Here is the Housing market update video for May. Lots of info and here are some of my takeaways. The headline continues to be a restricting supply of available homes for sale. In May we had 19% of homes sell that were on the market, in comparison the average over the past two years has been 16%. The other data point we are watching is Months Supply of Inventory, of MSI. For May it’s at 3.5, that is also the lowest in two years.
A few data points for May 2015 vs. 2016.
- Homes sold. 1033 to 1110. +7.5%
- Homes going under contract. 1111 to 1292. +16%
- Homes on the Market. 6610 to 5809. 800 less homes for sale.
- Average Home Price. $208,000 to $219,000. +4.6%
- Average price per SqFt. $109 to $113. +3.7%
The takeaway is… The Albuquerque Housing market is healthy and it looks like we are tracking at about 3-4% appreciation at the moment. Some areas are much stronger than others and the price of a home compared to other homes in the neighborhood will have a big effect on whether a home will sell quickly. Meaning, it you have a $300,000 home in a neighborhood of $200,000 homes don’t expect a quick sale. However homes that are “in the range” for a neighborhood, are priced right, and look great may have an offer in a few days.
Here is the list of open houses scheduled for this weekend. Here are a few tips and etiquette to keep in mind if you are going to go out “Open House-ing”.
- Do a little homework before heading out. Make a plan where you want to go and what you want to see on-line first.
- Be polite and respectful to the host and home. People are letting you in their private space, respect that. The host (Realtor or Owner) will most likely want to get your contact information, give it to them, If you already have an agent just let them know.
- If you find a home you like, have YOUR Realtor schedule a follow up showing. This will avoid confusion on who is representing you.
- DON’T make yourself at home… think of it as visiting a museum. Look but don’t touch. Keep your kids with you.
- Hold your criticism. Not every home is for you and thats fine, just wait till you are back in your car to share.
Happy house hunting…
Q1 2016 highlights…
- Home sales (units) up 10.5%
- Homes for Sale down 9%
- Pending sales up 23%
- Average price per square foot up 5% (Suggesting home prices are increasing)
Hi, it’s Tego Venturi with The Venturi Team and Keller Williams Realty with the quarter one 2016 market update. I used to do this monthly, I think it’s better to look at a from a quarterly standpoint, it really is where we can see the trends and what’s going on in the market. I’m starting off on this chart, this chart is the annual appreciation in Albuquerque since 1978 so it goes all the way back to 78 as you can see and I brought this up because this gives us the last quarter and these numbers are quarterly, no yearly excuse me, the market appreciation or depreciation in the greater Albuquerque area and when I say Albuquerque I’m always talking to Greater Albuquerque that does include all the surrounding communities. For 2015… we were watching this all year, was frustratingly slow in market appreciation, we ended up somewhere around one-and-a-half percent market appreciation for Albuquerque. II just wanted to follow up on that because these numbers just came out here about a month ago for the finals for 15.
Now what I am going to show you here is what’s going on in the first quarter of 2016 so let’s jump to that right now. Right now the first chart I want to show you is a supply and demand chart and that’s something we’ve been watching closely and are Albuquerque Market because we continue to have increase in demand, and a decrease in Supply as you can see here. The number of for sale homes is down 9%, the number of under contract homes in the first quarter is up 23%, homes that received a purchase agreement and went under contract in the first quarter of 16 vs 15, that’s a big jump up. Of course all those don’t translate into actual closing, some of those are going to fall out of escrow which is, which is not unusual, obviously we hate it when it happens but it does happen. Then we can see we are up 10% in the number of homes sold this year so far versus last year for the same period. So we are seeing the trend, again, to continue, the number of homes being sold continues to increase and the number of homes available for sale continues to decrease.
The other chart I want to talk to about in Albuquerque is affordability, I’m going to go to prices here in a second but let’s talk about affordability first. Affordability is basically a rating or a mathematical formula that tells you how affordability is in housing compared to other parts of the market. In Albuquerque… this is a chart and Analysis done by the National Association of Realtors, one of the great pieces of data they give us and for the end of 2015 Albuquerque was at 10%, is kind of what they’re saying is that 10% of your income, which is very low traditionally the u.s. it is 15%, historical in a New Mexico is 14%, u.s. is 19%, so we’re still trending below the national average as well as traditional and historical average for Albuquerque. With affordability… you know low interest rates obviously have a huge piece to do with that.
Let’s talk to the interest rate question. Interest rates 30 year fixed interest rate this is the first quarter interest rates again jumping back to 2015 starting at the end of the last year. Actually rates have come down in the first quarter of 2016. Now the projections are that they’re probably going to go up and so we’re watching it closely to see what’s going to happen. It’s strange because the FED raised the prime rate at the end of last year and rates actually went down. But, it has to do with oil, overall economy, it’s all of that big macroeconomic stuff that affect interest rates. This is a chart that just kind of showing your interest rate projections going through the year and into the beginning of next year and right now we’re at this kind of 3.9 and they’re projecting it will probably be up maybe a quarter, three quarters, 3 tenths, or 4 tenths of a point by the end of the year. But who knows what’s going to happen, we’ve been projecting raising interest rates for a long time and we still haven’t seen it. Needless to say it’s just that the point is it’s a good time from a market good time to buy because it’s really helping affordability. Talking about mortgages and interest rates, I did want to address one thing… there was a recent survey done by a bankrate, you can see it on the slide here. They asked people what size of down payment do you need? 45% of the people either said 20% or they didn’t know, which is surprising to me. I just wanted to put out there there’s two and a half percent down, 3 and a half percent down, 5% down loan programs, and in New Mexico we have this great thing called a Mortgage Finance Authority that has a $500 out-of-pocket program for first-time home buyers and another program it’s it’s similar to a hero program which is also a $500 out of pocket. If you want to learn about the different programs, talk to a good local lender, obviously we can always refer you to one. I want to emphasize talk with a local lender it it always really helps.
