ABQ remodeling off to a moderate start

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Home improvement activity, which nationwide is the construction category closest to recovering from the downturn, appears to have gotten off to another routine start in the Albuquerque metro area.

As an indicator of home- improvement activity, the city of Albuquerque issued 221 building permits for single-family alterations and additions in the first quarter, the same number as in the first quarter of 2013 and within a half-dozen permits of 2012 and 2011.

The permit level of the last four first quarters is running 14 percent below the 15-year average of 256 permits for the quarter.

The metro is lagging behind the national trend of a surge in remodeling activity, driven in part by a broad recovery of sale volumes and prices in single-family housing across the country.

In my view, the remodeling market is directly related to home values and consumer confidence, said Larry Chavez, president of Albuquerque-based Dreamstyle Remodeling. If they are on the rise, remodeling activity improves.

Home prices in the metro have improved at a comparatively mild pace over the past two years. As of the fourth quarter, for example, the median sale price in the metro rose 3.3 percent from a year earlier, compared with 10.1 percent nationwide, according to the National Association of Realtors.

The metro continues to lose jobs: a 1.2 percent year-over-year job loss as of February, compared with 1.5 percent job growth nationwide. Continued job losses are symptomatic of a persistent economic malaise that does not lend itself to strong consumer confidence at the local level, Chavez said.

Chavez is on the steering committee of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, whose Leading Indicator of Remodeling Activity forecasts consumer spending on home improvements will increase by double-digit percentages into the third quarter.

Spending will drop off in the fourth quarter but remain at an elevated level, as the housing recovery nationwide loses some of its momentum.

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ABQ remodeling off to a moderate start