The era of booming growth is waning in New Mexico, at least for a while as the housing market slows. A strong base of new employers, including the movie business, jobs in energy and government along with fewer adjustable rate mortgages are helping markets with a softer landing than in many other places of the country.
But growing foreclosure rates are also hurting markets as homeowners fail to refinance mortgages as a result of falling home prices. Fortunes are fading in New Mexico as the credit crunch hits the housing market.
Albuquerque home sales are on the slide, but the inventory of homes for sale is almost reaching a healthy balance, considered between five and six months of inventory. The market remains fairly stable despite the drop-off in home sales. There are a variety of factors impacting the local market place, despite the national recession.
The unemployment rate is climbing but is only at a five year high in New Mexico, which is comparatively stronger than most other states. Albuquerque has grown for more than a decade. The last time the state has seen sustained job losses like it is now was back in 1986, which will hurt housing markets over the long run.
The pace of home sales should remain relatively slow through 2009 with average home value deflation forecast to hit 13.7% by the year's end in Albuquerque. More companies, however, are planning to move to the area to help bolster the economy and supply new jobs, including Hewett Packard and Fidelity Investments.
 |
| City |
Forecast |
| Albuquerque |
− 13.7% |
| Las Cruces |
− 13.8% |
| Santa Fe |
− 14.2% |
In Las Cruces, the state's second largest urban area behind Albuquerque, the housing market has come to a five year slowdown. The over-supply of homes sitting on the market for sale is hurting Las Cruces and it doesn't look like things are going to be getting any better for sometime. Increasing foreclosures and a tighter supply of home mortgages are making it more difficult for first time home buyers to get into the market.
New home builders constructed homes that are still sitting vacant. Housing Predictor forecasts the market will see another year of slow sales in 2009 on average housing deflation of 13.8%. State tax collectors expect revenues to fall $280-million short of appropriations. Much of the shortfall is attributed to declining oil and natural gas prices.
Santa Fe had been a tourist town that attracted a subculture of artists and free thinkers as residents before the housing boom near the Red Rock Country of New Mexico. But with the boom came new construction and business development. Now, as the area's tourism industry softens because of the weakening economy, Santa Fe is suffering through the housing mess.
As home values especially on vacation homes fall, foreclosures are on the rise in the mountain top community, which has some of the finest works of art to display in the country. Full time residents are more likely to wait out the downturn than second home buyers. The inventory of homes has grown as prices decline, and is forecast to deflate an average of 14.2% in 2009.