Let’s jump the prices, first quarter… The Average Price and the median price, what we’re looking at here is we’ve got 1st quarter 2015 versus 1st quarter 2016. Average price up 5%. 5 and a half percent, median price up 4%. Now I want to emphasize, that does not mean prices are appreciated 5% or 4%, that means that the average price and the median price went up that much. Actual appreciation is different than that and we don’t know 100%. I want to show you one other charge that makes me somewhat optimistic regarding the price appreciation. That is the average price per square foot. The average price in the first quarter of 2015 was $103, the average price in the first quarter of 2016 was $108. This kind of evens out the playing field a little bit so you don’t have the variations quite as much. We’ve got about a 5% increase as average price from 15 to 16. It’s going to take a while… we’re going to have to wait for the home price index numbers to come out to see if we’re actually tracking at 5% appreciation, but at this point it kind of looks like that.
A couple takeaways here… interest rates are still low, affordability is still good, there’s still a decent number of homes for sale, however that continues to decline every month, especially in some of the lower price points it’s getting much more competitive. The place where there’s really good value is in the higher end and if you get up in that five, six, seven, eight hundred, million dollar price range, there are some incredible values out there. I appreciate you listening all the way to the end and of course if you ever want some help you can reach us at www.welcomehomeabq.com on our website or call us at 933-6881. Oh yeah… and don’t miss us on radio. It make sure you listen to our radio show every week, I go through this stuff every week… we’re on 95.9 FM and ABQ.FM on the internet. We’re on at nine o’clock Saturday morning, thanks for watching bye bye.
Foreclosed home sales continue to make up a portion of all homes sold in the albuquerque area, currently about 10-12% of homes sold were bank owned. If you decide that foreclosed homes is something you want to consider in your home search here are some things to consider. You can visit our Albuquerque area Foreclosures page to search these homes for sale.
Albuquerque Real EstateTalk Radio – July 11, 2015
Eddy Aragon: AM 1600 KIVA 95.9 FM – The Real Estate Hour. We’re getting kicked off with Tego and Tracy Venturi, my two favorite people on real estate. And if you meet them, they’d be yours too. Good morning, Tego. Good morning, Tracy.
Tracy Venturi: Hey great to be here. Thanks for having us today, Eddie.
Eddy: As always love the update. Hope you had a pleasant holiday celebrating America’s Independence and two hundred and wow thirty nine years. Can you believe it?
Tego Venturi: I know. Tracy and I kind of we’re kids in the 70s and remember that bicentennial thing that was such a huge deal in ’76. I was in elementary school and that was that long ago – 39 years.
Tracy: That seems like yesterday.
Tego: Yeah, I know.
Tracy: You’re doing the whole constitution thing. That was commendable.
Eddy: Well, I think it’s important that we talk about one of the most patriotic things that we can do or the best things about our system is that people can buy real estate. You can own your own home.
Tego: That’s right.
Eddy: There’s nothing more American than that. Think about that.
Tego: Exactly and we can shoot our fireworks, “Come on,” and all my fingers are still here.
Tracy: That huge bottle rocket, I don’t know what those are called that came into our backyard.
Tego: I know we had our neighbour shooting stuff over our house. Luckily it was wide enough that I wasn’t too concerned about it.
Eddy: To put it in context, I think this is important, you guys live close to work and the place where you guys reside right there along the Rio Grande has a lot of action but that’s kind of a growing area. It’s really fantastic in your new office, I guess, coming up here in just a couple of months?
Tego: Obviously we do residential real estate. Walt’s a commercial guy but we’re generally in that cut wood corners area, 550 or 528, Alameda, Coors, that whole area. I mean, it is going crazy, they just raised a building over there so to build another strip mall because there’s not enough strip malls in there. It’s amazing.
Eddy: The traffic and the growth in the area and the place it’s really essential in Central and it’s nice to see. Also, there was a slight up taking interest rates over these holiday weekend so we’re starting to see exactly what both of you forecasted which is an increase in interest rates so now is the time to release it. We’ve been waiting for it and we’ve been talking about it for two years but literally, it’s coming up right now.
Tego: You know what’s interesting Eddy and Tracy, I was talking with the lender yesterday about the things going on and there’s a lot of programs. They keep rolling out more and more programs.
Back in 2010 it was tough, there was limited programs available for people. But now there’s more and more, there’s more options for self-employed people. If you thought you are locked out of the real estate ownership deal just because the lending standards have been so tight, you may want to look at it again.
Tracy: Absolutely, and that was like the perfect intro because one of the things we’re going to cover today is the whole rent versus buy story. We do see that interest rates have ticked up a little bit but that doesn’t mean that you can’t afford to buy a home.
Tego: Steal a bargain. Hey, by the way this is Tego Venturi and Tracy Venturi with the Venturi team of Keller Williams Realty.
If you want to get a hold of us talk about real estate, if you’re interested and get a market analysis or anything going on, if you’re looking to buy a home obviously that’s what we do – you can reach us at 933-6881 or online at welcomehomeabq.com
Tracy: So Tego, let’s tap into your vast knowledge on market data. I know you just did a half yearly update on our website for what the real estate market has done the first half of the year. What are some of the takeaways?
Tego: I did. I did a video blog that we’re going to be sending out. It’s not ready yet.
Tracy: Not online yet.
Tego: You saw me record it but it’s not produced yet. Not that it’s some big high production but I thought it would be good, we’re halfway through the year. This has been the busiest year we’ve had since 2007 so far this year. So, the market is moving in the right direction.
Tracy: When you say, “the busiest year,” what does that mean? What are you talking about?
Tego: Let me give you some of the numbers.
Tracy: Is that a house that sold? Or house prices?
Tego: Unfortunately not necessarily prices. If we look at houses sold this year, we’ve sold – when I say, “we” what I’m talking about the metro – the greater Albuquerque area.
There’s been 5,300 homes sold in the first half of this year. By comparison last year was 4,700, a year before that 4,800; 2012 – 4,100; 2011 – 3,700. If you go back to 2009 that was 3500 that was really the slowest time we substantially had versus the last 10 years.
Tracy: So 3,700 in 2010 versus 5,300 year-to-date this year?
