Metro home construction up again in 2017

New homes are going up in the DR Horton Trails subdivision near Universe NW. (Steve Sinovic/Albuquerque Journal)

ALBUQUERQUE, N.M. — Home construction continued to improve in the Albuquerque metro area in 2017, with building permits issued for single-family homes reaching the highest level in eight years, according to the latest report from DataTraq.

Permits were issued for 1,732 homes throughout the metro area in 2017, a 6.1 percent increase from 2016, and the most since 1,669 permits in 2009.

While the needle is moving upward, building permits for single-family homes still are running at about half the pace of activity in the previous years.

Home construction has ebbed and flowed dramatically in the past dozen years. When the economy was on a tear, a record 9,445 permits were issued in 2005, and a roughly 30-year low of 1,192 were issued in 2011 on the heels of the Great Recession. For a frame of reference, an average of about 4,000 permits were issued each year in the 1990s, according to DataTraq and the Home Builders of Central New Mexico,

“It’s a marginal improvement,” said John Garcia of the HBA, adding that single-family home permits are running at half of what they should be in a region this size and not keeping pace with new household formation.

“We need to start kicking up,” said Garcia, correlating an increase in home construction to job growth in an economy that could be better.

He considers a realistic market to be about 3,000 to 4,000 new homes built per year and well represented in all segments: affordable starter homes, residences in 55-plus housing communities and pricier custom homes.

The upshot: there’s been more demand by buyers for existing homes, which drives prices up due to the limited inventory. Or homeowners stay put, remodeling and renovating their abodes.

Last year, 51 percent of new home building permits issued in the metro area were within the city limits of Albuquerque. Rio Rancho’s share was 26 percent.

In terms of permits issued, homebuilders Pulte Group, DR Horton and LGI Homes NM, generated the most volume.

Even after building permits are issued, the average single-family house takes six months from start (i.e. excavation) to completion, according to the U.S. Commerce Department.

The other UPS

United Poly Systems, a maker of plastic pipe, recently purchased a nearly 60,000-square-foot building and 11 acres in Mesa Del Sol for an undisclosed amount from its landlord SC3 Development. (Courtesy of United Poly Systems)

A local manufacturer recently piped up about its plans to grow in the Albuquerque area. Right off the bat, United Poly Systems, a plastic pipe maker, no longer leases its facility at Mesa Del Sol.

The company recently purchased a nearly 60,000-square-foot building and 11 acres of land for an undisclosed amount from its landlord SC3 Development. The building is at 5201 Hawking Drive SE. UPS has been a tenant since 2014.

“Mesa Del Sol is an incredible site that we strategically chose after a multi-state search in 2014,” said Scott Franklin, chief executive officer of UPS. “This location provides us the opportunity for continued growth in the Southwest region. We have plans to expand the existing facility to accommodate expected growth and are happy to reinvest into Mesa Del Sol.”

The Springfield, Mo.-based manufacturer took over the smaller of the two former Schott Solar buildings for its second facility at the Mesa del Sol master-planned community, opening in the spring of 2015.

The company invested about $3 million to buy and install manufacturing equipment in the 59,103-square-foot “south” building formerly occupied by Schott, a German company that opened the two-building plant in 2009 and closed it in 2012.

Launched in December 2011, United Poly makes high-density polyethylene pipe of up to 16 inches in diameter that has a variety of uses in the oil-and-gas sector as well as telecommunications and power and water utilities.

The Albuquerque operation has a similar footprint to the company’s Springfield plant, which is about 50,000 square feet with 35 employees.

Steve Sinovic is the Journal’s real estate reporter. He can be reached at ssinovic@abqjournal.com or by calling 505-823-3919.

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