A new $7 million multifamily project that combines affordable housing and green design broke ground yesterday in Gallup.
The Chuska Apartments will be a 30-unit project serving residents who make between 30 and 60 percent of the area’s median income. Ten of the units will be set aside as transitional housing for homeless families with children.
Conceived by the Supportive Housing Coalition of New Mexico, the project was one of the winners of the New Mexico Mortgage Finance Authority’s (MFA) 2006 tax credit design competition.
The majority of funding came from a $6.5 million tax credit equity that leverages more than $1 million in additional financing, including a $25,000 Green Communities grant from The Enterprise Foundation, a $50,000 land donation from the city of Gallup, $189,000 from the New Mexico Capital Outlay grant, and a $15,000 development initiative grant from the U.S. Department of Agriculture Rural Communities.
MFA will provide additional construction financing, consisting of a $650,000 loan through its Primero program and a $400,000 Housing Trust Fund loan.
With first-time home buyers facing affordability issues in the state, this is hopefully the first step in correcting such a problem.
The prices of starter homes in the metro-Albuquerque market have soared 57 percent since 2003, making it more difficult for first time home buyers.
David Murphy, publisher of SalesTraq, an online housing database that focuses on new home prices for this region, reports that starting home prices in Albuquerque have risen from under $80,000 to $112,000 in three years, while climbing to $160,000 in Rio Rancho and $119,000 in Los Lunas.
These higher prices are putting a drag on the overall market because they bar entry to many first time buyers and those seeking a New Mexico mortgage.
“How will the market cater to lower wage earners? The lion’s share of resale homes has closed between the $100,000-$200,000 mark consistently for the last several years while both the average and median home price have soared well beyond this.
This is another reason why the inventory has been so high, it’s become expensive,” Murphy says. “Let’s hope the forecasts of a bright economic future for Albuquerque are correct.”
The current average new home base price in the Albuquerque housing market is $257,485, an all-time high as developers are building larger homes with richer architectural features. They are paying higher land costs and building materials have soared in the past three years.
Of three new subdvisions opening this January, none have low starting prices.
Jubilee at Huning Ranch is priced between $189,000 and $339,000, Stormcloud@The Petroglyphs starts at $208,000 while Autumn View begins at $200,000. This doesn’t bode well for affordability. Until prices come down, home mortgage loan activity will remain slow.
Posted by Jed Moss on Jan 03 2007 under New Mexico
More New Mexico homeowners are feeling the pinch of rising mortgage interest rates as the year draws to a close, recent data shows.
According to the Albuquerque Business Journal, the Land of Enchantment has some of the highest rates of both prime and subprime problem loans in the Mountain West region of the United States.
More than 4 percent of all New Mexico mortgage holders are delinquent and of those, 1.52 percent are seriously delinquent, or 90 days past due.
Only Colorado, at more than 2.18 percent, can boast more foreclosures among homeowners of the eight states in the nation’s Rocky Mountain region.
At 2.22 percent, New Mexico is the most delinquent when it comes to prime loans and is by far the most delinquent when it comes to subprime lending, with more than 11 percent of New Mexico’s subprime or bad credit home loans currently delinquent by 90 or fewer days.
At 5.63 percent, New Mexico is second behind Colorado in the rate of home loan foreclosures, or 90 days past due. The Colorado mortgage foreclosure rate is currently more than 7 percent for subprime loans.
The figures constitute a dramatic turnaround from the second fiscal quarter of the year, when the New Mexico real estate market appeared significantly stronger than surrounding states.
The market started sliding here last summer and has continued the downward trend in the fourth quarter. Where it heads from here is anyone’s guess.
Will the New Mexico housing market ever cool off?
The question becomes more acute when looking at the November home sales figures released Tuesday. The 935 units sold in November represent a 17.3 percent decrease compared to a year earlier, the Albuquerque Tribune reports.
Meanwhile, the number of homes on the market as of Sunday - 4,363 - is nearly 52 percent more than the 2,263 from the same day a year earlier.
Despite the saturation of homes, the average home price in November increased by 10 percent in the metro area compared to a year earlier - from $219,949 in 2005 to $242,061 last month.
The median sales price, the point at which half the homes sold for more and half for less, rose 7.3 percent from $178,900 in November 2005 to $192,000 last month. That’s enough to put a strain on many residents who own homes, as well as those looking to qualify for new home mortgage loans.
“It can’t continue like that,” said Cathy Colvin, who leads the Albuquerque Metropolitan Board of Realtors. “Not with the amount of homes people have to choose from.”
Colvin isn’t predicting a grave drop in home values, as seen in places like California, Nevada and parts of the East Coast where the cost of buying a home has skyrocketed in recent years.
Instead, Albuquerque home prices should begin to level, rather than increase, as long as the inventory of homes stays high, she said.
A piece of good news this month is the fact that the inventory of homes - while significantly higher than it was last year - dropped by more than 260 homes from the board’s last report on November 10.