Tego: Exactly. The other thing that’s happened the first half of this year is the supply has declined below that six months inventor. And that’s the number we always look at – month supply of inventory, number of homes available versus the number of buyers and how many month supply that we have if no other homes come on the market.
We dipped below at the beginning of this year, that six-month number. And the average for this first half of the year we’re right around five and a half months, we’re actually lower than that right now here in July.
Tracy: Great. So one of the things that kind of correlates to that is, “Where do we have really what we would see as a shortage of homes and not statistically, so to speak?”
We have several people that specialize on our team working with home buyers and they’re out every day showing houses so they really have the pulse to the market.
And when we sit down weekly and just kind of talk about the market with the team, what we’re noticing is there are certain neighbourhoods, there’s certain price plans, certain types of houses where they just can’t find them or when they come on the market they’re selling quickly.
Tego: Tracy, you deal with that more than I do. So what do you see as the hot areas and the hot type of home right now on Albuquerque?
Tracy: Sure. If you’re thinking of selling and you are in the North East anywhere near North East or whatever, you have a house that’s in nice condition around the 175,000 or below, we need that house on the market right now if you’re thinking of it.
If you’re in the far North East, you have a single-storey maybe $300,000 to $500,000 house, that’s also in-demand. We’re seeing a big shortage of that.
Tego: You said single-storey and that brings us back to this discussion we’ve been having over the last months here about the change in demographics and there does seem to be a demand for more single-storey less two-storey. Would you say that’s fair?
Tracy: It’s true and the less steps are better. I have some folks coming in to town next week that are going to be working with Anna Marie. They want not a step, they don’t want it at the front door, they don’t want to step down into a living room – nothing. And we’re seeing a lot more of that.
Tego: Tracy, let me go back to the June numbers. We kind of talked about what’s going on. And the short of it is for the first half of the year, the market is trending up. Prices have increased slightly but we’re talking about average price.
An average price could reflect the fact that more homes at a higher price point are selling than the lower priced homes and of course we know that Tracy, right?
Tracy: We do and so when you say that, what you’re really saying is the same house last year versus the same house this year could still be the exact same price or market value.
Tego: I mean there’s so many different ways to look at those numbers. I think if you go back to last year, we were tracked in somewhere around two and a half or three percent appreciation. I would say we’re probably about there right now.
Certain areas, certain homes, certain parts of town is probably better than that – certain price points the higher end. I don’t think there’s a whole lot of appreciation right now in those real expensive homes because we do still have quite a bit of supply.
We’re at the event the other day, Tracy, talking with the New Mexico Select Group which is a group of realtors that generally does higher end homes. And some of the properties that are being presented is there’s some bargains out there in that higher end.
Tracy: There really are and Gary Tonjes was there at our meeting this month.
Tego: With Albuquerque Economic Development.
Tracy: Right just this week. It was interesting because you asked him a question and it was kind of surprising.
He said when they’re talking to out-of-state companies and trying to recruit them to come to New Mexico or specifically Albuquerque in his case, they don’t tend to look at the availability of housing or the cost of housing as one of the main factors when they’re thinking about why to relocate to our area.
Tego: I found that surprising because Gary Tonjes and that whole group at AED, they do amazing work.
Eddy and I were talking about this before we came on is they worked so hard to bring businesses here. And I find it surprising that housing isn’t one of the check marks because we talk about all the check marks and like right to work. We don’t want to get into that one Eddy, do we?
Eddy: No, we don’t want to politicize anything.
Tego: We don’t want to go into the whole “right to work” thing but that group has done a great job.
Actually there’s been some great progress in the whole making New Mexico way more competitive to businesses coming here. But I found that it was interesting because in Albuquerque our housing is reasonably priced and we still have good supply unlike other markets.
Tracy: Right. He was talking about one company that we lost out to the Dallas area. Now, they’re there and their people they’re recruiting that need to move into the area because they’re relocating their world headquarters there. They cannot find houses for all the people they’re trying to relocate because of this shortage of homes.
Tego: That highlights a really good point as we get these national stories a lot of time on housing that come from the AP or whatever. They talk about the big picture, boy, real estate is so local.
And just between Dallas, in Denver, in Albuquerque – if you do the comparison, they’re totally different worlds. Both of those markets, Dallas and Denver even Phoenix in some areas – they have a shortage of homes to sell.
Tracy: Our time flies so after the break we can get back to the rental topic that we’re going to talk about, “Should I be buying or renting?” And what it costs to buy versus rent.
Also a little bit more on the market stats and then we’re going to talk a little bit about rain, I assume, because that’s on my agenda this week.
Tego: There’s a whole lot of that going on this week and it’s been great. I looked at the numbers for elephant view, it’s filling up.
Tracy: If you’d like to talk real estate with us, call our realtor on duty line 933-6881. We’d love to talk to you if you’re thinking of selling or buying.
Eddy: Elephant view – those numbers were over the top, weren’t they? It wasn’t like double, it was nearly triple when it was two years ago. You think about that.
Tracy: And they had record people there too.
Tego: We live near the Rio Grande like we talked about earlier and driving across the Alameda Bridge and you look down there go, “Holy cow that’s a lot of water flowing down that river.”
Eddy: The state overall was a huge growth in Tourism, “Hey you need to start locating some of those people from Dallas [0:12:11].
Tego: I know, I know.
Eddy: Waiting for some of those dog and pony shows.
AM 1600 KIVA 95.9 FM and 107.5 FM and worldwide in ABQ.FM back in a moment.
AM 1600 KIVA 95.9 FM Fox News ABQ – Tego and Tracy continue with the Real Estate Hour.
Tego: Eddy, we start to talk about this and now we’re going to go back to it as the June numbers. We just ended the month and it was another strong months. Lots of homes went pending, average prices are still around that $200,000 range and we’re just continuing seeing good activities.
There are some frustrations in the market though right, Tracy? Certain areas maybe Westside Rio Rancho although those markets are up. There still more supply than other parts of town, right?
