Growing unemployment and businesses exiting the state are hurting New Mexico housing markets, which are sustaining larger losses in sales and home values as the recession unwinds. Job losses in professional, construction and retail sectors are troubling New Mexico, which is one of the last state’s in the nation to be hit hard by the financial crisis.
As homeowners lose jobs in rising numbers, a drag is emphasized on the economy in Albuquerque, which grew with newcomers flocking to the community for attractive new jobs in industries new to the area like the movie business and high-tech. However, the fallout of the foreclosure crisis is leading to a loss of new residents seeking jobs elsewhere. The money that fueled the new industries is harder to obtain through financing and the fallout is anything but inviting.
Albuquerque dropped to a new low for the year after the federal tax credit expired for home buyers, a sign of things to come as home sales fell more than a third from year ago numbers. Homebuilders pulled less than 100 new permits to construct new homes in October, demonstrating a lack of confidence in the market as housing values have been falling for more than a year. Price-cut foreclosures are projected to compose the majority of sales over the next year along with bank-assisted short sales. Average home prices in Albuquerque are forecast to deflate an additional 8.2% in 2011.
Another wave of foreclosures will hurt the housing market in Las Cruces, the second largest urban market in the state as bankers formally take back more homes. The rise in foreclosures could, however, be slowed if state attorney generals are able to get bankers to modify mortgages at a more aggressive rate.
A hurting economy in Las Cruces has added more than 2,000 jobs over the past year, aiding the regional economy in its recovery, which could be a harbinger of things to come. The energy boom supplied new home buyers during the boom, and the industry should see long term growth in the area. Las Cruces is forecast to average housing deflation of 6.5% in 2011.
Unemployment is still lower in New Mexico than in many other states, hovering around 8.4% across the state and that should limit the number of foreclosures substantially as the state sustains what may be the worst of the housing crisis in the New Year. The upturn in the job market follows nearly two straight years of employment declines with current job gains out-numbering losses.
In the mountain high country of Santa Fe home prices have sustained their hardest hit in decades as homeowners walk away from mortgages like never before. The collapse of the real estate market, including the second home vacation market was tough on Santa Fe, a scenic community that attracts artists and free thinkers from the desert floor below.
But a slower economy based in the tourist trade hasn’t been destroyed. The community is projected to see more foreclosures and tough times before it gets better, but inroads of stabilization should develop towards the end of the year on Santa Fe on forecast housing deflation that should average 4.9% for the year.