Spotlight on NM’s pandemic economy
COVID-19 resulted in winners and losers
Steve Pompei had a surprising answer when asked how the COVID-19 pandemic affected his Santa Fe-based home remodeling business in 2020.
“2020 has equaled or surpassed my biggest years,” said Pompei, founder of Pompei’s Home Remodeling, in an interview earlier this month. “Go figure.”
But the pandemic also brought tough challenges: high costs and delays in getting building materials, worries about keeping his employees safe and more.
For Desiree Aragon, an Albuquerque resident and former waitress, the pandemic brought unemployment, a move across the country and back, and the end to a dream she had just started to build.
“I had to let go of an opportunity in order for me to be in a situation where I could create all of my life, not just a thriving career,” she said.
After a year of upheaval and changes, Aragon is ready to try a new dream.
“I just need to keep focused on a life that I know that I want, and trust the process,” Aragon said.
Pompei’s and Aragon’s
stories are just two from an unforgettable year in New Mexico.
The pandemic has left thousands of New Mexicans — particularly those in low-income and vulnerable positions already — dealing with layoffs and unpaid bills.
On the other hand, 2020 brought success to some sectors, new residents to the state, lower prices for medical cannabis patients and, for a few New Mexicans, a renewed sense of clarity.
Here’s a snapshot of seven New Mexicans from different industries whose lives changed once the pandemic hit — and who are looking ahead to a brighter tomorrow.
Construction
Once the virus reached New Mexico in March, Pompei said, what had been a normal year went into hyperdrive with new, lucrative projects.
Less than a month into 2021, with the virus still rampaging across the state and country, Pompei said he’s already booked projects for the entire year.
“I didn’t do as many projects, but they were high-dollar projects,” he said. “… And now they’re spilling into 2021 and 2022.”
The pandemic also had downsides for Pompei and his company. Plywood more than doubled in price, when it was even available. Capacity restrictions, slow permitting and other issues meant projects stretched on much longer than they normally would. Pompei said he felt “handcuffed” by the situation.
“It’s painful,” he said. “Everything about the construction industry right now is painful.”
Pompei, who has offered kitchen, bathroom, window, stucco and other remodeling services in Santa Fe for 33 years, attributed the explosive growth during the pandemic to a few factors.
He said more people, stuck in their homes because of travel and business restrictions, wanted to take on home improvement projects they had been putting off.
“They have the time, apparently they have the money, so they’re doing it,” Pompei said.
He added people coming to Santa Fe from other states have been buying houses and remodeling them during the pandemic.
“It seems like people want to be here,” Pompei said.
Still, when a client asked Pompei whether he’d recommend starting a project now, he said “no,” given all the hassles that go with construction in the age of COVID-19.
“It’s taking 10 times longer to get projects complete; it’s taking 10 times longer to procure materials; they’re 10 times as expensive,” he said.
Processing shutdowns early in the pandemic mean that appliances, garage doors and other accessories are taking months longer to arrive, Pompei said.
The production backlog, along with a severe hurricane season that destroyed a portion of the nation’s lumber supply, meant plywood and other lumber can cost more than twice as much as before the pandemic. There were times in 2020 when New Mexico lumberyards told Pompei they were out of plywood altogether.
Pompei said he didn’t have any COVID-19 cases among his staff, but some contractors he worked with weren’t so lucky. This meant plumbers, painters and other subcontractors were left short-handed and waiting for COVID-19 test results for crew members, which sometimes slowed work to a crawl.
“We’re sitting here waiting,” Pompei said. “No one’s at the job site, and we’re just waiting.”
While he said he would happily trade less work for fewer hassles, Pompei acknowledged he’s grateful for the opportunity to keep himself and his staff working through difficult months.
“I mean, who else in this pandemic is busy like this?” Pompei said. “Most people are suffering, and my guys are getting up and going to work every day.”
Would-be entrepreneur
This time last year, Desiree Aragon was waiting tables, substitute teaching and looking for a home where she could pursue her passion: Setting up an in-home day care center to help kids prepare for kindergarten.
