Thoughts on Albuquerque?

[Bobby Larsen]

I’ve been spending a lot of time visiting and researching the Albuquerque market. I’m curious to hear others thoughts on the market.

My take is that it went through a lost decade and still to this day hasn’t recovered from the financial crisis. It was experience 1-2% annual population growth since the 1950s but 0.3% annually since the GFC. Budget cuts led to the police force being reduced and as a result crime spiked.

However, I’ve seen very promising signs over the past couple years. They’re aggressively hiring police officers, attracting businesses, and signing up projects left and right to revitalize downtown, old town, and the university district. With prices skyrocketing in Phoenix and Denver, cost of living in Albuquerque must be able to draw people and the weather seems pretty nice. These are all good signs but turning around a metropolitan area is a slow process and takes a lot of work.

That’s just my ramble on the market, I’m interested in how other people see the market.

[Bill S.]

@Bobby Larsen so no first hand experience with actual money in Albuquerque but my father and step mother have owned property there along with my siblings. My sister in law and her husband live there as well. I seriously looked at investing there when my family started investing. I worked for a company that had an office there as well and my father was stationed there when he was in the army years ago. I have a friend from High School and college that lives there and works on the base as a scientist. So lots of 2nd hand info, some current and some past.

First of all, the weather. It seems like it would be a nice place to live as it is in the South part of the country so should be generally warmer. My take is that it's relatively high in elevation 5,300 ft which makes it the worst of both worlds. Uncomfortably cold in the winter and blazing hot in the summer. My in-laws stayed there for a month in January helping out my sister-in-law, thinking they were going to escaping the cold of Wyoming and were sadly disappointed. It froze most nights they were there, rarely got above 50 and the sun didn't come out much. The wind blows too. The Crest acts like a dam and often holds the clouds over the city. It also contributes to the wind. Every time I have visited there in the winter, it's been windy. It's definitely not Phoenix in winter. It has many days over 100 in the summer so unlivable without central AC. 

The political landscape is has been much different that the rest of the Western US aside from the West Coast. In my opinion that is the reason the they lacked the turnaround from the Great Recession. From a business standpoint it is very parochial. The company I worked for had to open an office there and "teamed" with a local company that offered no technical contribution to the work just to get a contract with the City government. In the end, the company decided the effort wasn't worth it, closed the office and didn't pursue any more work in the area. I think if you look at the track record of City contracts, you will see a similar pattern.

If you follow the local politics, the City focuses on social programs, which are needed, but it doesn't seem to make changes that would attract and foster small business. In my estimation the approach is to go after the whale like Netflix, rather than fostering an environment that creates a Netflix and the hundreds of ancillary business.

There are areas where the wealthy of the area live but you don't see much outside of those walled communities that inspires investment and redevelopment in my opinion.

It seems like a City treading water at best. I was not inspired to spend my investment dollars there and don't regret it.