Albuquerque real estate market: More good news on forbearance and foreclosure

(Transcript Snippet): “Tego:

One last thing I want to hit on Tracy is prices. There’s a couple, um, national stories in particular talking about home prices, starting to not, not appreciate as fast, they’re

Tracy:

Still going up, but just not as fast.

Tego:

Correct. Which is actually great news, right? I mean, that is good news because the, I think the biggest challenge we have going forward is, you know, really an affordability problem, right? Because home prices have gone up so, so much so fast that eventually it’s going to hit a limit where the median income is not going to be able to afford the median home. We’re still much better than the national average and definitely much better than the regional average, you know, for other Sunbelt, you know, major cities. Right. So yeah, the affordability thing is, is definitely a challenge out there. Yeah. And the good news is that maybe a little bit of slowdown in, in home price appreciation is good news. The median price, and the average price did come down in August versus July nationally

Tracy:

Or locally

Tego:

Locally. Thank you for that. And then however, the price per square foot went up again. So we hit another all-time high in price per square foot in, in Albuquerque. So I don’t see any big turn in, in home prices right now.

Tracy:

I think, you know, seasonally, we see things, um, not appreciate as much right. This time of year through the holidays. So what we’re seeing is very normal. So when people say, oh, we’re having a big slowdown, I go, wait, we’re very seasonal.

Tego:

Yeah, it is. You’re absolutely right. It is normal to see some, some slow down.

Albuquerque homebuyer demand: what does it look and what the data tells us

(Transcript Snippet): “Tego:

Tracy. One of the things I’ve been looking at is this, this home buyer demand, right. We want to know, I want to know, you know, we’re, we’re real estate investors, we’re real estate brokers. We have a largest real estate team in, in New Mexico. We want to know, we want to be able to know what’s going to happen in our market, in the future. Right. We want to predict the future, right. So I want, I want the crystal ball, we all want the crystal ball. Right. And, and so I watch a lot of different things, but one of the things is a handful of key indicators that look at buyer demand, right? So what you, you know, what, what are the things that are going to foretell what’s going to happen with, with home buyers in the future? And one of the stats that we’ve had and we’ve had for a long time is pending sales, right?

Tego:

Well, pending sales is great. It tells us that the home one under contract, and now we’re going to have a closing in 30, 45 days. Right. That’s great. But what about before the pending sale? Right? What are the things that are, what are the behaviors that are, that are going on, that buyers are doing before the pending sale to kind of give us a glean into what, what what’s going to happen, you know, in the future. Um, and one of them has got this really great piece it’s, uh, uh, data that comes from realtor.com and they have a thing called market hotness, hotness it’s they only started this in 2017. So it hasn’t been around very long. And what they do is they, so realtor.com, if you don’t know, it’s like Zillow, you know, they have all the property listings in the entire country, on their website, every home for sale in the country, basically. And what they do is they can track, you know, what people are looking at, where people are looking at homes, how often people are looking at homes, how many times they’re clicking on their website. Right? And so what they do is they come up with this index that says, how does this market compare to other markets? And it’s a comparison it’s and, and what they’re, they’re, they’re doing a comparison as well as how much traffic they’re getting on a certain, a certain area market,

Tracy:

Really eyeballs on their site and non-specific properties too, to gauge how much activity,

Tego:

Right. Home search activity. Right. Which is, uh, you know, probably one of the first things that somebody does when they think they’re going to buy a home right now, until they get on welcome home abq.com. I’m sure we

Tracy:

Do have a lot of content there. Yeah.

Tego:

Yeah. And so, anyway, so that’s the first one. So, uh, the short of it is in Albuquerque. It’s very good. It’s hot. We’re, we’re, we’re, we’re still above. It really went really high. Um, starting beginning of 2020. And this was before the pandemic, before, you know, the brief recession we had because of a pandemic. Our market was already very strong back in January and February. I remember sitting here doing this radio show in January, February of 2020 going,

Tracy:

Yeah, this is a off the charts here coming up in 2020, and then COVID hit and then COVID hit. And we still had a few months of off the charts and we still had a lot of home growth price appreciation. Um, but right now the market’s hot and, and there’s other indicators, right. Besides that. So the besides online viewing, we’ve got feedback from our showing system

Tego:

And actually there’s two there’s, let’s put these in order, so, okay. So first off we’ve got people looking at homes online, right? So the next step is like, you know what? I should get qualified. I should go get a mortgage. Right. And so the next, the next step that we have is mortgage applications for purchase, right? Not mortgage application for refinance. Unfortunately I don’t have local data, but I do have national data. And it’s still trending about above, you know, 20 17, 20 18, 20 16, even above 2019. It went really high in, you know, mid, late 20, 20 all the way through the beginning of this year. And it’s come back down, but it’s still higher than previous years. So mortgage applications. Absolutely. Yeah.