What a difference a year makes.
The pandemic caused both streams of income to dry up in March and put her search for a house on hold, forcing her to reevaluate what was important to her.
“It really put a halt on me being able to look for a home and have this dream of mine be fulfilled,” Aragon said.
Having grown up with a single parent on welfare, Aragon said going on unemployment as an adult was a psychological challenge for her.
“I really had to humble myself,” she said.
After looking for work for months, Aragon, 39, landed a short-term job as a nanny for a family visiting from New York. One day after she accepted the job, the family announced they were moving back to New York and asked Aragon to go with them.
She did, and she stayed from June until early August — longer than she expected. When she got an offer to make the job and the move permanent, it was a difficult decision.
Ultimately, Aragon said she had unfinished business in New Mexico.
“I didn’t want to be away from home at the time,” Aragon said. “I wanted to find something here. I wanted to accomplish my goals.”
But the pandemic didn’t make it easy.
Aragon got a job as a server at P.F. Chang’s in October, but after just three weeks, another round of lockdowns cut her hours down to nearly nothing. Once a seasonal job ended at the end of December, Aragon said, she had to go back on unemployment.
But despite all that, Aragon said, she ended 2020 with a renewed sense of purpose. When she was looking at jobs, she was drawn to those that required a background in social work. Because of that, she said she’s planning to start pursuing a bachelor’s degree in the field later this month.
“I already feel like I have a lot of life experience in this field — I just need to get the degree,” Aragon said.
Real estate
The pandemic hasn’t stopped Albuquerque’s explosive growth in home prices, but it certainly added several new items to real estate agents’ to-do lists.
Local real estate agent Christine Lohkamp, with Signature Southwest Properties, said that when she shows a house, she now arrives ahead of other agents to turn on lights and open interior doors and cabinets. That reduces the chance that potential buyers will contaminate surfaces.
“We’re trying to limit the amount of people touching stuff,” she said.
It’s only an extra 10 to 15 minutes per house, Lohkamp said, but it adds up — particularly given the tremendous demand for homes in Albuquerque in 2020.
“If we have to work longer, then we have to work longer,” Lohkamp said.
Even with the virus affecting large portions of the economy, a combination of low interest rates, limited supply and desire for more space pushed Albuquerque home prices to levels the market has never seen.
The median sale price for a detached single-family home in metro Albuquerque grew by more than 12% year-over-year in the third quarter of 2020. Sometimes real estate agents cleaned and set up a house in the morning and return to find it sold by the evening.
“I’m getting ready to put a house on the market on Thursday,” Lohkamp said earlier this month. “And it’ll be sold before Friday.”
Buyers came from Colorado, California, Virginia and elsewhere, largely searching for the extra space the Land of Enchantment offers. The competition for homes was so intense that Lohkamp encouraged step-up buyers who couldn’t afford two mortgages to sell their homes before closing on a new one. In some cases, she said, that meant Albuquerque buyers had to move into short-term apartments or move back in with family before finding their dream home.
“They have to be ready to move, and be quick,” Lohkamp said.
This meant real estate agents such as Lohkamp stayed busy during the year.
They also had to adjust to changing sets of restrictions. Real estate was deemed an essential operation during the initial wave of business shutdowns in March but was not exempted when cases spiked in the fall.
The new rules closed real estate offices across the state, but it didn’t stop home sales. Lohkamp said she and other real estate agents got used to having clients sign documents outdoors in the cold and waiting in their cars while potential buyers toured homes alone.
Despite the challenges, Lohkamp said she’s made a point to attend every closing by her clients, whether in person, by phone or over platforms such as Zoom.
“A good majority haven’t done this before, and it’s a little scary,” Lohkamp said.
Oilman
This time last year, New Mexico’s economy was humming, and oil and gas — the state’s most lucrative private industry — was a huge part of that.
