1996 has definitely been an odd year for the New Mexico Apartment Market. For the first time in five years, the market has reached a stabilization point in rents, vacancy, and market values. Although there are still more buyers than sellers in the marketplace, the lack of understanding of current market conditions has led to an imbalance, and rash of non-closings in the last 12 months. Before we analyze in detail the current market trends, please consider the following facts: 1. In the 1980’s, Albuquerque’s market bottomed out at 83.7% occupancy (in 1986). 2. At the end of the 80’s rents averaged $.50 per square foot. Based on an 800 square foot apartment, the average household income had to be only $14,400 to support rents of this level. 3. The 80’s witnessed over 14,573 new apartments units, and 19,846 new single family residences (on average this represented 1,457 houses and 1,984 new apartments and houses per year) 4. Albuquerque was considered one of the most affordable housing markets in the country. By the 1990’s the above trends had dramatically changed: 1. In the 1990’s, Albuquerque’s market topped out at 98.3% (and averaged 95% for the decade to date) 2. Today rents average $.76 per square foot. Based on an 800 square foot apartment, the average household income needs to be at least $21,888 to support rents of this level. 3. To date in the 90’s we have witnessed over 5,707 new apartments units, and 11,671 new single family residences (on average this represented 951 houses and 1945 new apartments per year) For the last four years, Albuquerque has made the top fifteen list of least affordable housing cities (If you eliminate the California Cities from the list - Albuquerque us usually in the top four). The 1996 Wired, Tired, Mired (in debt), and Hired (contractor). Each of the following properties was on the market, sold or refinanced during 1996: It’s been a full year since the Albuquerque market was faced with the moderate increase in construction, concession wave, increased tenant turnover, and competitive rental rates. Gone are the long waiting lists of potential tenants, gone are the long tenure periods, both of which have been replaced by the professional tenant, and increase in advertisement and tenant retention programs. The good news? There is a lack of available land to development new apartments (and the city is too shy to challenge the all to strong neighborhood organizations in the rezoning of multifamily land). The now active role of the government in all aspects of apartments (HUD leases, impact fees, permit approval, rezoning, tax credits, bond guarantees, code inspections,etc.) will ensure that apartment development will continue to be quagmired, and take a distant second to the development of single family residential subdivisions. Did you know that during the last five years, more apartment sites have been developed as single family, townhouses, office, or retail than as apartments? When this imbalance is added to the already complex development time table, and ever increasing construction costs (and future impact fees and development costs), it becomes painfully obvious that the City of Albuquerque is on the verge of a housing crisis. WIRED - What sold this year Apartment Name Street City Units Sale_Date Pueblo Villa 6401 Academy NE Albuquerque 