Albuquerque Real Estate Market: Multi-Generational Housing on the Rise

(Transcript Snippet): “Tego:

Tracy, I’m going to change the subject. And I want to ask you about this trend that we’ve been seen now for quite a few years, and it’s really catching on and the thing that’s interesting talkie, well, wait, hold on, hold on. I’m building it. I’m building or making us wait. It’s the multi-generational housing and, and we’ve seen builders adjusting their, their products to this meaning that has a, you know, there’s a lot of different terms for it in law suite, in New Mexico, it’s the casita or it’s the granny flats, or, you know, whatever, whatever you want to call it. It’s, it’s kind of like the second home within the home and, and the thing that’s interesting. There were some interesting stats here. Tracy, did you see this one? I did not. Yeah, it’s a, well, there we go. So the percentage of total home sold in 2020 that were this kind of multi-generational type type home, where again, it had one of those things the, what did they call it? ADU auxiliary dwelling unit is another term you hear sometimes too. 12% of the home sold. Well, that’s a pretty big, pretty big move in there saying the spring of, of it hit it, it hit even higher. So yeah,

Tracy:

You know what I find interesting looking at this visual that you pulled up that I hadn’t seen before is the most common age range of these buyers for these homes that have, that is 41 to 55. Now that’s young. These are people who are being [inaudible], but and the second age bracket is 75 to 95 years old. So they’re buying it and having a space for them and moving in one of their child, children or something. But it’s interesting. Cause 41 to 55 is pretty young right together. It’s really young and they’re buying these houses with a Caseta or an in-law suite or an extra living area that  is available. So

Tego:

Did you want to hit on the benefits that people are saying from it was that where you were going?

Tracy:

I wanted to just say, you know several years ago Dr. Horton and Pulte started adding that option into their floor plans and they had spectacular, they have spectacular floor plans that have that in, you know, the in-laws suite, isn’t just a bedroom with a bathroom, right. It’s typically on a main floor if the whole house isn’t main one, one level. But it also has some sort of an extra living space. So you’ve got a little living room in addition to a bedroom and then a small little kitchenette in addition to the bathroom, separate entrance sometimes. So we’ve seen that lately in Abrazo homes where they’re building in the new neighborhood in the parade,

Tego:

You know, what can we just sidebar here for a second? Because we, we, we overlooked it. And we were talking about the parade of homes this weekend and that Abrazo homes, which is a local locally owned home builder here. They have a neighborhood right by the balloon park. Just what would it be? Just West, North,

Tego:

South and West of the balloon park, if you can envision that and

Tracy:

Behind the big horizon business building,

Tego:

Right? Yeah. Yeah. But they have, you know, a lot of their models they have there do have the option of the in-laws suite or the,

Tracy:

They call it the casita. And from what we understand, they just started opening up that neighborhood to sales. It’s a gated neighborhood right there. It’s only like 34 home sites. Yeah, it’s right next to the balloon park. So I would suggest you go and check out the Abrazo homes, but they said that most people who have committed to purchasing there have taken that Kasita option and put that into their floor plan.

Tego:

It does make sense. So just to wrap up this conversation about this, this multi-generational housing trend and in some of the benefits that people are seeing is it, it takes the budget and it helps combine it. Right. Right. You know, it also, you know,

Tracy:

And you take two families. I mean, together, they can live in one home, both of their incomes from both families. They can typically afford a bigger home, but then, or a pricier home, but then they can sort of take care of each other and watch things. One can go on vacation and the dogs are taken care of and yeah. Not just health-related, it’s just, you know, the yard, the upkeep.

Tego:

Yeah. Yep. Yeah. And you know, and obviously it’s, you know, quality time together is, is always an important thing. Obviously, if you like your in-laws or your children or your parents. Yeah. and, and, you know, the, the way these floor plans are built now, they, they do work really well and get plenty of space for forever.

Tracy:

And then shared caregiving duties, which, which is the obvious one. So yeah, multi-generational housing, not a new trend, but definitely still on the rise.

Tego:

Well, and it’s, it is, it is a thing. And it’s I don’t think gonna go, go away anytime soon, especially with the millennial boom and the baby boomers, you know, aging too.