Raye Miller, president of Regeneration Energy Corp. and mayor of Artesia, said he and others in southeastern New Mexico were optimistic heading into last year, citing the record prices for oil and gas leases in 2018 and 2019 among other positive indicators. And in the first couple of months, Miller said, that optimism was warranted, as capital investment and new drilling and development soared. At least for a little while. “Obviously, that changed substantially with COVID,” Miller said.
Few industries were hit harder in the early days of the pandemic. The virus and associated restrictions kept travel to a minimum, which meant fewer people were using oil and gas. The industry made national headlines in April, when oil prices briefly turned negative for the first time.
The state rig count dropped from 117 in mid-March to just 41 by September as producers such as Regeneration waited for the price of oil to rebound before resuming operations.
“Each company had to take a hard look at what their cost of production was,” Miller said.
During the depths of the shutdown, Miller said, there wasn’t much to do, besides wait — and occasionally perfect his golf game.
“It wasn’t a pleasant time.” Miller said.
Perhaps surprisingly, however, Miller said, the industry has slowly but steadily started to recover in the past few months. Crude oil prices have rebounded to above $50 per gallon this month, not far from where they stood in February 2020. Miller said the recovery has given Regeneration and other producers a chance to pick a few projects back up — not on the same scale as before, but enough to breathe a bit of life back into the industry after an unprecedented year.
“It’s been, certainly, a year of struggle,” Miller said. “But at this point, the future certainly looks a little bit brighter.”
Medical cannabis
About a month into the pandemic, medical cannabis patient and industry advocate Jason Barker said, he saw something he’d never seen at a New Mexico dispensary before: lines stretching outdoors.
New Mexico businesses of all shapes and sizes experienced lines due to capacity restrictions in 2020, but Barker said standing outside a dispensary can make you a target.
“We’re not just standing around to go into a grocery store; we’re standing outside a dispensary with typically a lot of cash in the wallet,” Barker said.
Still, Barker acknowledged it was a relatively small inconvenience in what was largely a year of tremendous growth for the state’s medical cannabis program.
By the end of 2020, more than 104,000 New Mexicans had enrolled in the program — up from around 81,000 in January 2020. As of the third quarter of the year, the state program was on track to eclipse $200 million in sales for the first time.
However, advocates including Barker had to push to keep dispensaries open during the shutdowns. Barker said he worked with the national cannabis organization Americans for Safe Access to ensure dispensaries would be classified as essential operations during the first round of restrictions.
Experts say the uptick in enrollment was at least in part because the pandemic and associated travel restrictions made it more difficult for New Mexicans to travel across state lines to purchase cannabis — and made it harder to move black market cannabis across the Mexican border.
But Barker, who has been enrolled in the program since 2015 for post-traumatic stress disorder, said the stress and anxiety of an unpredictable year prompted existing patients — himself included — to begin using more cannabis.
Barker noted that dispensaries around the state approached the pandemic in different ways. Some, such as Urban Wellness, set up a delivery system that allowed patients to order online, pull into designated parking spots and pick up cannabis without leaving their cars.
“With it being as cold as it is, it’s, like, ‘Shoot, I don’t need to be getting sick standing in line,’ ” Barker said.
The uptick in enrollment also prompted some dispensaries to undercut one another to pull in more customers. Barker said he saw grams priced as low as $7 — the lowest he’s seen in years.
New Mexico lawmakers are considering legalizing cannabis for recreational use.
While Barker said he’s concerned about the long-term future of the medical program if recreational cannabis is legalized without protections in place for the existing program, he expects to see another shortterm bump in sales because of the legalization conversation itself.
“The legalization debate stresses out the patient community so much, they end up having to go buy more cannabis,” Barker said, laughing.
Tourism
In April, Albuquerque outdoor tour and gear rental company MST Adventures made just $42.
Things improved as the year wore on, but owner Corey Spoores said state restrictions on group size and out-of-state visitors made life hard on him and his guides for a lot of 2020. A business that at one point had two owners and three guides is now down to just Spoores.
“A lot of it’s just kind of trying to scale back, be lean and pivot,” Spoores said.
