Today, Donald Trump campaigns in Albuquerque, New Mexico, where the housing crisis he was “excited” about hit hard, leading to the loss of about 20,000 construction jobs and more than 9,000 New Mexico families facing foreclosures in 2012 alone.
Back in 2006, Trump said he hoped the housing market collapsed because it would benefit people like him. But for thousands of New Mexico families, the housing crisis was a nightmare, as they lost their jobs and homes.
TRUMP ROOTED FOR THE REAL ESTATE BUBBLE TO BURST
2007: Donald Trump: “I’m excited if” the real estate bubble is about to burst because “I’ve always made more money in bad markets than in good markets.”
Mr. Trump said he is poised to invest in depressed property as the downturn moves through individual cities. ‘People have been talking about the end of the cycle for 12 years, and I’m excited if it is,’ he said. ‘I’ve always made more money in bad markets than in good markets.’
2006: Donald Trump: “I sort of hope” the housing market collapses “because then people like me would go in and buy.”
Two years before the housing market collapsed in 2008 and millions of Americans lost their homes, Donald Trump said he was hoping for a crash. ‘I sort of hope that happens because then people like me would go in and buy,’ Trump said in a 2006 audiobook from Trump University, answering a question about ‘gloomy predictions that the real estate market is heading for a spectacular crash.’
REAL ESTATE BUBBLE BURSTING HURT NEW MEXICO
Foreclosures in the Albuquerque metro area doubled during 2008.
Homeowners facing foreclosure have doubled in the Albuquerque metro area over the past year, but not all of them stand to lose the roof over their heads.
Foreclosures in Albuquerque metro area jumped from 1 in 880 in 2007 to 1 in 415 in 2008.
The Albuquerque metro ranked 86 out of 100 cities tracked by RealtyTrac in the third quarter, with one out of every 415 households in some stage of foreclosure. A year earlier in the third quarter of 2007, the rate was much better at one in every 880 households. ‘We have seen an increase in our foreclosure numbers from the start of the year,’ said Glenn Wertheim, president and CEO of Albuquerque-based Charter Bank and Mortgage.
In 2012, foreclosures in New Mexico continued to rise, up 5% from 2011, with at least 9,200 homes lost in the year.
New Mexico is on track to finish the year with at least 9,200 foreclosures—a near 5 percent increase from last year, according to foreclosure database RealtyTrac. Santa Fe County’s foreclosure rate is among the state’s highest, with 971 foreclosures as of September.
New Mexico lost about 20,000 construction jobs as a result of the housing crash.
During the housing bubble, New Mexico had 60,000 construction jobs. Now, it’s closer to 40,000, according to Bradley. ‘Maybe we could never expect it to come back, maybe it was never going to, but it sure hasn’t,’ Bradley said. ‘Those are pretty good blue collar jobs that just kind of evaporated.’
Housing prices in Farmington, N.M. plunged 20% during the housing crash and had not recovered as of 2013.
But not every town and city is on the comeback trail. At the other end of the spectrum, there are places like Farmington, N.M. Home prices there plunged 20 percent from their peak during the meltdown and are up only 0.03 percent this year. At that rate, it would take centuries for the city’s housing market to recover. The reality is that homeowners in the city may never recoup their losses.
In 2013, Albuquerque area homes needed 20.2% growth to match the pre-crash peak, but saw growth of -0.2%.
Albuquerque, N.M. Growth needed to match peak: 20.2 percent Growth this year: -0.2 percent Most of America’s southwest saw a steep drop in home prices after the housing bubble popped, especially Phoenix and Las Vegas. New Mexico’s largest city is no exception. But while its counterparts in Arizona and Nevada have seen double-digit growth in home prices during the recovery, the housing market in Albuquerque remains in a funk.
Albuquerque housing prices dropped by an average of 3.3% each year between 2008 and 2012.
During the post-bubble years of 2008-12, the home price dropped at an average rate of 3.3 percent a year, due entirely to price drops of 4.3 percent in 2008, 7.7 percent in 2009 and 6.9 percent in 2011. Price drops like those were unprecedented in the metro.
Home building in the Albuquerque metro area was down 86 percent in 2011 and median sales prices down 16%.
The metro’s housing market peaked in 2005, when a record 12,796 existing single-family homes were sold and permits were issued for a record 8,818 new homes. The median sales price for a single-family home shot up 34 percent from 2004 to 2007. Foreclosures were rare. The housing market is a much different ball game today. Home building is down 86 percent from the construction peak in 2005. The median sales price has dropped about 16 percent from the peak value in 2007. One out of every 173 homes in the metro is in some stage of the foreclosure process.