Challenges and opportunities in the Albuquerque Real Estate Market in 2021

by | Jan 6, 2021 | Albuquerque Real Estate Talk | 0 comments

It is new year’s Eve or new year’s after new year’s day. If you’re listening to us, though right here on the radio is of course to go on Tracy, joining us every Saturday morning, right here on the Kiva, the Albuquerque real estate group, but you can find them to find them directly at welcomehomeabq.com. That’s welcome home, maybe Q a.com or why not pick up the phone and dial them directly this morning. They’re waiting for you. Four four eight 88 88. That’s four, four eight 88, 88, or yet one more time. The number one real estate website in the state of my spiel. Welcome home. Abq.Com. Happy new years guys, or Hey, new year. Yes. Happy new year. Happy new year

To be here on this happy new year for

All the folks that are our regulars, listening to the show and usually see us in our studio, in our office where you’re not in the office today, but this seems to be working Eddie. Are you hearing us okay. On this and clear getting microphone and you’ll look amazing too. I love the studio lighting there in the back. Absolutely amazing. Yeah. So Eddie you know, th this week we wanted to talk about, you know, what we’ve gone through this year in real estate and Albuquerque and what we see coming down the pike. I do see some, some challenges as well as some opportunities in the real estate market in Albuquerque.

Yeah. You know, obviously end of year, we always do kind of a recap and we’ll have more of that into January, but we’re also talking a little bit about what, what we expect for 2021, mostly the opportunities

There, there is. There’s like I said, some challenges, but the biggest challenge is, you know, is, is the lack of choices for, for home buyers right now, and the lack of number of homes on the market. And I want to bring you in on this conversation that he go ahead,

Which leads to one of our topics today, which is homebuilders and the lack of land for them, and what has happened, impact that even further in 2020,

There was an article in the New York not the New York times, the wall street journal, the, the better New York times the, the wall street journal about, you know, the challenge that homebuilders have, not just locally here in Albuquerque, but around the country, finding ready to build blocks. First tale, there’s a shortage. It’s not like they don’t want to build homes if they just can’t because they don’t have enough dirt to build that. Now at a, you know, the story of the local builder that then kind of fighting to get development out of the ground, you know, on the West side. And they’ve been, I don’t know, it’s been two, three years, I think, and they’ve got multi-million dollars into it and they still can’t get it done because not because the neighborhood or the community or the piece of dirt isn’t zoned for use for residential, it’s still has to go through planning and zoning to do the subdivision, all that stuff. It’s been at least two years, but I think it’s been long. I think London generally take for most people, Tracy, to get through the whole process. If you were taking a sum them on through the approval process on their own, a piece of land, how long would that generally take?

Yeah, it would take a while anyway, you know, a year, maybe more or less.

So it’s different things that he, so, so let’s say you have a piece of you have one of those 0.8, nine acre, lots in North Albuquerque acres, right? You can break ground tomorrow. Right? You can start, that’s already zoned. It’s already subdivided. It’s already to go for that. But if you are a, a land developer or a builder that is developing land for builders, and I say that wrong, no, I did say you get my point. Yeah. So if you’re either developing land to sell or developing land as the builder, you’re looking at a two year process. So, you know, you go and find you know, let’s say a five acre parcel probably on the West side. That’s basically where it is maybe Rio Rancho. You’re looking at a couple of years of, of before you’re ready to actually start building. You got to do the financing, you’ve got to put the whole deal together.

You gotta figure out utilities. You got to do all the the studies, environmental studies to get your roads and brewer and everything in place. And it’s just a long process. And at the end of that, you know, a finished lot that a builder is going to buy from somebody that’s, you know, put all his time and energy into the lot. They’re going to be spending $70,000 for just a residential lot on the work side right now. I mean, think about that. I mean, you know, the, the challenge we’re going to be, I think we’re going to see is just affordability dropping for us because there, you know, builders can’t build a home for under $250,000. If they’re paying 70 or $80,000 for the lot, it’s just not going to happen. Right.

