Albuquerque’s Residential Real Estate Round-Up

Albuquerque’s Residential Real Estate Round-Up

Transcript Snippet: “Tego:

So Tracy, we went to that event this week it was again NAIOP and they

Tracy:

National association of industrial and office properties.

Tego:

And they were doing what they called the residential Roundup, where they were talking more about, you know, what’s going on in a residential market. Cause obviously that focus of that organization is the, the commercial, the commercial real estate. So they were talking to residential builders, residential home builders, as well as guy from was it Titan development, Titan development that does multifamily development. So those are, you know multi-family buildings, apartment buildings, stuff like that. And then there was also some land developers there that develop residential building lots. So couple things that, that jumped out at me, just kind of in my notes here, Tracy, and one was, and this is something we’ve talked about is the Albuquerque market has been underbuilt for almost 14 years. Right? Really not almost, but I mean, basically the, the spigot of new construction, both in multifamily and residential got turned off in 2008.

Tego:

Right. And, and what happened was there was a lot of land that was just had been developed, ready to go. And it it’s taken a long time to work through all that developed land that was there. And just in the last few years, it’s all of those have been depleted. And now, you know, they’re having to do new land development, new neighborhoods and getting ’em out of the ground. So like Lamont in Rio Rancho is, you know, one of the first, you know, real big neighborhoods that that’s come on since that that’s a new, you know, post 2009, let’s say.

Tracy:

Right, right. Which was interesting. And it, it took a couple years right. For that to come online.

Tego:

The, the other thing that, that I heard a few times was we meaning the building industry couldn’t overbuild residential either multi-family or single family, if they wanted to, they just don’t have the, the labor, the crews, as well as limited number of develop, developed, lots ready to build on

Tracy:

And getting the supplies. Yeah. Right. We’ve got supply chain issues because every week we talk to different builders and one week they’re saying, well, we can’t get a garage door. We need to delay closing. Or we can’t get our window package in time. Or we went ahead the day we got the permit for this particular home to be built. And we pre-ordered all the appliances and all the windows and all the framing and everything, even though they don’t need it, it used to be a just in time thing. Right. Yep. Where they would order ’em knowing that, you know, three weeks out, they were gonna be ready for ’em and that they could get ’em in that time. And now they’re ordering some of the builders are ordering it all right up front and just like storing it if it actually comes in when they need it.

Tego:

You know, what’s interesting. Before side note on that, I saw a, a different presentation here the other day, talking about, you know, the supply chain issues. And it had the photo of the port of Shanghai with all the ships that are just sitting there. And that, you know, the speculation is late this year, early next year, suddenly we’re gonna have a lot of materials available, a lot of, you know, things that have been held up. Now, I’m not saying that’s, you know, construction materials. It was just interesting. I’ll give you one other anecdote on that, which was, I, I ordered some kitchen cabinets for, for a home. We are fixing and I just bought the standard, you know, kind of cabinets, nothing special. And it was two to three weeks. Right. Not bad, you know, about a month I think is what it’s gonna end up being to get, to get some kitchen cabinets, but they weren’t anything special or kind of standard.

Tracy:

Well, and you selected them because the provider told you, right. Here’s what you can really get. Right. And you picked

Tego:

From it. And that’s what I did. I said, just what can we get? You know, what’s relatively easy to get and, and not gonna be a long lead time. But what she told me was they’ve got certain products that they just ordered kitchen cabinets and nothing super special lead times out into December for, for kitchen cabinets,

Tracy:

If it’s, and we’re at 1st of July. Yes. Yeah, yeah. So, so six months lead time.

Tego:

So that’s still kind of a challenge for the new construction is the supply. They’re all making it work. It’s just that what’s happened is, you know, a new single family home, you know, in a production neighborhood general used to take, you know, five, six, maybe seven months the longest now it’s

Tracy:

10, 12 or more. Yeah. Yeah. So going back to Shanghai, so I just can’t help. But to talk about, we’ve been to Shanghai, right? Our daughter worked in Shanghai for a summer. And so we obviously went to visit her. That was not on our bucket list, but it was a great, great visit to Shanghai in Beijing and other places. But you know, the port there, they they’ve recently the COVID restrictions have recently come, come open, right? Yeah. So, or come off. So we’re starting to see things move again there. So those containerships all sitting there, they were waiting for the COVID restrictions to lift because Shanghai had that virtual lockdown, which I just cannot even imagine when you look at that city, it’s like crazy. It’s a very modern city. So yeah.