Tracy: Right. Homes there aren’t selling as quickly as another parts of the city for sure. Of course it all depends on the presentation, the price, the location – all these stuff we talk about all the time.
Tego: Exactly of course. We want to talk about renting versus owning, Tracy. We’re getting a lot of calls for homes that we have listed for sale. People say, “Hey are they willing to rent it?” Because there seems to be a demand for rentals and there’s not a good place to go to find homes for rent, right?
Tracy: It is hard in our market. Some cities like Phoenix, they have a database where all the rentals go on and they compensate realtors to go show rental houses. Here we don’t have a single database where our renter can just get on and find every rental available and then find someone who will actually show it.
Here it’s a lot more difficult to actually see a rental so it’s tougher. But we’re in the businesses selling houses and so we’re going low. And if you’re having trouble finding a house to rent, why don’t you think about buying, right?
Tego: And we of course always talk about that and right now there’s always different rent versus buy calculators online.
Tracy: Totally. Just getting ready for our show today I got online and I’ve got a couple my own from some title companies and I did, “What’s this scenario if I want to rent and I’m willing to pay 1200 a month or 1300 a month? What is that equate to in a house?”
Tego: What does that equate to in a house? Let’s say rental raise or somewhere for a nice average – three bedroom, two-bed house just kind of standard home there in that 11, 12, $1300 a month rent right now.
Tracy: Unless you’re in the far North East in which case there even more.
I just look at what’s a nice house in Albuquerque like let’s say 200,000. Can I find one for 160? Yeah probably in the North East, have to search through them a little bit. Let’s say you want to get a $160,000 house – that would equate to a down payment requirement of $5600.
Tego: We’re talking about 160 right?
Tracy: Hundred and sixty thousand dollar purchase price.
Tego: And down payment is three and a half percent.
Tracy: Three and a half percent which is $5600 and that would equate to with insurance and taxes on the house so not just the house payment itself, about a thousand dollars thousand fifty a month.
Tego: Okay. And then if you figure in the tax savings on that because you can write off that interest, right? You get a little bit of bonus there.
Tracy: Right. When you do your taxes every year so you’re going to have some interest deductions for owning a house.
Tego: So why would somebody want a rent versus owned?
Tracy: Well they may have low credit or maybe they’re not planning to live in our market or in that area for more than a year or something.
Tego: And to me that seems like that’s the big one, it’s a short-term commitment. When you purchase a house it’s a little bit more long-term commitment, right?
Tracy: It is because there’s closing cost involved in selling a house. If you’re not going to be in it for very long, it doesn’t make sense to buy.
But it certainly makes sense if you’re going to be in the Albuquerque area for a couple of years or more that now is the time to buy to lock in your monthly housing expense for the next 30 years.
Tego: Thirty years.
Tracy: Let’s talk about the $200,000 house, I mean you can get a really nice house.
Tego: You can.
Tracy: Almost any part of the city whether it’s Rio Rancho Westside, North East South East Four Hills, Mesa del Sol, you can get new or resell homes. So for $200,000 house with an FHA loan which would be three and a half percent down payment that’s $7,000 down. And the monthly payment with interest I mean insurance and taxes roughly is 1300 a month.
So that’s a really nice house – you own it, you get to decorate it how you want, you get to make your kids rooms the way they want them, you can remodel, you can change walls if you want, you can do things in the backyard that are more permanent that are yours.
Tego: So I want to go through some of the advantages and disadvantages of home ownership and let’s be honest there are some disadvantages okay.
One of the things you hit on advantages-wise is it’s yours. You own it, you get to do what you want to do. You don’t have to ask a landlord if you want to paint the rooms or do some thing or get a pet or whatever.
The other thing is some privacy, it’s yours. You do have some gain privacy. And in home ownership usually is a good investment. Obviously that we had above all and that that create us some problems back 10 years ago almost now, “Wow it is almost 10 years ago.”
But then you also stabilize your housing cost so just because you bought at a peak time in the market eventually even if the pricing goes down eventually it’s going to come back and then you get the tax exempt if you can write off the interest in most cases to find your home.
Tracy: In which helps you pay a lot less in your taxes every year to the federal government.
Tego: Exactly. And you know what one of my favorite one is about home ownership is it’s forced savings in the sense that instead of spending that money and you’re paying your landlord and paying your landlord’s mortgage, you’re paying your own mortgage and you’re building equity overtime so it’s a forced savings.
Tracy: Right, which many people wouldn’t do otherwise.
Tego: Some of the disadvantages Tracy is it is a long-term commitment. I think if you’re going to only be here a year so it probably doesn’t make sense to buy.
You got to realize that you’re going to be now responsible for the maintenance and repair and that’s just part of ownership – the pride of ownership. And we’re going to talk about that with roofs, aren’t we?
Tracy: We are. We’re hoping to get to that here before we run out of time.
Tego: There’s a upfront cost; you need a down payment. But with the programs we have in the state, there are some down payment assistance programs as well as the FHA program that’s only three and a half percent.
Tracy: That’s right and you can’t get a loan for your down payment. If your parents or your siblings or somebody wants to give you the loan for that – you can’t but you can get a gift for that down payment so it’s very doable. We’re not talking about 20% down, we’re not talking about 32,000 or whatever but like in 7,000 on a $200,000 house.
Tego: I want to reiterate one thing, there are some great down payment assistance programs here in New Mexico. The New Mexico Mortgage Finance Authority has some great programs and they’ve got hero programs for teachers, fire fighters, policemen, that kind of thing. There’s military; there’s FHA; there’s the VA. VA loans are the best loans out there right now, zero down.
Tracy: And there’s [0:20:04] program as well. Just call our hotline for questions. We know the resources, we can get you connected to the right people to help you find out what program would work best for you. The number is 933-6881.
Tego: So Tracy let’s segue way into this whole maintenance thing. We’re just talking about that one of the disadvantages of home ownership is home maintenance. I think some people like myself kind of like doing maintenance.
Tracy: That’s what I was just going to say. Let’s talk real here so you like those projects around the house.