Tracy:

Yeah. So, you know, we talk to local lenders, you know, legacy, mortgage, primary, residential, different different lending.

Tego:

I mean, there’s so many great lenders. And

Tracy:

When we talked to them, they talk about how many people they have that are pre-qualified. So to speak, have already filled out a loan app or in the hopper that are waiting to find the right house. And we know the demand is high locally. We just don’t have the stat for it. We have a national,

Tego:

Well, just another, this is, this is more just what we feel on our team. But, you know, we just have a couple of homes come on the market. And in the last week and lots of, lots of demand, lots of people wanting those homes so that the people are out there. The other one is what I call foot traffic, Tracy. And so now they’ve done their application. Now they’re going to go out and look at homes, right? So how many people are looking at homes and viewing homes. And that stat is very strong as well. And it’s really pretty much equal with last year, as well as I’ve got 20 19, 20, 20 and 2021. And we’re, we’re a little bit behind, um, 2019, both 2020 and 2021. And I think that’s more has to do with just the lack of supply versus the actual that people want to go look at them. Yeah.

Tracy:

Yeah. So what’s interesting is this just started getting tracked in 2019, right? So we know when we put a lockbox on a house for sale, we get the data of how many times that lock box is opened. And that’s where this data is coming from. Basically it’s appointments to view homes through an online system. So we’re seeing the fluctuations of how many showings are happening across our market, and you pull that data regularly and we can see it. So it’s pretty cool.

Tego:

So the, the, the last one and we already talked about it was pending sale, right? So pending sales is, is the thing that really tells us, okay, how many closings are there going to be here in the next 30 to 45 days? That’s generally the, you know, the escrow period. And like I said, a moment ago, we saw the second greatest number of pendings in August, 2021 ever in our market. So

Tracy:

There’s the hotness and with four different parameters of real statistics and real data to show that buyer, buyer demand is still very good.

Tego:

Here’s the headline. There is no indication of a fall off in buyer demand right now in the Albuquerque market for real estate. And, you know, and then you talk, you know, we look at the supply side, which we’ve beaten, beaten up pretty well is a supply side is very limited. Continues to be very limited. Homes are coming out in the market are going off the market very fast. If they’re good houses.

Fact or fiction: Albuquerque homebuyer fall edition

(Transcript Snippet): “Tego:

All right, Tracy, here it is. It’s fact or fiction, fall edition. Um, we, what were you pointing at? Oh, got it, got it. Uh, factor fiction. Um,

Tracy:

Home buyer Edition

Tego:

Home Buyer Edition. Let’s go through these.

Tracy:

I should wait for mortgage rates to drop what’s. The fact,

Tego:

The fact is mortgage rates are at an all time level, have been at an all time low. I mean, you know, we’re hovering anywhere from, you know, high 2% to low 3% and every indication is that mortgage rates are going to go up. Now we will say, we’ve been hearing that for years as well. Right? Mortgage rates are gonna go up. Mortgage rates are gonna go up, you know, back up about four or five years ago, they did go up, you know, got up over 4% and the market started to slow down. Um, obviously since the beginning, uh, just actually first couple of weeks after the beginning of the pandemic and in 2020 mortgage rates dropped substantially and have been down in this 3% range for a long time, every indication is that eventually they’re going to start going up.

Tracy:

They have to, but when, right. Yeah, exactly. So the other fiction, there are no houses on the market, so I might as well not look for a house to buy.

Tego:

Yeah. You know, what’s really interesting about that stat. We hear that and we, we hear that in the realtor community too. So realtor stop it. There’s no homes to buy. Well, of course there’s homes to buy. Do you know that, um, August of 2021 was the second most number of pending sales in the Albuquerque market ever.

Tracy:

Right. So

Tego:

Second to July of 20, 21, 20 20, Which was,

Tracy:

Which was off the hooks because the end of March, April, may, people were all at home, not looking at houses. So June went off the charts when people decided they could go with masks on and look at houses. So, so you looked at stats this morning, over coffee for, for us. And what we know Tego is houses are coming on the market, but they’re going off the market at a similar rate. So there’s no houses on the market, but we’re actually up a little bit too.

