New Home Construction at 20 Year Low

It's clear that as we enter the 4th quarter of the year, that 2009 will prove to be a dismal one in terms of the quantity of new homes built in the city of Albuquerque. To see this, look at the following U.S. Census Bureau data on single family new home permits based on a year-to-date historical basis:

(Permit numbers reflect January through August data in the year specified)

1995 = 3,221 permits
1996 = 3,268 permits
1997 = 3,232 permits
1998 = 3,438 permits
1999 = 3,594 permits
2000 = 3,281 permits
2001 = 3,964 permits
2002 = 3,918 permits
2003 = 4,549 permits
2004 = 4,892 permits
2005 = 4,706 permits
2006 = 4,088 permits
2007 = 2,933 permits
2008 = 1,596 permits
2009 = 1,061 permits

The Census data does not have year-to-date figures prior to 1995. However, the Census data does have total annual permit numbers going back to 1980. According to that data, 2009 is on par to be almost as bad as the worst year on record of 1981, when only 1,388 new home permits were issued for the city of Albuquerque that year. Of course, America was in a deep recession in 1981 too, but back then there was no such thing as an $8,000 first-time homebuyer tax credit, and 30-year mortgage interest rates were around 17%. Not only that, but the population was significantly less then, than it is today. All of this just goes to show how difficult the new home market is right now.
In the greater Albuquerque metropolitan area, we are seeing a slow decline in the average and median new home base prices due primarily to more affordable product coming onto the market. For the month of October 2009, SalesTraq of New Mexico data shows there are 82 single family new home floor plans currently available to be built locally for under $150,000. One year ago, there were only 39. We have been predicting this increasing emergence of the under $150K new home product for some time now, but only this year has it begun to really pick up. We now have 10 years of SalesTraq new home data under our belts to look at, so let’s use it to see how this has played out over the course of this decade.