Archives for April 2014

Before the Great Recession, household wealth peaked at $68.8 trillion or $254,600 per person. If that seems like more money than you have, it’s because wealth isn’t evenly distributed. The rich have much more of it than the poor. As a result, back in 2007 the median family had wealth of just $126,000 while the average family had $584,000. Then the recession hit, house prices plunged, stock markets cratered and household wealth hit a low of $56.6 trillion in 2009. Since then stock markets around the world have staged a remarkable recovery and house prices have been steadily recovering. As a result, household wealth now stands at $80.7 trillion, almost $12 trillion more than before the recession. So things have more than recovered, right? Not quite.
Since 2007 there has been inflation and the US population has grown by 20 million people. As a result, inflation-adjusted per capita wealth is now $254,000, just a shade less than it was before the Great Recession. So we are at least back where we were before the recession hit, right? Not so fast. The problem is that the asset price recovery has been profoundly unequal and that has caused the distribution of wealth to change dramatically. And that has huge implications for the economy.
Homeowner equity hit $10 trillion last quarter, and while way up from a low of $6.3 trillion in 2011, it’s nowhere near the pre-recession high of $13.4 trillion. By contrast, equities have soared and are now worth almost $23 billion, way more than their pre-recession high of $18.3 trillion. The economic kicker is that equities are primarily owned by upper-income households, while home equity is the major source of wealth for everybody else. This means that while the rich are roughly $5 trillion wealthier than they were before the recession, all other households are about $3.5 trillion poorer. And while the upper classes spend more when their wealth increases, it’s nothing like the increase in spending that occurs when the rest of the population feels better off.
A huge chunk of middle class spending is the result of tapping into home equity via cash-out refinancing. Regrettably, despite rising home prices many households are still under water, credit remains harder to get than ever before, and many households now have mortgages with extremely low interest rates and are simply unwilling to tap into their home equity. As a result, mortgage equity withdrawal has nearly stopped. After peaking at $320 billion in 2006, it was just $32 billion last year, a decline of almost $300 billion, and that is the highest it’s been since 2010!
In addition to the rich, another group that has done well is older Americans. Families headed by someone under 40 have on average recovered only one-third of their lost wealth, but families headed by someone middle-aged or older have recouped all their losses as more of their wealth is in stock and less in housing. And regrettably the middle-aged and the elderly, like the wealthy, are less likely to spend their capital gains than younger middle class families.
As a result of the profoundly uneven wealth recovery, spending on luxury goods has done very well but firms that rely on middle class spending are not enjoying nearly as much of a renaissance. For that to change wages will have to start rising.
Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at econ70.com.
By: Elliot Eisenberg (GraphsandLaughs)
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LAS CRUCES >> Multiple apartment projects broke ground last year and are in various stages of development, but they all are or should be accepting tenants this year.
The Lofts at Alameda
The three-story structure at the corner of Alameda Boulevard and Court Avenue near downtown Las Cruces, looms above surrounding buildings as workers continue their daily construction of The Lofts at Alameda.
When finished, the 38-unit modern apartment complex “will showcase loft-style features such as high ceilings and exposed coiled duct work,” the company reports on its website.
Each unit will have energy-efficient appliances including a washer and dryer. Every loft apartment will have a balcony facing Court Avenue.
One of the owners, John Hummer, said that he expects the complex to open in late summer.
“Based on our in-depth market surveys of potential renters, we are confident that we will be able to lease our 38 units,” Hummer said. “We are a niche product in the rental community. Being downtown, The Lofts are in close proximity, walking distance, for over 4,400 employees who work downtown.”
Rent for one-bedroom apartments starts at $725 per month while rent for two-bedroom units starts at $840.
The website is loftsatalameda.com.
Missions at Sonoma Ranch
Another of the new Las Cruces apartment complexes is near Sonoma Ranch Boulevard is ready to start accepting tenants. Joanne Achen with TND Real Estate Group reports that the Missions at Sonoma Ranch at 1871 El Presidio has 22 units with two already rented, six more available immediately and the other 14 available sometime this week.
