Some areas of the country are experiencing dramatic surges in population. Cities in Texas are cashing in on the movement of people who want to take advantage of the many job opportunities there.  The relocation of companies to Texas’ favorable business atmosphere has brought a lot of new people into the state and created increased demand for housing.

John Garcia, Executive Vice President, Home Builders Association of Central New Mexico

However, next door in New Mexico, that is not happening.  In fact, according to the University of New Mexico Bureau of Business and Economic Research, the state is losing population.  “New Mexico had a net loss of more than 2,500 people in 2014, the first time that has happened in decades,” Jeffrey Mitchell director of the agency explained. “This is attributable in a large part to slow employment and wage growth.”

To some people, a loss of 2,500 residents may not seem like a big deal, but for those in the homebuilding industry, it’s certainly a concern.  John Garcia, executive vice president of the Home Builders Association of Central New Mexico, said that decreasing population is a losing proposition for homebuilders.

“I don’t think it’s a crisis as much as the slow boil of the frog,” he said. “At some point, the temperature is too hot to jump out of the pot. The bigger issue is keeping our population here. We need a community that is not shrinking.”

He explained that for homebuilders, when the population is growing, there are always new people to fill the homes and apartments being built. When it’s shrinking, homebuilders have to steal residents from other homebuilders to fill their homes, which can lead to a lot of problems.

Albuquerque Business First tells MHProNews that Garcia said, “For homebuilders, the status of the population and homebuilding is a bellwether for the entire state, and if it’s static or declining, that’s troubling.” The solution, Garcia feels, is for the state to find ways to bring in a new population. He believes the two important demographics to bring to the state are millennials and active adults. Garcia, former head of the city’s Economic Development Department, said those two demographic groups have the potential to change the New Mexico economy.

Active adults, who are usually empty-nesters or retired adults, don’t just buy homes, they spend money in the overall economy, too. “They lead a good quality of life,” Garcia said. “They have money, disposable income, and they’re not a drain on things like education. They also pay into health care.”

On the other side of the spectrum, he said, homebuilders would like to see the state bring in more millennials. “They not only bring creative thinking, but they contribute to local density, and we like that,” he said.

Though Garcia said population decreases in the state won’t hurt the level of homebuilding starts in the near term, if the trend continues, it will.

Not only does decreased population hurt homebuilders, it also decreases the number of people who might be interested in purchasing a manufactured home as well as the businesses and services that support these industries. ##

(Photo Credit: Albuquerque Business First)

 

Article submitted by Sandra Lane to – Daily Business News – MHProNews.