Photo by Erin FredrichsTribune

Tribune

Cesar Loya lets paint drip off his roller as he paints the powder room in the West Side home he and his wife recently purchased in a foreclosure sale. "It just kind of fell into our laps," Loya said. "We knew we wanted it, and it went rolling from there."

Photo by Erin FredrichsTribune

Tribune

Aliza Loya admires the recessed lights her father-in-law, Antonio Loya (left), installed in her new West Side home. She and her husband, Cesar Loya, recently bought the home in a foreclosure sale and immediately began renovating it. After the deal closed, the house was appraised for $9,000 more than the purchase price, they said.

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Albuquerque's insulating bubble of economic diversity has fended off the worst of the national housing crisis, experts say.

Though industry reports show an increasing disparity between home prices and family wages, other market trends show this is a good time to be a homeowner or a homebuyer in Albuquerque.

Just don't expect to find a killer deal on a foreclosure. While foreclosure rates are skyrocketing nationwide, they've dropped in New Mexico.

The New Mexico Mortgage Finance Authority and the Greater Albuquerque Association of Realtors say the city has not suffered the dramatic sell-offs that other cities have, in large part because Albuquerque has not seen the job layoffs and home price inflation of other communities.

"We have a strong economy, a strong market," said Joseph Montoya of the New Mexico Mortgage Finance Authority. "Statistically speaking, we're not doing so bad."

Data from RealtyTrac.com, which tracks foreclosures from markets throughout the country, shows New Mexico ranked 32nd in the nation in foreclosure filings for 2007, at 3,893 homes.

The rate is 26 percent lower than 2006 and 46 percent lower than 2005.

Nationwide, RealtyTrac reported a 75 percent increase in foreclosures in 2007.

In Albuquerque, foreclosure filings rose in only two ZIP code areas last year: 87114 (by 5 percent) on the West Side and 87122 (by 43 percent) in Sandia Heights.

RealtyTrac spokesman Daren Blomquist said he's not sure why New Mexico has been stable, but one possibility is that New Mexico hasn't seen the overheated housing market other areas have, such as Las Vegas, Nev.

However, the fourth quarter isn't looking good for New Mexico: Filings were up 28 percent over the year before, even though the overall numbers were down, Blomquist said.

"(That) could indicate maybe that foreclosures are hitting the state a little bit later than in other areas," he said. "But it's probably a little too early to see if that's a trend."

Home sales in Albuquerque declined almost 20 percent in 2007, to 10,671.

But the Realtor association says that might be a result of market stabilization - 2005 and 2006 saw housing booms that simply could not continue, realtors say.

"We saw years of 16 percent growth, and those were nice years, but that's hard to sustain," said Janice McCrary, the association's CEO.

Stabilization is the buzzword around the housing industry.

Michael Sivage, an Albuquerque builder and developer, said building permits are down more than 50 percent from the boom of 2005, but still more than double than in 1990, the low point of the last housing market recession.

Sivage is on the board of the Mortgage Finance Authority, which helps first-time homebuyers in the state purchase houses and provides financial counseling.

The big question, Sivage said, is "what can we expect in 2008, 2009 and beyond?" National experts expect the housing market for new homes will continue to decline through 2008, "and then we'll see a modest recovery."

The city's relatively stable job market has helped buoy the construction industry. When buyers have trouble qualifying for loans, he said, builders don't work.

While some layoffs have occurred - Intel, PNM, Sandia National Labs - other job opportunities are developing at Mesa del Sol and elsewhere.

One nagging concern in the state's housing industry is that those new jobs won't pay well enough for families to afford homes.

The MFA report shows the median home price in Albuquerque - at which half the homes cost more and half cost less - was $200,000 last year. That means a family of four needs to earn $62,345 a year to afford the house. But the median household income in the city last year was $55,900.

Translation: The average Albuquerque family can't afford the average Albuquerque house. The difference is almost $200 a month in mortgage payments.

"And if the incomes are only moderately increasing - 2 or 3 percent - and home prices are increasing at 10 percent, then that gap continues to spread," Sivage said.

Meanwhile, the cost of building has soared - from copper and concrete to raw land.

"When you add it all up, you're just trying to break even - forget about trying to make a little profit," Sivage said.

Disparity issues aside, and assuming a family meets the requirements to purchase one, buyers in Albuquerque are much better off than many of their peers around the country. Mortgage rates are low, inventory is high and prices aren't painfully inflated.

"Are there buyers that are a little skittish? Yes," said Cathy M. Olson of Prudential Sandia Real Estate, who prepared the realtors association report. But that's due more to to "media campaigns that the sky is falling."

The MFA report notes that nationally, 20 percent to 25 percent of all mortgages are in subprime loans. In New Mexico, it's about 10 percent.

Erin Quinn, the MFA's senior policy and program adviser, says New Mexico still has work to do on the disparity between median price and average income. It doesn't have the affordability challenges of other states, but the issue is one that can't be ignored.

But, she said, the rewards of homeownership remain.

If a home's value rises 7.5 percent a year, she said, "that's better than a lot of stock. And this isn't just an investment. This is the place you are coming home to at night and making memories and having birthday parties."