Albuquerque Real Estate News: 3 Things to Keep in mind

(Transcript Snippet): “Tracy:

So switching gears along the same vein, right? You were sharing with me a CNBC story saying Google is reporting that the hottest trends, some of the hottest trending searches right now regarding homes is when is the housing market going to crash?

Tego:

So get this Tracy that search has spiked 2450% in the past month. And it it’s interesting right

Tracy:

Along with other phrases that are similar, like why is the market so hot and how much over asking price should I offer on my home in 2021? So it’s interesting. Those are the spikes on Google searches, which you know, I completely understand. Yeah,

Tego:

Yeah. You know, it there, one of the things that, that happens and I know listeners to Kiva get this is that NEWS media will take something. It’s a very none, well, no, no. Yeah. The non, but, but it’s, it can be a trigger for people, a very emotional, you know, the housing thing, a lot of kids that are not kids now lived through the crash of 2008. Right. And so now they’re millennials right now, they’re getting into that, you know, maybe buying a home or maybe, you know, thinking about buying a home, they lived through that. They watched their parents go through that in 2008. So, you know, I understand that the angst that is out there, but what I was saying is, is Kiva listeners understand that news media will take something and, and try to create a story where maybe there isn’t a story, but obviously there’s a story there because people are curious.

Tego:

It’s like, how, how can this market be so hot? And when is it going to stop? We know it’s going to stop the question is, is it going to be just a slow coast to a stop or is it going to be a screeching halt? And, and my feeling right now is it’s, it’s going to continue at this pace for a while. Cause there’s no signs of anything, anything changing Tracy and, and a couple things just to talk about. So there’s three things that we want to keep in mind. And if you don’t see these in the stories that are talking about how there’s a, a home bubble building and it thought market’s going to crash, then they’re not telling you the whole story. And there’s one other thing too, that I’ll throw in here. But, but the first one is home price appreciation leading up to 2007, Tracy, it was like 10% average over the four years leading up to 2007, eight in the last four years now, today it’s been closer to 6%. So we haven’t had quite the acceleration in home price appreciation that did back then. The other one, Tracy, you could speak to this. I know, you know, this really well is, is the way lending standards have been now in the last, well, literally 10, 12 years versus the way they were back,

Tracy:

Right? The default risk now is so much lower than it was back in the 2000 early two thousands. Right? When now, now the products are very careful to make sure that the borrowers can afford the payment, that they have stability, that their credit score shows that they’re credit worthy. They’re good at paying their bills and being responsible. So the product risk is lower and the borrower risk is lower because the products aren’t available that allow people that shouldn’t be getting okay,

Tego:

Well, it’s those really aggressive what we call products, meaning loan products like adjustable rate mortgages, right? With the teaser rate that, that like, you know, for one year it would be 2%. And then all of a sudden it jumps up, you know, a couple of years later that got a lot of people in trouble in 2000,

Tracy:

Because when it jumped up, they couldn’t afford the payment anymore. And there are still adjustable rates, but why would somebody do that to go with the rates so low, right? Why not just lock in that low rate for 20 or 30, or

Tego:

The other thing you said was borrow or risk and borrow, or that’s always a tough word is you know, again, we, we know back in the day Tracy people were getting mortgages probably. Well, let’s just be honest, probably they probably shouldn’t have been getting mortgages. We know that that’s not happening today. That hasn’t happened in the last 12 years. I mean, you, if you haven’t applied for a mortgage in the last 10 years and you may, and maybe you did back, you know, in Oh, Oh three Oh four Oh five, it’s different, you know, you have to really prove your income, prove your ability to repay the mortgage. The other thing that’s happening is a lot of homes got purchased back in the day as a speculation. We’re not seeing that today. Most people that are buying homes today are buying homes to live in w the thing that’s interesting as a lot of people in, in just a side note on that, we’re seeing a lot of people that own rental properties, Tracy, that may be, you know, decided to keep it. They’re not really property investors. They just happen to have a home. They didn’t want to sell it. They didn’t like the market when they moved and they’ve been renting, but we’ve seen a lot of those people now putting those homes on the market, which is it’s actually hurt our rental market a lot from, from an inventory level as well. Right. Because it’s so strong,

Tracy:

Right. They’re saying, Hey, I’m finally at a place where I feel like I can make some money off that rental property and sell it because it’s not my passion. So we are seeing that for sure. So just two

Tego:

Other things I want to play. The third one is the, the, the number of homes for sale. W needless to say, if you’ve been paying attention at all, there are very few homes actually on the market for sale right now, very, very low it’s sub 700 homes on the market, in the greater Albuquerque area right now. Almost it, it hit almost 600. I think it’s gone up a little bit this week. I’ll know on Monday, if, when I get my, my new stats, I think we might be getting a little bit of buildup, which would be great. But just to put that in perspective, in 2007, when the market tanked, we had about 5,000 homes on the market, we have 700. Today

Tracy:

Is a huge indicator Tego, of how quickly the market could slow down, or the prices could come down. They just can’t when you’re at that inventory.