Tego:

I don’t know if you can say a little bit, but yes, slightly. Yes. A little bit is correct, but it’s a very little bit, we went from 1100 homes to 1,175 homes on the market, you know,

Tracy:

Weekly. We see that right at the end of the month, we are at the end of each week, we see a little bump up. And then by Monday, Tuesday, we go back down a little bit.

Tego:

Right? And so what’s happening is yes, there are very few homes in the market. And part of that is just coming on and going off so quick, you know, median days on is still four days, meaning half the homes that come on the market sell within four days. And that’s right.

Tracy:

So if you’re a home buyer, there are homes on the market, but you need to be ready. Right. You have to have your lending in order, if you’re using a loan, if you’re using cash, you know, you need to have something that proves you have the cash so that when we make an offer, it’s a solid offer.

Tego:

And I will say, you need a real estate agent. That is your advocate that understands how to work in this particular market. It’s very different than it’s been. And, um, you know, th the experience in working in this, this kind of high, I don’t want the thing high-speed market. Is that a good way to put it right now? Things are going really fast. You have to have a real estate agent that really understands how to work this market to be your out

Tracy:

And can be available. Right. Well, of course, we know that if you know, you’re working with somebody who wants to look at the house three days from when it comes on the market and that’s when they’re free, you’re going to miss out. So another, uh, fiction, every home is selling for above asking price.

Tego:

Yeah. Well, the, the, the truth is a lot of homes are selling above asking price. Um, the stat is it’s about 50% of the homes are selling for above list, price asking price. Right. And so, yeah, not everyone is, um, the, the thing, again, if you go back to the experience real estate agent, that’s in this market everyday knows what’s going on and sees what’s happening in the market. They’ll know which homes are going to be the ones that are going to be flying off the shelves as they say,

Tracy:

Right. The gems. Yeah. The neighborhoods. So, so best to connect. Let’s talk about trends. Let’s talk about positioning yourself as a home buyer and, um, being ready. Yeah. The, you know, uh, having a great realtor obviously is really important. Having a whole team working for you, your lender, um, realtor. Yeah. Yeah. All the inspectors, everybody.

Equity and homes: The big story in Albuquerque’s real estate market

(Transcript Snippet): “Tego:

This was the big story in the real estate, you know, press this week was, uh, I thought, you know, in all of these different news sources that I follow was the amount of, uh, tappable equity or the increase in equity in the United States. You know, we’ve had somewhere 15 to 20% home price appreciation. Um, just, just in a year. Some places have seen more than that. Some seem less than that, of course. But, um, uh, the, the thing that’s interesting though, there’s going back to that whole conversation about, okay, if you just pick one piece of data and run with it, you can build a story around that. So I’ve seen stories about how much, um, people are pulling equity out of their homes, and they’re doing it all over again, like they did in 2005 and they’re, they’re cashing in and they’re going underwater.

Tego:

You know, they’re, they’re, they’re pulling out more money than, than ever before. And that is true. A lot of people are refinancing. Some people are doing cash out, refinancing. Some people are not doing cash out refinancing. They’re just refinancing to get a lower payment and a lower interest rate. Right. But, um, despite that, despite the number of people doing those cash out, refinances that tappable equity in, in the United States hit another all-time high at the end of quarter one. This is, and, and, and let me just share it. I’m getting this from a, a source called block night. I’ve talked about them before they’re they do a lot of mortgage data information. Great, great resource. If you want to really get wonky on this stuff. And 8.1 trillion at the end of the, the, uh, quarter one, they just came out and said, the end of quarter two, it’s not now 9.15 over a trillion in additional homeowner equity, just in the last quarter or that quarter, I should say, not the last quarter.

Tego:

And, and so it’s a 37% increase in tax tappable equity year over year, uh, that, that the homeowners have. So it’s some big numbers and that’s good. And, and the good thing about that is we’re not in the situation and I wish I had the number exactly in front of me, but I will say that 90, I think the sum, the number is somewhere around 98% of all mortgages in the United States have at least 10% equity. There are very, very few people that are negative equity underwater, you know, on their home, which is great news. When we get into this whole conversation about the delinquent mortgages and people in forbearance and people facing foreclosure, um, a lot of those people, in fact, 95% of those people that are in forbearance plans have at least 10% equity.

Tracy:

I was thinking about that, those, those people that tease about, uh, percentages and throw numbers out. And when you said 95%.

Tego:

Oh, got it. Yes. Yeah. So that’s kind of the crux of the whole forbearance story. Um, other than, you know, every month more and more people come in are coming off and September was a big month for, or is a big month for a forbearance expiration. So we’ll know next month kind of how things are shaking out with that. But right now everything’s going in very, very good direction there.