You like to have a room that needs to be painted or whatever. You like to be able to build a deck on the house which you’ve done so a lot of people do. And we get to choose to have three dogs if we want them because we own the house.
But one of the things that comes up and I kind of think of it as a good thing is every year for those people that have flat roofs and tar gravel and just most roofs.
Tego: Well any roof, you can pitch the roof.
Tracy: Everything resealed around [0:21:04], around roof penetrations, wherever there’s a vent pipe coming out of your roof – every year or two you should get up on the roof with that black tar or whatever and seal everything.
Or hire somebody, it’s like 80 bucks to have somebody to go do it for you. But I kind of like it because you always put on really old jeans that you shouldn’t have around in the closet anymore, right?
Tego: Yeah and I climb up there.
Tracy: And you climb up there.
Tego: Oh I thought you were talking about you like this in Tego up on the roof.
Tracy: Tego goes up on the roof but it’s a good reason to get some clothes out of the closet that are going to get black tar all over them and then you get to throw them away.
Tego: Obviously with all the ring we’ve had, people are discovering roof leaks that they didn’t know they had. And that just happens of course because we get these real long dry spells and certain things dry out and then when we get these heavy rains obviously it all happens at once.
Tracy: The other thing you’re noticing is all the roofers are really busy and they don’t have time to come out and handle your roof so it’s one of those things to be proactive about.
Tego: Absolutely. And that’s one of the things I’ve talked about every year is getting up on your roof if you’re comfortable doing them. I know some people are not comfortable getting up on their roof well I get that.
Just take a look at it, go around, make sure it looks good or get a roofer to come out and look at it. Because of course if you wait until it’s raining like it is now, you’re not going to be able to get a roofer out there. It’s just one of those preventative maintenance things you should be doing.
And of course in New Mexico with our semi flat or flat roofs and the tar gravel roofs, they can be a little more susceptible to it. Although it’s our gravel, as long as they’re maintained they were great obviously.
Eddy: Get a place to be a roofer.
Tego: Well at least right now.
Eddy: And April.
Tego: We can’t get them out at the moment. We got a few go-to people that do us favours but it’s a little bit tough right now to get a roofer out.
Eddy: Don’t forget always get a roof inspection before you even decide you’re going to go. That’s part of the inspection, is it not Tracy?
Tracy: It is. When you’re buying a home, the full-home inspector does look at the roof and if they’ve see things they might say, “Hey let’s get a licensed roofer to inspect it further.”
Tego: Again going back to the whole home ownership, part of home ownership is preventative maintenance. And to certain extent it give you that pride of ownership, you’re taking care of something – it makes you feel good. Eddy you know, right?
Eddie: The best way to love something is spend time with them. Not pay somebody else to do it but learn about it.
Tego: For sure. Well thanks again for having us, Eddy.
Eddie: As always.
Tego: This has been Albaquerque Real Estate talk, if you want to catch us we are at 933-6881. That’s the Venturi Team Realtors with Keller Williams Realty.
Eddy: Back again with these guys again next week. Thank you both and we’ll see you next week here on the Real Estate Hour here on AM 1600 KIVA 95.9 FM and 107.5 FM.
The Albuquerque Real Estate Talk Radio show for June 20, 2015. All about “The Carlisle”, a luxury condo project coming to Nob Hill and the changing housing demographics.
Albuquerque Real Estate Talk Radio – June 6, 2015
Eddy:Am 1600, KIVA; 95.9 FM. Brand new fox news ABQ here on 95.9 and 1600 and firstname.lastname@example.org and yeah, not just anybody, it’s Tego and Tracy. And this is the weekend Albuquerque Real Estate.
And Tego and Tracy have done plenty of stuff for me, in now both personally and professionally and they’re just great people and they’re doing a lot of things here in this community. I can’t thank them enough and you hear there at all the time and let’s give a warm welcome to Tego and Tracy. Good morning guys!
Tego:Wow! What an introduction there Eddy.
Eddy:Well, you guys are great! We appreciate that.
Tego:Well, we appreciate this platform and you know, real estate affects everybody so much, everything. I mean most people even if they are a renter, real estate is so important. Obviously, one of the basic needs of mankind is shelter and so… I know we’re getting pretty deep here.
Tego:Okay, I am! This Tego Venturi with the Venturi Team and Keller Williams Realty. We’re here every week with myself and Tracy Venturi whose been chiming in here. And, how is it going Tracy?
Tego:It has been busy right?
Tracy:It has been. It’s been a great week for real estate and meeting lots of new people which is always fun…
Tracy:And we love to come together to see Eddy and doer radio show. So we really appreciate the opportunity.
Eddy:I want to ask you one quick question before we get started. Last week one of the things that stood out in my mind was the fact that there had been and if you can restate that fact again because this a hot real estate market. Let’s say that, right?
It’s currently a hot real estate market; hotter than it’s been. It can always get better, right?
Tracy:Hotter than 7 years.
Tracy:In 7 years.
Eddy:Hottest in 7 years.
Tracy:We don’t need that big long description of…
Tego:Okay, come on!
Eddy:Because it totally stood out to me and I said, “There’s more houses that sold this Spring.”
Eddy: Tego as you said than have sold in…
Tego:Since 2007 basically.
Tego:The last time we’ve seen this many units or homes selling. I hate units, it sound so impersonal but that’s what it is. It’s a number of homes sold.
We just finished May. Now, we have the May statistics and we were up 10% in number of home of homes sold, this year May versus last year May.
Tego:Actually I take that back goes 11; it was actually 10% year today versus last year. And so, there’s less homes in the market. There are more buyers in the market. Obviously, there are more homes selling a good 10% bumps.
You know, there’s some increase. There’re some frustrations are too, right Tracy?
Tracy:There are! There are some neighbourhoods and some price points where we’re not seeing quite the activity. So with our hearing the news that things are really good and the market is hot and more homes are selling, however they’re not getting the numbers of showings and things and they’re not getting offers on their house. So it can be frustrating when they see the news.