Cost of money and holding that land and the time to get it developed, all of that plays into that cost. Right.

And, and so, yeah, it’s, it’s a long process. And you know, you think about that. If you’re in a, if you’re a developer and you’ve got two, $3 million to invest to build out a neighborhood or take that money and put it somewhere else, you know, the, the, the problem is you’re making an investment for something that’s going to happen two or three years from now. So it’s, it’s a risky proposition and not a lot of people are doing it right. And it be, people got burned back in Oh seven Oh eight when all these lots were developed and then boom, the market fell away. Right. And the other thing that I see Tracy and Antigo is coming into this. They could be holding them through the cycle. The is now,

Right. I think there’s a shortage of property that’s available in the market. It’s a great opportunity. Especially we have a land that’s ready to build. They do, but the site, but they’ve been held up. I mean, I think there’s a claim. I hate to say it like this, but given the type of product that it’s trying to turn out, which I think is between 250 and 300, I’m just guessing, is that what you know right now in Albuquerque proper construction for under 300? No, no, no. This, this new, this particular, I mean, they’re, they’re targeted probably two 50 to three 50, but they actually have a claim because those products were fly right off the shelf. They would literally be sold. Every one of those things would be an escrow tomorrow. I would imagine maybe even just with your buyers, I think it really is that, and they’ll have that type of claim and the city of Albuquerque isn’t doing itself any favors by not getting this thing done.

Well, it’s interesting. So there was this thread that, that McKinsey put out there, you know, McKinsey from Abrazo homes and, you know, just talking about this wall street journal article, that’s where I first saw it in that, you know, he basically said, what did he say? He said that the battle is real or something that, you know, they just can’t get enough, lots to the build on fast enough. And in the, in the chow and somebody made the comment along the lines of, well, they shouldn’t be doing infill. Well, you go talk to a builder. That’s ever tried to do an infill project in Albuquerque. And you asked them how easy that went. I’m just telling you infill sounds good. And it sounds good if you’re, you know, talking, you know, policy-wise and it sounds great. And there’s a good talking point in campaigns. This is about as political as I’m going to get, because it’s the thing I do every day is they talk about infill, Oh, we want infill. We don’t want sprawl. We don’t want this. Well then actually don’t just talk. It actually have the policies and make it possible for these guys to do I say guys, but guys and girls to do infill

This project is sort of infill it’s right. Between Oxbow. It’s like by St. Pius there in the bluff, down by the river between Bosky school Lulu’s or Lulu’s in Oxbow, one of the two right in there. And, and it’s infill, but it it’s really being held up because the neighbors keep protesting it. But that’s the, the thing about infill, if it’s a lot here or there, or a small thing, the neighbors already use it to walk their dogs there. They don’t want somebody next to you.

Well, the, the, the, the term is NIMBY, right? It’s not in my backyard. It’s like, don’t do it in my backyard. And I’ll just finish this off with this, because I know the area that you’re now speaking of. And I grew up that’s right. Taylor ranch. So right above the Hill, that’s right there. And as you see, Taylor ranch looking down LA Luce was actually the first one of the first communities that was ever there. It goes back to the mid seventies. So Taylor ranch was built on something called college Heights right there. And you can see the first house that’s right there. And then Delaine that goes right up that road, and then looses at the bottom of that. And it overlooks. And many of those people, if you go in and I doubt many people have actually traded away from their homes from there because they’ve owned those houses free and clear, and they own the real grant amazing development.

So I can understand the pushback, but, you know, given, you know what in Brian, I know he knows it. Well, I know Brian very well. He grew up in that area just on the other side of St. Pius high school. So he knows the value of that property. And I, I can only imagine there will be a time where there’ll be, there’ll be some give, and I hope that that is soon, but we need more product out on the market. We should definitely talk about that. This is the best time in the world as Albuquerque. The merchandise should property. We of course have our homes of the week some open houses that could be virtual open houses, and we’ll let Tego and Tracy take it away. Thank you both for, including me in that conversation. And we’ll keep what’s happening over there. Thank you. Thank you. So here we are here. Yep.