State Real Estate Market Outlook
Realty Market Outlook New Mexico State Profile - Spring 2006
An expanding New Mexico real estate market is prompting strong demand for construction lending
Driven by solid employment gains and favorable financing rates, New Mexico commercial and residential markets remain vibrant, contributing to increases in construction lending concentrations. Additionally, as the 65 years and older segment continues to grow (currently seventh fastest rate in the country) demand for healthcare, leisure and hospitality, and housing should remain strong.4 As of third quarter 2005, construction and development loans at the state’s insured institutions represented 16 percent of total loans, more than twice the ratio for all FDIC-insured institutions.
Rapid commercial real estate (CRE) growth has also led New Mexico insured institutions to a record level for CRE lending concentrations. CRE loans currently make up 29 percent of total loans for New Mexico institutions, more than twice the national rate. At present, performance of CRE loans at the state’s insured institutions remains very good, with reported past-due and charge-off rates among the lowest in a decade and below the national averages.
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