Tego:

Well, you know, it’s a supply demand, supply demand, right? It’s economics one Oh one,

Tracy:

A market shift for it to turn downward would take a long time just because we couldn’t get 4,000 houses on the market tomorrow.

Tego:

The fourth thing I wanted to bring up, which wasn’t on my list here, but I came to my mind is important when we’re, when we’re looking at, or looking at stories about the housing market, are they talking about the demographic trends? You know, what’s happening with the millennial group right now is a big deal. That’s a huge population. That’s moving through these age groups now that are right in their home PRI or prime home buying age. Right. And so you can’t, you can’t stop that. People want to start homes.

Tracy:

People want a home and they want ownership and they want to build your wealth there. Yeah, it’s, it’s interesting to go because again, what we’re seeing with that group is they don’t want the starter home. They’re buying like their second home as their first home, right. They’re not going and buying the cheapest home in a neighborhood. They can afford, they’re waiting until they can afford a home that they’re going to want to be in for a long time. And that’s part of, you know, w w their age too, right. They kind of skipped that first home, and now they’re buying the second home. Interesting.

Tego:

The thing I would say to people, if you’re, you know, watching the market and you kind of want to see that the two things that I’m watching really closely are the number of homes on the market, the inventory level and I’m watching interest rates, you know, if interest rates get up over 4% I think that will cause a little bit of a pullback in the market, even though they’re even know there’s still a bunch of people that want them,

Tracy:

You know, what it’s going to affect Tego is the people who were in that 200,000 price range that we’re kind of trying to get their first home. Those homes don’t exist in Albuquerque anymore, but very few and a lot of competition granted. But those people, if the interest rates go up 1% that rise in what their monthly payment could be, could price them out of the market. Yeah. But 4%, 5% for most borrowers that are buying 300, 400, $500,000 houses. It’s not going to matter. It’s for those entry level people where an extra $20 a month on a mortgage is going to start to push their limit. Right. Yep. Yep. Yep.

Tego:

You know, I just want to say one thing, if anybody’s listening and they’re going well, what about all of forbearance? What about the foreclosure rush it’s coming? We don’t have to time to get into that. My, my take my feeling on that. And most of the experts that I’m following and listening to is there just doesn’t appear to be there. There, isn’t going to be this big flood. And, and I did a couple of videos on that already, so I won’t go into that, but there just isn’t.

Parade of Homes – HBACNM’s Twice-a-year event for builders

(Transcript Snippet): “

Tego:

Okay.

Tego:

Let’s see. Parade of homes, Tracy,

Tego:

Big weekend for the home builders twice a year, the New Mexico, central New Mexico home. What is it? Home builders association, HBA is just what I always call them. They do their big parade of homes where they, they put homes out for open they’re open houses to show off the, the latest products and what the builders are.

Tracy:

Yep. And it’s Friday, Saturday, Sunday. So yesterday, today, Friday, Saturday, Sunday, and next Friday, Saturday, Sunday from 11 to 5. There’s 21 homes in the spring parade of homes. The the featured builder this year is Pulte homes at inspiration, which is in the petroglyph area. Just North of I-40 and West West of the river inspiration, the homes, the lots, there can be just some phenomenal views because it’s sort of below the petroglyphs. And if you haven’t been out that way and you’re thinking of new construction, give us a call. We’d love to show you that neighborhood as well as the others that are available, but that neighborhood is quick to everywhere. There’s some new cluster schools over there. There’s some new, big fields. Like if your kids play soccer, you probably know that part of town. But it’s, it’s a great neighborhood, but in addition, lots of other homes to tour to go, do you happen to know how people are touring them in the days of COVID?