Tego:Yeah. And speaking of the news; there was a journal article here this week. The headline was this was Richard Medcalf from The Journal, who is a real estate reporter over there and he does a good. He had an article here a couple of weeks ago, week so or ago and I think he does fair reporting because it’s local as oppose to sometimes they’ll pull in those national stories that don’t really to us regarding real estate.
But this one, he had some statistics from a company called Core Logic which is kind of a national real estate trend tracking. They’re saying that 3 1/2% gain in home prices which I just haven’t seen this. I don’t know how they’re coming up with that number versus last April, as the way you read it.
I mean, what I’ve seen in some other statistics or some others stores like FHA or what is it Tracy? The FHFA, who tracks. And they’re saying about 3% but I think if we say 3% gain year over year is kind of what we’re in right now, as it what it looks like.
Tracy:Yeah. Three percent is what’s healthy. If you look back 50 years in our market, 3% a year is sort of where we’ve been at.
Tracy:And it’s a nice healthy steady gain.
Tego:And of course we don’t see that month to month, because it’s a very slow appreciation. And one thing we have seen Tracy is homes are getting listed for sale. The increase in that list prices have gone up dramatically, not necessarily the sale prices.
Tracy:Right. And I think some of that is when you see headlines and you don’t read the fine print sort of. The headlines are the market’s great and people translate that into prices but maybe its home selling versus prices.
Tego:Yeah. I wanted to teach something because we’re going talk about Home Owners Association. I think there some confusions are Home Owners Association’s what they do versus Covenants, Conditions and Restrictions or what we call CC&Rs. And we’ll talk about that a little later.
Back to market data, one thing, one real bright spot is the bank properties also known as foreclosures, also known as real estate owned or REO property. Basically they’re homes that were foreclose in one way or another, came back on the market by the bank. This month or the May stat that 12% was the number of those properties on the market versus we seen as high. You know, we’re up at 30%, but this by far the lowest we seen in many, many, many years.
Tracy:Yeah. It’s great.
Tego:That’s a good sign because that also helps in stabilizing prices.
Tracy:It does and you know what we found when there were a lot of distressed homes on the market, the regular sellers had to compete.
Tego:Yeah. And there’re lots and lots and in just certain extent it’s very regionalize in certain parts of town.
Tracy:Yup. So one other thing we want to talk about besides home owners Associations, Covenants, Conditions and Restrictions or CC&Rs is appraisals. And just to cover it a little bit about what we’re seeing in the appraisal world.
Tego:So let’s go right into that one. I know we didn’t even list off our topics here. We’re just jumping right into them.
Eddy:That’s okay. We’re just following right along.
Tego:Oh, yeah sure.
Eddy:No, really. I wanted to say one thing before we start on the appraisal portion. By the way, this is Tego and Tracy Venturi, the Venturi Team. It’s Keller Williams Realty here in each every week, starting the real estate hour.
There’s a story in the Portland and they’re actually giving away pizzas now in order to try… it was kind of side story, right? And the side story was that there’s only X amount of months of inventory left because of the huge traction they’re getting.
Eddy:Four and a half months they said of all the inventory they have left in Portland, Oregon. And I thought, Portland always been a city that’s compared to Albuquerque in so many ways and I just thought that that I haven’t heard a story like that literally in years. And I’m just glad to hear some worthy country where there’s only that much inventory left in the market.
Tego:Texas manages. It’s booming in Texas. Even Denver is right up in the streets from us. They’re booming. And they just don’t have enough homes to sell. There are more buyers than homes available.
Tracy:And in Miami, those million dollar houses are flying off the shelves. Those 3 to 5 million aren’t but there’s still selling at it. Okay pace but they’re saying if it’s a million, two and under, they’re getting multiple offers.
Eddy:Wow! Looks exciting.
Tego:Yeah. And it’s interesting because I’ve looked at some of the stats, We look at like when we peaked out in Albuquerque, our market peaked out in May of 2007. That’s when we hit the highest prices we’d ever seen.
However the entire country peaked out in May of 2006. So, if you look at it that way, we’re basically a year behind the rest of the country in many ways. And we see that in a lot of things, right Eddy? I mean, not just real estate.
Tego:We see that many other things.
Tego:And nothing’s wrong with that. We’re the land of the Miñata. We’re okay with that, right?
Eddy:Yeah, we’re okay. We make it work here.
Eddy:And we can anticipate the things that are coming here too.
Tracy:We pay attention.
Tego:You know, last year a lot of the country had a lot of… you know, it’s booming like crazy. This year, we seemed to be seeing some of that as well.
Tracy, let’s talk about appraisals. This comes up all the time. Obviously, any each time a piece of property changes ownership, in most case is you’re going to have an appraisal. If there’s a loan on it, you absolutely are going to have an appraisal. If it’s a cash sale, you won’t necessarily have to have an appraisal. But, what is an appraisal? Why do we get it done?
Tracy:An appraisal is for the lender typically. So that somebody’s got the eyes and ears for the lender to say, “Yup, that’s a good loan to make.” Because the lender’s not going to go out and inspect the property themselves.
They might be underwritten in California, even if you’re doing it locally. They’ve got the appraisal process there that’s a third-party independent that goes in and says, “Yup. This house is worth what you’re buying it for.” Well, which brings up another subject.
A lot of people think it’s a shot in the dark that the lender doesn’t know how much the house is being sold for. Well, of course they know. They’re given the contract and all of their doing is saying, “Okay. This house is schedule to close for this amount. Let me look and see if that’s justified and I’ll tell the lender.
Tego:In general, they use the comparable method, correct? So they go back three months, similar homes in that neighbourhood, that area and then they make adjustments up and down based on square footage, amenities and stuff like that.
Tracy:Exactly. And the rebuild cost isn’t usually the method. We know that typically and it probably be more?
Tego:You mean what you paid for isn’t how they come up with that?
Tego:Yeah. And that’s first trade-in thing for home owners; like what you paid for it, unfortunately doesn’t matter. It wouldn’t matters for as what somebody’s willing to pay for it as well as what the appraisal can show that other people have paid for similar type properties, right?