All the apartments have two bedrooms and two bathrooms. Ground was broken a year ago on the project and the complex was developed by a group of investors led by James Coles of Coles Communities, LLC.
A grand opening celebration is scheduled for 11 a.m. to 2 p.m. on Saturday with free food and drink.
Coles told the Sun-News during construction that a marketing report conducted for the complex pointed to the fact that two-bedroom facilities was the best way to go.
“What the marketing report said is that three-bedroom apartments were out,” he said. “In order to make this work, you’d have to rent a three-bedroom (units) for $1,250 a month. You can rent a house for that.”
Coles said that the units are 1,000 square feet in size.
“Most two-bedroom apartments are like 820,” he said.
Applications can be made on the website missionsatsonomaranch.com or in person at the property. Office hours of 9 a.m. to 5 p.m. Monday through Friday and 9 a.m. to 1 p.m. Saturday. More information can also be found by calling 575-640-9598. The complex is offering a move-in special of $950 per month with a $500 deposit.
Beverly Heights
Another of the new Las Cruces apartment complexes is under construction on 3 Crosses Avenue, near the 99 Cents store that sits at the corner of 3 Crosses and North Main Street.
Summit Development is building the first phase of Beverly Heights, part of a planned $14 million, 200-unit complex. The first phase includes 40 units in two buildings.
In Phase I, rent for a two-bedroom apartment starts at $700 a month and $810 a month for a three bedroom.
More information can be found online at summitbuildinglc.com. Summit Development can be reached at 575-382-4390.
Sonoma Palms
In addition, the Sonoma Palms Apartment Homes, located at 4260 Northrise Drive, held a ribbon-cutting and grand opening celebration last year.
The facility has multiple buildings open with more on the way.
Depending on floor plan, rent can range from $900 to $1,400 a month.
The phone number is 575-382-5611 and the website is sonomapalms.com.
By: Brook Stockberger (Las Cruces Sun-News)
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Thanks to all of the brokers, sponsors and guests who attended the April CCIM Deal Making Session. Over 9 million dollars of commercial real estate properties available for sale were presented from all over New Mexico.

I. Executive Summary
NM serves as a North/South by-pass for vehicles traveling through Santa Fe and a WIPP route for low level nuclear waste traveling to the Waste Isolation Pilot Project near Carlsbad. As a high-speed limited access bypass through Santa Fe NM 599 provides local Santa Fe traffic an additional North South travel corridor and alleviates traffic congestion along Cerrillos Road and St. Francis Drive.
NM 599 was designed as a controlled access facility with interchanges at all access points. Currently, it is a limited access facility with 12 allowable access points. There are five interim at-grade intersections along the corridor where right-of-way has been preserved for future intersections. Two additional access points at Jaguar Road and Caja del Rio have not been constructed. Changes in regional traffic demand and issues related to the alignments of the intersections of other roads with NM 599 have necessitated the need for reanalysis of the corridor.
This study has been coordinated with two concurrent studies sponsored by the New Mexico Department of Transportation: the Interstate 25 Corridor Study (from NM 550 to Old Pecos Trail) and the St. Francis Drive Corridor Study (from I-25 to NM 599). Each of these facilities provides different levels of transportation service and addresses different needs, but the three corridors also accommodate similar and overlapping travel demands. St. Francis Drive and NM 599 both serve north-south through travel. St. Francis provides greater accessibility to property, while NM 599 provides higher mobility. The Interstate 25 corridor provides interstate access to NM 599 and St. Francis Drive, but has the potential to interconnect with other major streets, which could influence the operation of both NM 599 and St. Francis Drive. The executive summaries of the I-25 Corridor Study and the St. Francis Drive Corridor Study can be found in Appendix A.
Purpose and Need
The crash rates on NM 599 for the period from 2003 through 2007 were below the statewide average; however…
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