Tego:

Well, I don’t,

Tracy:

I was thinking I didn’t find that out either because Eddie said that we’ll tell you how to get inside of them. There’s the safety protocol. So the homes vary right from Corales to the West side I’m sure there’s a map. So if you go to just Google homes of enchantment, but it’s the websites, homes of enchantment parade.com and it’s Home Builders Association of Central New Mexico. And it’s all the information is right there, but you can tour if you’re thinking of building anytime in the future or remodeling, this is the way to go, right? Go hit up these homes.

Tego:

Absolutely. And there’s so many people remodeling right now, Tracy, it’s, you know, there definitely has been a remodeling boom, and this is a great way to go see some of the designs, some of the looks, some of the trends, you know, what’s popular. One of the, you know, a couple challenges the home builders have had now, you know, in, in the last year is one supplies. There has been some supply chain issues for builders. So it’s going to be interesting to see if anybody had to improvise. I know there’s been some problems with certain appliance brands, people builders weren’t able to get. So they had to kind of do some creative stuff, their, you know, just, it’s amazing. You start thinking about all the different little bits, if you will, that go into a home. And you know, if you’ve got one part that, that you can’t get, you specked out a particular ceiling fan, and now you can’t get that ceiling fan, which, which has happened. You know, it’s a challenge. So they’re, they’re, they’re scrambling all the time. So it’ll be interesting to see. And, and I know, you know, there’s 21 homes this year, which is less than normal, which is, you know, no surprise however, there’s, you know, you’re going to be able to go see all of these and see what people have. The, the one thing is a lot of them are not for sale though. They’re either pre-sold or their, their model home that they’re not that they’re not selling. Right.

Tracy:

And the homes range from East mountains to Los Lunas, Corollas the Valley, it’s kind of everywhere. And what it says, it loads, just trying to read ahead on the safety protocol, it looks like you need to get on their website and click on each property, the ones you want to tour and see what they’re doing, because they’re each allowed to set up their own. But honestly you can view them virtually, right? Yeah. Just get on your computer if nothing else, but it’s going to be beautiful weekend. Get out, go out and tour some homes. So,

Tego:

Well, if nothing else, 2020 has 2021 has made a virtual tour of homes for sale. The, the standard, which, you know, we’ve been doing it for, I don’t know how long Tracy, but now it’s become much, much, much more common. Yeah.

Tracy:

We were ready for COVID unfortunately. So Tego you think back to 20, 21, 22 years ago, when we were getting ready to build our house, what we did, can you believe it’s been that long? No. We went to parade of home spring fall. We, we toured showrooms and it was part of how we figured out what our style was and what we loved. So when it came time to meeting with, you know, a designer to put our house together was an architect. It was a drafts person,

Tego:

You know, it’s funny, you, it just clicked with me. It was like, we didn’t have phones in our pocket, all the, I mean, cameras in our pocket all the time back then. Yeah. We would, we would have to like, you know, write notes and write names, a product, or try to find anyway that, sorry, I just, I aggressed there for a second. It was a little, little different now than 2022, 23 years ago. For sure. So, yeah. Yeah.

Tracy:

Think about, you know, people thinking about buying a home right now and wondering if it’s the market’s too hot and if the prices are too high and you know, when we were building many, many years ago, we felt like we stretched ourselves. Right. We built and we were saying to ourselves, well now is the time to put it in the house because once we get the house done, we’re not going to go back and change the floors to brick floors. Right. Yeah. And, and so we had to make some tough financial decisions back then of what we were going to put in the house. And we felt like we were spending too much. Well, 22 years later, we couldn’t have made a better investment. Yeah. Right.

Tego:

And what happens if, if you’ve never gone through, I, I always say everybody needs to build a house once in their life. You know, customer not, it’s an interesting process, you know, the, the custom versus semi-custom versus production. It’s a whole, you know, they’re totally different processes. And that is one thing I just want to mention if you’ve been thinking about building home especially custom, which is kind of a different animal get out there. Cause now you can talk to the builders. You can talk to lenders that

Tego:

Like L’Enfant, who’s the expert in financing for construction. She’s I know at one of the houses, for sure, she’ll, she’ll be out and about. And, and so the, the point is you’ll be able to talk to those experts about the process, what things are costing, you know you know, what, what their backlog is like. Cause a lot of the builders are right now, pretty backed up.