My father's bad investment
SOMETIME in 1965, a salesman from the Horizon Land Corporation sat down on my parents' floral-patterned sofa on Long Island. Before he left, he persuaded my father - then earning about $8,000 a year - to buy two half-acre lots just south of Albuquerque, in what he promised would soon be the bustling town of Rio Grande Estates. The price was about $1,000 a lot, payable in monthly installments.
Even then, I could tell that the salesman, the type captured perfectly by David Mamet in the play "Glengarry Glen Ross," was laying it on thick. But I was too young to know which of my parents was right: my father, convinced a foothold in the booming Sun Belt would secure his family's future, or my mother, sure that he was throwing their money away.
Forty years later, I know. At most, I could get $500 for each plot, according to Jo Ann Ervin, an appraiser in the office of the tax assessor of Valencia County, N.M., who broke the news to me recently on the telephone.
But how is it possible, at a time when everyone seems to be making a killing in real estate, that my father's land is worth less than he paid almost half a century ago?
Simple. "Nobody wants it," said Ms. Ervin, her statement a stark reminder that supply and demand, not surmise and desire, determine real estate prices.
With the encouragement of my father - now 82 and living in New Jersey - I decided to learn more about his failed investment.
It was a sunny fall day when I stopped into Ms. Ervin's office in Los Lunas, the Valencia County seat. Ms. Ervin, who addressed me as "sweetie pie," was ready to help me find my father's two half-acre parcels, southeast of Belen. My father, she informed me, has been paying his taxes ($5 a year), which means his title to the land is clear.
He was one of thousands of buyers of Horizon Land. Valencia County, she told me, covers 900 square miles, and at one point Horizon owned about a quarter of the county. (The company, she said, stopped operating there about seven years ago, when it sold its remaining lots to a rancher.)
Ms. Ervin, who has worked for the county for 16 years, was ready with maps that showed the locations of my father's land, which she knew as Unit G, Block 942, Lots 16 and 17, within Rio Grande Estates. Ms. Ervin showed me where those lots were in relation to State Highway 47 and to one of the few local landmarks, a Mennonite Church.
On the maps, my father's lots are on a street called Natchez Loop, where it bends to the west just north of Turbine Road. Trouble is, those roads were never built.
Nor, Ms. Ervin warned me, were there signs of any kind. If I wanted to find my father's land, I would just have to estimate directions and distances after turning off the highway into the desert. Ms. Erwin wished me good luck, and I set off in the four-wheel drive I had rented for the occasion.
Half an hour later, I was in what looked like one of the emptiest places on earth. The land once owned by Horizon lies between the Manzano Mountains, to the east, and the Rio Grande to the west.
But none of the greenery of the river valley reaches this elevation; the land is bare, except for bits of sagebrush, and an occasional beer can or candy wrapper. From Highway 47, I could see for miles in every direction, and I hardly saw a house.
As it turned out, Horizon never made the promised improvements, and virtually nobody moved in while the company was selling the land. It is possible to build on it: The local utility will bring in electricity (for $1,500 a pole, according to Ms. Ervin), and wells, which can cost on the order of $10,000, will bring water. But who would want to live here? Despite the lack of landmarks, I was able to estimate the distance from the church to what might be Turbine Road. I turned right, then right again onto a dirt road that could be the shadow of Natchez Loop. There was a sign where I left the highway. Its black letters intoned: "You shall not desire anything that is your neighbor's." Odd, because there are no neighbors.
A few minutes later, I was at a bend in the road that I was almost certain marked the location of my father's lots. As it turns out, there was a house right across the street, one of just a few in the entire region. The owner, Vicki Zamora, bought the house in the 1970's; she said it was built in the 1950's, before Horizon got there. (At the time she moved in, she said, the nearest phone was four miles away.) Ms. Zamora, a broker with Exit Altura Realty, and her husband, David, raise horses.
"We're thinking of buying some more land around the house," she said. But she is having trouble persuading owners to sell the land at a realistic price. "The Horizon buyers are mostly in the East, and they think it's worth a lot of money," she said. "It's hard to explain the situation to them. They just don't get it."
At the same time, lots are abandoned all the time, when their owners (many of whom have died) fail to pay the taxes for more than four years. Once abandoned, the lots are put up for sale by the state at twice-annual auctions.
Ms. Zamora's nearest neighbors are a Mennonite family, the Hertzlers, who have come here for the isolation. They built their house on five lots about a year ago. They tried to buy a sixth lot, which would have given them a rectangle, but the owner, who lives in Florida, refused to sell. "It isn't worth anything to her," said Mabel Hertzler, wistfully, from the front door of her modest house, with three toddlers clinging to her skirt.
I drove back north to Ms. Ervin's office in Los Lunas. "Are you sure it's only worth $500 a lot?" I asked, hoping she made a mistake.
"Some people," she said, "have managed to get a little more on eBay."
Had my father put $2,000 in the bank, at 6 percent interest compounded annually, he would have about $40,000 by now. Instead, we have $1,000 worth of desert.
Apparently, my father hadn't read the Oct. 27, 1962, issue of The Nation, which included Stan Steiner's exposť of Horizon and its competitors. Mr. Steiner wrote, "Given the romantic dreams obtainable for $10 down and $10 a month, the generous ethics of newspaper advertising departments and the facilities afforded by the U.S. Post Office, the sales of desert wasteland, by mail order, have burst into a boom that would have made old Doc Holliday, of Tombstone, envious."
Ms. Zamora is more direct. "Your father was scammed," she said. And he wasn't alone. According to Ms. Zamora, Horizon acquired the land from ranchers for a tiny fraction of what the company then sold it for. "There's still a bitter feeling around here, after all these years," Ms. Zamora said.
Will the lots ever be worth more than my father paid for them? No one can say. On the one hand, they are unimproved land in an isolated patch of desert. On the other hand, Albuquerque is expanding, and some of the movement is southward, toward Belen and Rio Grande Estates.
I decide to ask my father to sell me the land. Then I can be the one to pay the taxes, sending $5 to Valencia County each year.
And 40 years from now my sons may reap a windfall.
Or, more likely, they will be wondering the same thing I'm wondering now. What was Daddy thinking?