soon,” Albuquerque Realtor Tego Venturi said.

Study author Jonathan Jones said in an email that researchers pulled annual data from the U.S. Census Bureau’s 2020 Building Permits Survey, and cross-referenced that with data from the 2019 American Community Survey to come up with the findings. Metro Austin led the way, spending $3,141.75 on residential construction per capita.

Elsewhere in New Mexico, metro Las Cruces spent $1,238.74 on housing per capita, which ranked it 84th among all metros. Santa Fe spent $817.46, putting it at 141st, according to the study.

Framers work on a home under construction in the Mesa del Sol subdivision. In the first quarter of the year, the median sale price for a single-family home reached $265,000, up 15.2% from the first quarter of 2020, according to a report by the Greater Albuquerque Association of Realtors. (Jim Thompson/Albuquerque Journal)

Jones noted that New Mexico’s low ranking puts it at odds with regional trends. Neighboring states Arizona, Colorado, Texas and Utah each were among the states where per capita construction were the highest.

Tucson, a similarly sized metro that Albuquerque is often compared to, spent $1,331.46 on residential construction per capita, more than 2½ times Albuquerque’s total.

Jones said growth was the main reason other more was spent on construction in cities in other Southwestern states than in Albuquerque or Santa Fe. He said New Mexico’s neighbors have all experienced double-digit population growth over the past 10 years, while New Mexico’s was a bit over 2%.

“Similar to New Mexico as a whole, the population of Albuquerque has remained relatively flat since 2010,” Jones said.

Despite relatively lethargic population growth over the past decade, Albuquerque home prices have spiked in the past couple of years, due partly to a shortage of available homes.

Last year, the median sale price of a single-family home in metro Albuquerque increased by 10.7% compared with 2019.

And things haven’t slowed down in 2021. During the first quarter of the year, the median sale price of a single-family home increased to $265,000, up 15.2% from $230,000 during the first quarter of 2020, according to a quarterly report from the Greater Albuquerque Association of Realtors published last week.

During the same period, the number of new listings dropped by nearly 8% from 3,799 in the first quarter of 2021 to 3,499 in the first quarter of 2021. The average number of days each home spent on the market dropped from 53 to 24.

“Buying a house right now is like ‘The Hunger Games,’ ” Venturi said.

Venturi said New Mexico builders have been more conservative about new development than builders in other markets. He added that high permitting and material costs make it expensive to build housing in Albuquerque.

“There’s a reason there’s so much building going on in Rio Rancho and not Albuquerque proper,” Venturi said. “They encourage it, where it almost feels like Albuquerque discourages it.”

Without more new construction, Venturi said, it will be a challenge for middle-income Burqueños and new arrivals alike to find affordable options.

“We have to find a way to make this work for everybody,” he said.

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