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Builders adapting to construction trends

Copyright © 2021 Albuquerque Journal

A finished home sits next to a new home under construction in the Mesa del Sol subdivision. (Jim Thompson/ Journal)

Construction is booming in Albuquerque and industry leaders aren’t expecting it to slow anytime soon.

From residential builds continuing to rise on the edges of the city and in surrounding towns to large-scale industrial projects that could spell the beginning of an explosion of companies coming to New Mexico, builders are bracing for another busy year.

But even as demand continues to grow, challenges around costs of labor, supplies and land could influence the speed and types of construction seen in the next year.

Home building

On the residential side of construction, the pandemic has driven demand in unexpected ways, according to John Garcia, Home Builders Association of Central New Mexico executive vice president.

“Consumer confidence is really all over the place,” he said. “This kind of demand is crazy.”

But the demand has been met with increases in costs across three main areas: labor, lumber and land.

A framer puts a corner piece on the trim of a new home under construction in the Mesa del Sol subdivision.

Garcia said that all areas have been increasing in costs over the past several years with the costs for labor and lumber increasing exponentially in recent times, and while this has driven prices for homes higher, the city remains relatively affordable.

“Albuquerque as a metro area is still doing probably better than a lot of the western cities we compete with for pricing,” he said.

‘Flex space’ demand

Just as the pandemic has affected home prices, Garcia said it has also altered the wants from buyers with buyers prioritizing amenities like outdoor living spaces and extra rooms more than they have in the past.

A worker moves lumber from a home under construction in the Mesa del Sol subdivision.

He said one of the biggest trends in the new housing market is the “flex space,” which is a room that can easily be converted into a home office, a home gym or a hobby space.

“That’s something new,” he said. “It’s kind of like a utility space in the house.”

He also said the focus of having an outdoor entertainment area, or a fully functioning outdoor kitchen has proven to be popular over the last year.

“People are taking their outdoor spaces and really making them a part of their lifestyle,” he said.

He said that it used to be adequate to have a single grill outside, but now, buyers are wanting to have a full kitchen with plumbing and ovens as a part of their backyard area.

But due to the high demand for housing, Garcia said that some homeowners are opting for remodels of their spaces rather than looking to buy a new house that suits their needs.

“We’re seeing a lot of remodeling happening where some people just can’t get into the market to buy a new house,” he said. “… With demand so strong, people are really looking at alternatives to buying an existing house or a new house.”

He said that kitchens and bathrooms are some of the most popular rooms for remodeling.

“I think people are really getting creative on how to not just redo their space, but get a different ambiance, a different feeling,” Garcia said.

Greater Albuquerque Association of Realtors president Belinda Franco also said she expects to see a continuation of trends around buyers wanting extra space in their homes.

“They’re wanting more from their home, they’re wanting a bigger yard, they’re wanting an extra room for a flex room or a bonus room, so they can have a gym or home office or space for family members that are going to come stay with them,” she said.

She said the pull toward bigger spaces seems to stem from buyers coming out of a year in quarantine, since many people spent large amounts of time at home and builders are adapting to this want.

“I do see that new builders doing new construction are definitely listening to what the consumer wants, I think now more than ever,” she said. “They don’t want to build homes that aren’t going to sell.”

Both Franco and Garcia said that they expect the bulk of home construction to take place at the edge of Albuquerque and in surrounding cities like Los Lunas, Rio Rancho and even Belen.

Industrial, commercial

On the industrial and commercial side of construction, the city can expect to see a continuation of large-footprint industrial buildings and smaller footprint free-standing retail locations, according to Tom Franchini, a Colliers vice president.

Though Franchini said he expects construction to continue on both fronts, he says he hopes to see an uptick in industrial builds since there continues to be a historically low rate of inventory.

He said he hopes that projects like the Amazon warehouse show other large distribution companies that Albuquerque is a good location for expansion.

“We’re going to start seeing more companies, maybe not as large as Amazon, but we will start seeing more distribution centers start popping up in our area,” he said.

He said that nearby markets like Phoenix and Denver could eventually spill over into New Mexico.

“It’s getting to that point where it’s going to start spilling over into our market hopefully,” he said. “We’ve been in this doughnut hole for so long. Even if we get a tenth of what they’re getting in other markets, it will move the level up for us and be positive.”

Franchini said that this construction is likely to begin in the next year and a half to two years, and will likely be located near Rio Bravo and Interstate 25 and near the Amazon distribution center since adequate space for industrial areas is still hard to come by.

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