The supply side: Why there are so few homes in the Albuquerque’s Real Estate Market?

The supply side: Why there are so few homes in the Albuquerque’s Real Estate Market?

(Transcript Snippet): “Tego: So let’s go through this. Why do we have so few homes on the market? Let’s just talk about the supply side in the last 10 years. Well, let’s put it this way. There’s been a 10 year plus years of under building new constructions. There just haven’t been enough homes built to take up the, the demand plus future demand. And future is now here. I’ll get into the second, but we’re going to talk about the whole millennial thing and why that, that demand is there. So the future is here and there’s big demand, but there’s been 10 years plus of underbuilding. There’s a lot of reasons for that. Just give you some statistics to back that up from, in the seventies, in the United States, there are 11 million homes built in the eighties. There were, let’s see, 9.8 million home built in the let’s say the, the, the 2000, right.
Tego: There were 12.6 million homes built. And then in the 2010 to 2019, there were 6.5 million home built. So, so you see about, you know, we’ve had this huge decrease in the number of homes built, and so it’s really affected and just what’s available. Couple of things have created that. Why were there so few homes built over the last 10 years? Well I will say that it’s, it’s partly just being conservative, the people, I mean, a lot of people got hurt in the housing bubble builders, developers, contractors, obviously. And, and they they’ve been much more conservative, but the ones that made it through, and then there were a lot that didn’t make it through. Meaning there just were less home-builders in, in the entire country.
Tego: One of the things that happened was the cost of lots, meaning finished, ready to build lots. So what happened was at the end of the pandemic, we had all this oversupply, a vacant lot ready to build lots. Well, now those all have been used up and they’ve been used up now for a few years and th the process to bring new lots new building sites out of the ground. It’s a slow process. Think a year, two years, three years permitting construction investment, and again, millions of dollars of investment to get these subdivisions built out. And you know, people are being conservative on their investment. Interesting thing that that happened in the mid let’s say 2013 to 2018, there were a lot of stories about the lack of skilled trades people. And it, you know, people that follow the news, you probably heard this well, that trend really caught up to us.
Tego: What happened was at the end of the, the housing boom. And while at the beginning of the housing bust, let’s think 2009 those jobs just kind of went away. A lot of people left the trade, the skilled trades, electricians, plumbers, framers, you refer to all, all those things. And I mean, there’s a story from 2013 here I have here from Forbes talking about let’s see. So the, the headline is, and this is from 2013, but think about this American skilled trades dilemma, shortage, loom as most in demand group of workers by ages and most what happened is over the years here, the trades people just were getting older and older and there were less trades people coming into the industry. When I talked to home builders or any of the groups that do surveys with home builders here, locally myself, or nationally with some of these other folks, when they talk to home builders and say, okay, what are your challenges right now? How come you’re not building more homes, right. We’re all saying, why aren’t you building more homes? We need more homes there. They’re just saying, well, costs let’s put cost aside. That’s a whole other conversation. Their costs have gone through the roof, but, but labor that just skilled construction labor is in high demand. And so they’re, you know, they’re, they just can’t basically get people to build the homes as fast as they would like. So that’s one part. Okay.