In this week’s New Mexico Business Weekly Jim Folkman, VP of the Home Builders Association of Central NM, is hopeful that the Q could see 3,200 home starts in 2015. In 2010 the Q had an artificial growth of 1,379 home starts based on government incentives for first-time home buyers. In 2011 home start ended up at 1,182, but Folkman predicts that we will see 1,200 home start in the Q by then end of this year. In order to achieve the 3,200 home start for 2015 a third party market analysis of the Q forecasts 1,700 home start for 2013, which would be a rise of 20%. Another 30% bump in housing starts in 2014 would do a lot for our housing recovery. However, in order to get to 3,000 home starts in the Q John Colvert, director of Metrostudy’s NM and CO office, says the number of foreclosures need to drop. Further, that home prices need to rise and while our resale inventory is lower than last year it still needs to shrink.
Folkman states that he is “guardedly optimistic”, and that “we’ve turned the corner, but that the big unknown remains negative job growth. You can eat in a nice restaurant and buy a car if you’re partially employed, but without a full-time job its hard to buy a home.” Third party Denver based analysts Metrostudy and DataTraq were unsure how there could be an increase in home starts with such a poor job market. DataTraq went on to explain “Albuquerque is a different market that is driven by job growth.” They concluded that “there was pent up demand [in the Q] and people are coming back to the market to take advantage of low interest rates.”
While home builders are also hoping for the rebound to take hold on the Q, the availability of quality lots is coming into question. With vacant land taking about two years to develop, builders are looking now at future projects while prices are still low. Folkman said that they only have about an “18-month to 24-month supply of class A lots and a 50-year supply of class D lots.” Class A lots are well located and already have infrastructure in place in the Q. Class D lots do not have infrastructure and are located in the under developed reaches of Rio Rancho. Meanwhile, Mesa del Sol is looking at a 109 lot Phase Two in Spring 2013. Chris Anderson, VP of commercial development for the Mesa del Sol project, also mentioned that there will be more single-story options in Phase Two.