Tracy:Yeah. What’s reasonable and what the lender would feel construable making a loan on.
Tracy:it’s good but the one thing that I wanted to bring up in addition is we have been having some appraisal problems for our home sellers.
Tego:And I put this way. You know, the appraisal generally is looking backwards. And, nothing against appraisals understands. They have a very difficult job to do.
They have very strict guidelines on what they can do. Obviously, with everything imploding in 2008. The appraisal guidelines got very strict and there’s a lot of over sight in that world. And that makes sense, right?
You know, large sums of money being loan. However, they have to look backwards and they only have to look at what things have sold. They can’t necessarily look out. Well, there’re five other homes on the market that are higher than this price but they can’t use it. They can’t use that to justify the price.
Tracy:They can’t! But I have seen sometimes where they’re putting active listings in an appraisal in situations where they aren’t enough houses within a one mile radius or whatever their criteria is. I know they can expand their criteria. They have to.
Tego:So Tracy when we come back we are going to talk about the Home Owners Associations. I know there’s kind of some pluses and minuses to Home Owners Association. We got a home on the week right?
Tego:You want to tease that right now?
Tracy:Oh, we got a great house in Ocotillo. We’re going talk about.
Tego:Ocotillo! And Ocotillo is up off Paseo Del Norte in North Albuquerque acres area.
Tego:Tune-in in here. We’re going to take a break. This is Albuquerque Real Estate Talk. We’ll be right back.
Eddy:Am 1600, KIVA; 95.9 FM. This is Albuquerque Real Estate Talk with Tego and Tracy Venturi, the Venturi Team from Keller Williams Realty.
Tego:Eddy, thank you. This is Tego Venturi with the Venturi Team. And we got right to so many topics; we didn’t talk about how to get hold of us. So if do want to get hold of us, Talk Real Estate, our realtor on duty line is in Albuquerque 505-933-6881. We also have that as a toll free number at 855-933-6881. And our website Tracy is…
Tracy:Our website which is really useful. It has great search tools is welcomehomeabq.com but what we know is most people just Google our names and they find our website.
Tego:Yes, we do. Eddy, you know all about Google Analytics and we’re tracking in all that fun stuff. Yup, yup, yup!
Eddy:Yeah. It’s not just the future. The future has arrived, it’s here.
Tego:It is here, for sure. So, yeah. We really spend a lot of time in the website to make a very useful resource for folks looking for homes, looking for market values, looking for what is the home down the street, the listed for sale for.
Tego:Tracy, we we’re talking about appraisals and valuations and valuation problems. Tell me which you meant by that.
Tracy:Sure. We are seeing some of the houses we were get an accepted offer with the buyers willing to pay and the appraisal is coming in lower than what the agreed upon sales prices.
Tego:Why does that happen?
Tracy:Well, for the reasons you said earlier, where they’re looking at past data and if the home prices are kind of edging up towards a little bit. They’re looking at past sales and that’s what they have to look at to justify the price. So it’s really hard for prices to go up quickly because the past sales are what the appraisers are looking at.
Tego:Right. And so what happens when you’re a seller or your buyer, put them on both sides in the appraisals comes in low. What happens?
Tracy:Yeah. There’re four or five things that can happen as possible outcomes so to speak. So the seller can agree to sell at the appraised price. The buyer can agree to bring money in to pay for the difference to buy at the purchase price that was previously agreed upon. Buyer and seller can meet somewhere in the middle. The deal can fall apart and people can go their own ways.
Tego:And one of the things in our contract that we use here in New Mexico, it does have standard language about that that basically, if the appraisal doesn’t match the contract price there’s basically an out option for the buyer or a new renegotiate option for all the parties involved, correct?
Tracy:Yup. We see it happening variety of ways because as the market is increasing a little bit in prices, buyers are willing to pay that new price and they are willing to pay the different between…
Tego:Right. Because when a buyer is out looking for home, they’re not looking out what stuff sold for, they’re looking out with this are for sale for. And so they are comparing to whatever else’s available for them to purchase, correct?
Tracy:Right. And they’re saying, “Hey, this was the nicest house out there and it’s worth what they’re asking or what we agree upon.” It’s interesting because we had [00:15:13:17] we put on the market in the Northeast, kind of by Trader Joe’s off for sale by the week and a half ago or less and we have three offers that we’re working at this moment on it.
That house we’ve said is hard to find. Four hundred and twenty five thousand, a very nice high-end, executive type home. But, you know right now, we’re going. There’s not a lot of camps…
Tracy:So we have to justify the price.
Tego:Sure. That’s one thing, again, that’s part of what we do as realtors; is we work through all these issues, right?
Tracy:We do. And what we know is that house that can’t find it anywhere else.
Tracy:If there were 20 of them for sale right now, we wouldn’t have three offers.
Tego:Be a different story. So, okay Tracy, let’s segway into this whole Home Owners Association. Questions came up this week. We had a client where they ask, “Hey! Is there a Home Owners Association here?” And we said, “No, there’s no Home Owners Association in this neighbourhood.”
That’s part of the disclosure process when you’re purchasing a home; if it’s a Home Owners Association neighbourhood that must be disclosed. But then, once we got under contract, you know, Tyler Company does the title search, which they normally do and they sent out the CC&Rs. And they’re like, “Well, I thought there’s no Home Owners Association.” It’s like, “Well, there is not. It’s different. CC&Rs are different things.”
The question came up; what is the difference between Covenants, Conditions and Restrictions versus a Home Owners Association?
Tracy:That’s a great question. Almost every house we sell has some sort of Covenants, Conditions and Restrictions. Just by nature of what the city code is.
Tego:Right. And so anytime a subdivision is put together in most cases the developer is going to record these CC&Rs as we call them Covenants, Conditions and Restrictions on that neighbourhood, correct?
Tracy:Right. And some of it is city codes. So it says, “Walls can’t be more than 6ft on the sidewalls or the back walls. Or the height of the two-storey can’t be more than 26ft.” And I don’t know if that’s what it’s still.
Tracy:But what it used to be that.