Overall, board officials say New Mexico mortgage activity continues to be stronger than in recent years. Just three years ago, only 679 housing units were sold in November, according to board statistics.
“This time of year we usually see a slow down anyway, regardless of what the market is,” Colvin said.
Posted by Richard Barber on Dec 14 2006 under New Mexico
After several years of strong housing and low risk, the Albuquerque housing market has made its way onto the dubious list of cities with an increasing risk of mortgage defaults.
The Albuquerque Business Journal rated The Duke City higher than ever in terms of mortgage risk.
In its report, CoreLogic, a research firm, said that “Albuquerque is a market experiencing an increased level of mortgage risk in an environment of decelerating house price appreciation.”
The firm, based in Sacramento, Ca., helps lenders determine where mortgages are most likely to experience problems.
While the rising level of New Mexico home loan risk did not quite propel the state’s biggest city into the top five nationally, it certainly bears watching going forward.
The top five markets most at risk for mortgage defaults, according to the report, were Akron, Dayton and Cleveland, Ohio, Detroit and Memphis. That’s three big areas of Ohio mortgage risk as job losses and stagnant housing markets in those cities helped push them into the top five.
Other Southwest cities singled out included Dallas, Houston and Fort Worth, where declining housing prices were noted and the rates of delinquency have gone up sharply.
Albuquerque’s home price growth has dramatically slowed, falling from over to 10 percent in recent years to a more modest 7 percent for the 12 month period ending September 30.
While previous reports had stated the New Mexico housing market was cool, yet strong,recent findings say otherwise.
According to Mike Inselmann, president of Metrostudy, Albuquerque is expected to hit the bottom of its housing cycle in the next six months.
“Cutbacks in new production, aggressive incentives to sellers, the exit of the majority of investors and the fundamental demographic support for housing demand are positive indicators for a housing turnaround by mid-2007,” Inselmann said.
John Covert, director of Metrostudy’s Albuquerque division, noted in particular the 17.4 percent decline in the sales of existing homes, along with a spike in inventory, which doubled at the end of September when there was a 4.1-month supply on the market and little demand for home mortgage loans in the city.
However, job growth remains strong. There were 13,400 new jobs added to the Albuquerque economy for the fiscal year ending September 30. New housing starts are declining, recording a 24 percent drop in the third quarter from a year ago.
Albuquerque’s affordability also has declined in the past two years when 46 percent of all new homes being sold were below $150,000. Today, just 9 percent of new homes and condos are priced under amount. No wonder so many individuals are holding off on mortgage loan applications as they await prices to come down.
Still, Covert remains relatively upbeat.
“Despite the recent slowdown in housing, the market remains fundamentally healthy and as long as Albuquerque continues to create jobs at a robust level and in-migration remains strong, builders should be able to shed excess inventory in the coming months and increase starts activity later in 2007,” he said.
Posted by Jed Moss on Nov 14 2006 under New Mexico
Steve Chenault had a house for sale and wanted to buy another one.
The Las Cruces, N.M., resident did his own homework.
“We just started looking around at different properties and calling real estate agents. There are quite a few real estate agents out there and some of them didn’t return calls,” he said.
Still, Chenault told the Las Cruces Sun-News that he was able to eventually find a house he liked and sell the one he was living in, all in about three months. His house, which he sold for about $200,000, was on the market for six weeks.
That’s a sign of a buyer’s market. According to Annette West, a real estate agent with New Mexico Apartment Advisors, Chenault’s house was ahead of the game when it comes to time spent on the market.
West, who writes a weekly real estate column for the Sun-News‘ business section, said research shows that with home sales that closed in September, the average time spent on the market was about 16 weeks.
“It definitely is taking longer to sell than it did a couple of years ago. We’re seeing some of the higher-priced homes coming down in price,” she said.
West, who based her findings on the local multiple listing service (MLS), said that the average amount of time it took a home to sell in the New Mexico housing market was on par with last year’s numbers.
According to West, homes that sold in September 2005 were on the market for an average of 115 days. Those that sold in September of this year were on the market for an average of 114 days.
Bloomberg News recently reported that housing starts in the U.S. unexpectedly rose last month from a three-year low, as falling mortgage rates began to draw buyers back into the market — a sign that the housing slump may be nearing its bottom.
While official numbers from the Las Cruces Association of Realtors have not been released since April, West pointed to the MLS to show that, while the cost of a mortgage loan may be higher, and it might be taking houses longer to sell than it did several years ago, the number of homes sold continued to be strong.
West reported 205 homes closed in September of this year while 197 closed in September 2005. The Las Cruces Association of Realtors say 138 homes were sold in September 2004. West said that the average closing price of a home last month was $221,402, while that mark was $176,080 in 2005.
“We’re still seeing a lot of home sold. Just because the housing market might have cooled some does not mean it is a bad market,” she said.
Posted by Richard Barber on Oct 23 2006 under New Mexico
