Quote of the Quarter:  Joe Romero, First Commercial Real Estate Services, Inc. -- "Months ago we hit bottom, and now we are bouncing back.  I've already seen signs of rents improving.  As interest rates trickle up, first-time homebuyers cease to exist.  They are being forced to rent temporarily because interest rates are at a breaking point for most.  The result is higher occupancy.  The first are you'll see [with higher occupancy] is the Northeast Heights, then the UNM area…It isn't justified to build a four-plex these days because rents are actually down.  The small-time landlord has to get more creative in offering more amenities…mobile home ownership affects it, too.  For what you could pay in the Northeast Heights, you could pay to own a mobile home.  That's pretty attractive to a young family."

Move-in specials highlight the city's rental market, but low vacancy rates may change that.

Todd Clarke, CCIM Grubb & Ellis|Lewinger Hamilton, Inc., concurs that the market is on the rebound.  "The market is inching up, and that's recognizable by the decreasing number of foreclosures that even the layperson can watch.  I would be surprised if we had 200 in the next calendar year, while in the 1980s in our last downturn there were 3000 in the same period.  The combination of low interest rates and a stable rental market has staved off two dozen foreclosures.  We are tracking the multifamily occupancy rate at 88%, whereas the bottom of the recent market plateau was

86%," says ClarkeClarke samples 77,000 units statewide and 59,000 units in Albuquerque on a quarterly basis.  "We are also seeing the demand recover.  Economic incentives that unit managers will offer, like one free month of rent to signup, are starting to be less and less common.  One interesting thing that we've traced is that the niche multi-family units -- like senior, luxury, student and downtown apartments -- have a 98% occupancy rate.  With the exception of student housing, these kinds of multi-family units are new to Albuquerque, and these have weathered the downturn in the market remarkably well.  The real indicator that we will notice, and it's usually six months behind the event, is job creation.  When we see significant job creation, the rental market gets very hot.  Most people won't notice that the market is really hot until they can't get an apartment."


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NEW MEXICO BUSINESS WEEKLY  -              Week of November 15th, 1999          - One Dollar