232 07-Aug-96 Camino Real 3305 Calle Cuervo NW Albuquerque 248 01-Oct-96 Carlisle Square 4601 Carlisle NE Albuquerque 100 16-Apr-96 Lilli-Ann 209 Charleston NE Albuquerque 20 08-Mar-96 Omega 2613 Dakota NE Albuquerque 36 30-Apr-96 Caspian Homes 218 Dallas NE Albuquerque 20 29-Feb-96 509 Dallas SE Albuquerque 36 05-Jun-96 Falcon View 9272 Eagle Ranch NW Albuquerque 208 24-Oct-96 Shan Ann Plaza 200 Figueroa NE Albuquerque 124 20-Aug-96 Arrowhead Ridge Hwy 528 RR Albuquerque 160 01-Aug-96 Telegraph Hill 7000 Louisiana NE Albuquerque 200 15-Oct-96 La Cienega/Marble Gardens 7701 Marble NE Albuquerque 22 19-Jul-96 Mediterranean Garden 3900 Montgomery NE Albuquerque 180 09-Aug-96 Oak Tree Park 5800 Osuna NE Albuquerque 320 07-Aug-96 La Cienega/Ken-Del 1121 Pennsylvania NE Albuquerque 29 19-Jul-96 Villa Ladera 6101 Sequoia NW Albuquerque 280 28-Jan-96 Canyon Point 301 Western Skies SE Albuquerque 136 20-Aug-96 Sedona Ridge 3400 Wyoming NE Albuquerque 339 19-Jan-96 Spring Park 9535 Acer El Paso 180 01-Dec-96 Iberville 5216 Carousel El Paso 29 15-Dec-96 Granada 5228 Carousel El Paso 20 15-Dec-96 Carousel Plaza 5267 Carousel El Paso 78 15-Dec-96 Fiesta Village 5500 Confetti El Paso 68 15-Dec-96 Trevino Place 10891 Edgemere El Paso 86 20-Dec-96 Crest of Shadow Mountain 345 Shadow Mountain El Paso 232 30-Jan-96 Regency Pointe 3000 Majestic Ridge Las Cruces 90 15-Nov-96 Enclave at Santa Fe 2491 Sawmill Road Santa Fe 204 18-Dec-96 Rancho Vizcaya 2500 Sawmill Road Santa Fe 212 18-Dec-96 TIRED - Properties that were actively on the market in 1996 but did not sell Apartment Name Street City Units Source_Date 220 Charleston NE Albuquerque 32 11-Aug-96 Sunspring 5001 Coal SE Albuquerque 102 29-Dec-96 Rock Creek 3135 Comanche NE Albuquerque 120 05-Jul-95 Gales 6321 Gibson SE Albuquerque 26 01-May-96 Gallery #3 515 Madeira SE Albuquerque 36 14-Oct-96 Casa Salanas 1225 Menaul NW Albuquerque 20 28-Sep-96 200 Pennsylvania NE Albuquerque 39 10-Jun-96 Phoenix 5410 Phoenix NE Albuquerque 28 07-Feb-96 Pueblo Alto 700 Truman NE Albuquerque 20 07-Feb-96 MIRED - Refinanced in 1996 (does not include sales with new loans Apartment Name Street City Units Refi_Date Del Norte West 6130 4th NW Albuquerque 105 01-Sep-96 La Vida Buena 2201 Ambassador NE Albuquerque 154 03-May-96 Tramway Ridge 4777 Tramway NE Albuquerque 112 27-Sep-96 Brooks (The) 5328 Montgomery NE Albuquerque 136 01-Sep-96 Skyline 13500 Skyline NE Albuquerque 64 01-Sep-96 River Oaks 230 Riverside W Carlsbad 33 01-Sep-96 HIRED- Permitted or under Construction in 1996 Apartment Name Street Units Permit_Date Villa Allegre 1450 Bridge SE 92 25-Mar-96 Bridge Point 8200 Bridge SW 216 10-Jun-96 Taylor Ridge Coors 220 16-Jul-96 San Miguel del Bosque 9180 Coors NW 161 of 28-Apr-96 1620 Indian School NE 150 25-Apr-96 4801 Irving NW 12 20-Aug-96 4801 Irving NW 12 30-Aug-96 4801 Irving NW 12 04-Sep-96 4801 Irving NW 12 14-Sep-96 4801 Irving NW 12 15-Sep-96 4801 Irving NW 12 16-Sep-96 6148 Kiva NW 4 28-Jun-96 Rio Volcan 1919 Ladera NW 110 of 230 01-Aug-96 6800 Los Volcano NW 48 08-Oct-96 615 Menaul NW 12 15-Jan-96 615 Menaul NW 12 19-Mar-96 615 Menaul NW 12 29-Dec-96 180 Monte Alto NE 6 10-Jun-96 4440 Morris NE 124 04-Jun-96 213 Princeton SE 2 13-Mar-96 215 Quincy NE 4 25-Sep-96 1111 Silver SW 10 07-Jun-96 419 Stanford SE 2 21-Aug-96 433 Tennessee NE 8 09-Apr-96