Few sectors were hit as
hard by the pandemic as New Mexico’s tourism industry. As of November, the state’s leisure and hospitality sector, which includes tourism, had shed 19,400 jobs year over year, more than one-fifth of the total jobs in the sector, according to data from the New Mexico Department of Workforce Solutions.
Industry experts attribute the steep drop to people being more reluctant to travel during the pandemic and state restrictions requiring visitors to quarantine upon arrival to the state.
Spoores said that even after the state allowed outdoor businesses like MST — which offers guided stand-up paddleboarding, snowshoeing and other outdoor tours — to operate again in late spring, tour capacity was originally limited to five people — four guests and a guide — which was logistically challenging and not cost-effective.
“That’s been a hard adjustment,” he said.
The cancellation of the Albuquerque International Balloon Fiesta, which Spoores described as “our Super Bowl week,” was another blow for the business. He said the company pulls out all the stops during that nine-day period and typically does about $10,000 in sales. That’s about $7,500 more than MST pulls in during a typical week.
“That’s a magical time for every business in the greater (Albuquerque) metropolitan area,” Spoores said.
Still, Spoores said, there were opportunities during the pandemic as well. Limitations on indoor activities at the start of the pandemic created a rush on outdoor gear, and MST’s rental business boomed. Renting paddleboards, kayaks, surfboards and other gear, which was about one-third of the company’s business prior to the pandemic, quickly became a majority of MST’s business.
“That’s really what kept us kind of running, treading water with our head up high,” Spoores said.
Despite the challenges, Spoores said tours are still running, albeit with social distancing, different routes and limited food and drink options.
“We want everybody to have the same happy and healthy experience,” Spoores said. “We’re just trying to follow the rules as best we can.”
Server
Even before Gov. Michelle Lujan Grisham’s first emergency health order banned indoor dining in mid-March, some Albuquerque restaurants saw a noticeable drop in traffic as fears about the pandemic began to take hold.
Anna Grey, who had worked as a server at D.H. Lescombes Winery & Bistro for about a year before the pandemic, said business at the normally busy restaurant had slowed to a crawl by St. Patrick’s Day.
“We had never experienced anything like this ever before,” Grey said.
When the business shut down indoor dining, Grey and other employees were given a choice of being laid off or staying on in a limited capacity to handle takeout. On the advice of her parents, Grey opted to be laid off.
“That was super weird,” said Grey, 23. “It was, like, the first time since I was 17 that I had ever not worked.”
Grey lost her job during the largest wave of layoffs in New Mexico history. More than 60,000 New Mexicans filed initial unemployment claims during the final two weeks of March, far more than any comparable period on record, according to the Department of Workforce Solutions. A significant chunk of those were from the leisure and hospitality industry, which includes bar and restaurant workers such as Grey.
Grey said the state unemployment portal, which wasn’t set up to handle the initial crush of claims, crashed several times before she could get approved.
Grey was eventually called back to work at the winery in July and had to learn a whole new set of procedures to serve during a pandemic. She said the restaurant changed its workflow to ensure that any plate or utensil touched by a customer was cleaned promptly.
With only outdoor dining allowed initially, Grey said, servers got used to managing packed patios during summer heat and thunderstorms.
“It was a very, very large learning curve, but I think we did such a good job of finding our new normal really quickly,” she said.
Grey said the restaurant was busy, particularly during late summer. It had record sales in August, she said, and business cooled off only when the weather did.
“Every night, we had a line out the door,” she said.
Dealing with customers who didn’t understand or wouldn’t follow the new rules on wearing masks and social distancing was Grey’s least favorite part.
“Some people just didn’t want to listen to the rules, and they didn’t like it when you told them to,” she said.
Grey was laid off again in November when restaurants were forced to cease operations again. This time, she said, she might not go back. She plans to look instead for a line of work that’s less reliant on tips.
“I have no guaranteed income, and then I have to deal with people having even less respect for me than they had before,” Grey said.