Tego:Yes. So you’re going to have the city zoning, right?
Tego:That’s going to dictate a lot of stuff and then you’re going to have the CC&Rs, way more specific to a neighbourhood.
Tego:And it can be stuff about chickens in your backyard, right?
Tego:And some other stuff.
Tracy:But, that’s a great example though. Chickens in your backyard versus having that Home Owners Association actually enforce it.
Tracy:Who’s going to enforce it if you have chickens and it’s in the Covenants, Conditions and Restrictions?
Tracy:You can complain to the city or the village or the township or county or wherever you are located.
Tego:What’s a Home Owners Association then? What’s their role?
Tracy:The Home Owners Association is an association to basically enforce the covenants and restrictions of the neighbourhood.
Tego:And then they offer additional amenities such as… let’s say you have a community swimming pool or you have a tennis court or you have some sort of facilities or you share in all the landscaping, the cost of all the landscaping in the neighbourhood or if you have a gate at your neighbourhood. Who is going to manage that? Who’s going to collect the fees to pay all for all those services?
Tracy:Exactly. So they’re the ones that are the body that’s supposed to be representative of the Home Owners and making sure that your neighbourhood stays nice and people are taking care of things.
Tego:Okay. So this is where we get in to the negatives and the positives about Home Owners Association, okay? Some people and we had these clients Tracy. They come to us and say, “I absolutely do not want to live in a neighbourhood with a Home Owners Association,” correct?
Tracy:That happens a lot.
Tego:And why do you think that is?
Tracy:They don’t want somebody telling them their trashcan has to be off the curve by 6 o’clock on trash day.
Tego:Correct. In most cases and correct me if I’m wrong; it’s because they’ve had a bad experience with a Home Owners or an HOA, right?
Tracy:I would like to correct you and say you’re wrong, but no.
Tego:Yeah. Oh, darn it, man!
Tracy:No. That’s exactly it. They had a bad experience with a Home Owners Association just kind of dictating and they feel like it’s their house, their yard, their land. But when you look at neighbourhoods that have Home Owners Associations, I know Eddy has a neighbourhood that’s maintained and beautiful and people keep it up. And if somebody leaves the car on blocks on the side walk or on the driveway, somebody’s going to ask them to take care of that.
Tego:To certain extent it’s more like I call it a police force but its group that going to mandate if you’re not taking care of your property, they’re going to send you a little love letter that says, “Hey! You need to pull those weeds under your front yard.” And that can be frustrating to people. But you know what? It keeps the neighbourhood looking great.
Tracy:It does, yeah.
Eddy:I actually love it until I’m the subject of the course.
Tego:Of course! Exactly! It’s just like anything, right?
Eddy:Absolutely it is, right?
Tego:Yeah. I want to speed until I get caught speeding.
Eddy:I get caught, right.
Tego:Yeah, yeah. Okay, no I don’t speed. No, I didn’t say that.
Tracy:That’s funny. Well, I want to get to our home of the week.
Tego:Yeah. Anyway, that was enough about Home Owners Association. What is our home of the week Tracy?
Tracy:We have a really great house and I said it’s in the Ocotillo subdivision. Ocotillo is a small in film neighbourhood that is by Trader’s Joes, northeast to Albuquerque by the Paseo…
Tego:And these are larger custom homes for the most part, correct?
Tracy:Very much so.
Tracy:Yes. On smaller lots. So you know, in that North Albuquerque acres.
Tracy:Area. And they’re not necessarily single storey, which is kind of I don’t know why I think executive of single storey…
Tracy:[00:20:58:21] Single storey because we have bad knees and backs from all the abuse we’ve taken on our bodies. So, Eddy wouldn’t know about that though, he’s still so young.
Eddy:Yeah. Oh, you guys are nice.
Tracy:So we have one it’s on Sand Verbena Trail and it’s in that gated Ocotillo neighbourhood that’s in Paseo Boulevard and it’s a single storey with four bedrooms, plus an office and it was built by Panorama Homes.
Eddy:If you’ve ever done parades over the last, parade of homes, over the last 10 years, you’ve probably seen a Panorama Home. They do a great job.
Tracy:They’re beautiful constructions; great to work with. If you’re looking to build a house, we can find that great builder like Panorama Homes.
Anyways, it’s 3500 sq. ft. It’s listed for $690,000, beautiful single storey, really great layout with a really plush master, backyard is very manageable. It had a nice little water feature.
Tego:Well, that’s a really good point because you can get the big lot, you can go North Albuquerque Acres and get that almost an acre but then you got to take care of it, right? In many times, it’s like having that nice larger home, executive home, custom details, but yet not having that huge lot that have to take care off, right?
Tracy:Correct. And this is house is in an HOA.
Tracy:And the HOA in this case pays for… you may pay in and its $40 a month which is really cheap, you go to big cities and a $40 HOA is non-existent. But its $40 and it’s gated. So they care of the gate and all the common areas.
Tego:Again, tell us the address and the price again.
Tracy: Sure. It’s 10004 Sand Verbena Trail…
Tracy:Yeah. So Google it. Go to our website and take a look at it. It’s $690,000. We’d love to show it to you.
Tego:Yeah. If you want to call us on that or anything else real estate related, we are at 505-933-6881 and then our website is welcomehomeabq.com. If you go to the homepage, there is a place that shows all our featured homes which are all the homes that we represent.
You know, we have one cool thing on our website I want to mention. We have “Real Time” Just Listed, right on our homepage. And what that means as new homes come on the market, they are displayed there and it’s maybe at most to 15-minute delay from when somebody enters a new MOS…
Tego:Until it ends up in our website. So if you’re one of those people that like to kind of view the latest and greatest, we got it right there, welcomehomeabq.com.
Eddy:Edge there Tego. We can just hangi in your new website at welcomehomeabq
Tego:Yeah. We sit there all day and watch all the new homes come in to the market.
Eddy:Alright Tego. We’ll see you again next week. Thank you both for being here. And this is been ABQ Real Estate Talk, back again with Tego and Tracy next week. Up next, Ward Arnold.