How to Speak New Mexican (Real Estate Edition) : Terrone? Terron?
Transcript Snippet: “
Tego: So Tracy, we’ve been doing a, a thing here on a team and we’ve been posting on, on our social media, just something fun. And it’s called how to speak new Mexican real estate edition. And last week we, we posted, or maybe it was two weeks ago, we posted Terrone right. As in Toronto, Adobe. And of course we had this big debate, is it with an E or without an E?
Tracy:
And I was like, what? I think we misspelled this on this post. It’s no E on the NT, E R R O N. Yeah. Or T E R R O N E. I’ve always seen it with an E. And so when it came up, we had some online bantering about, yeah. About, you know, what, what is it, Tyrone?
Tego:
Is it Tyrone or Toone? So, so anyway, it’s how to speak new Mexican real estate edition, Tyrone. So Tyron, Adobe, and you did a little research on it. You found it. What, what are Toronto Adobe’s made from?
Tracy:
Well, it’s, you know, they cut into the, so to make the bricks right. In the, instead of
Tego:
Pouring clay, instead of pouring the bricks,
Tracy:
Instead of taking clay and forming it in a form. Right. I see. So, yeah, they it’s like from the Rio Grande river valley, traditionally, where they cut into the sod and clay, and then they let it sun bake and, and stack it up and put a sealer or a stucco on it or whatever, but,
Tego:
Well, and then a friend of mine posted, you know, made a comment on it and, and he said, well, do you know what a gringo block is? And I’m like, I don’t know what a gringo block is. I never heard that one before. And then of course he told me what it was and I’m like, oh yeah, of course. So do you know what a green gold block is?
Tracy:
I didn’t get that fire. I saw the post, but I didn’t get
Tego:
The answer. Stacy. Who’s a, he’s a contractor. And I said, I don’t know what it is. And he said, it’s a, it’s a block they’re wood blocks that are hammered in between. Oh, the Adobes. So you can anchor stuff cuz obviously you can’t Mount kitchen cabinets to dirt. Right. So, so you, you know, they, they, they call ’em gringo blocks. I’d never heard that.
Tracy:
I didn’t know that, but Stacy CDE, great contractor. He grew up working side by side doing Adobes. And so probably 10 years ago now we had a house Southwest Albuquerque. I can’t think of what that neighborhood is off of Coors. And Arico now just past between a Crisco and Coors, there’s that cute neighborhood of Adobes and one of ’em the foundation, it was just a mess. Oh yes. And he went in and restored that Adobe’s foundation just beautifully. It was, it was such a great job, but there’s not many people who have that craft and the ability,
Albuquerque’ Dynamic Real Estate Market: Are There Less Buyers Out There?
Transcript Snippet: “Tego:
Let’s talk about that, Tracy. I, I, you know, right now we’ve been in this really dynamic real estate market in Albuquerque in, in, in the entire country really. But you know, the big question is, is, you know, is buyer demand slowing? Are there less buyers out there are, are prices starting to fall? And just from a anecdotal, you know, standpoint, Tracy, which you’re seeing with the team with offers, being written to number of buyers that are out there, what are, what are we seeing?
Tracy:
I would say Tego that we’re seeing, I, I heard the analogy, you know, we had great monsoons or rain, not really monsoons. It was a nice, steady rain this week on and off. And it was, we, it was like, you know, where we were in a monsoon and now we have steady rain, right? Yeah. I like that one. So for the housing market, it’s like, it it’s been just off the hook and now it’s still busy, but it’s not that frenetic busy. So we’re seeing offers on properties typically right away, if they’re priced for the market and the way the condition and location, but we’re not seeing 20 offers for that property. We’re seeing that when a, a seller talks to us about their home price, we need to look at the market and make sure that when they go on the market, they’re in the right range and not pushing it. Because right now we’re feeling things flattened out a little bit, which is typical this time of year. Right. Tego,
Tego:
So less bidding wars, but they’re still bidding wars for right. For certain houses and certain areas at certain price ranges. Right. There’s less demand let’s say, but there’s still a lot of demand,
Tracy:
Right? Yeah. There’s still lots of buyers in the market. Lots of people if you talk to lenders, right? Yeah. you’ll find that there are lots of pre-approved people waiting for houses. Ooh,
Tego:
I have a stat for that. Where did it go? I’ll just go up for memory. So mortgage bankers association, they do a, they, they keep track of how many people are applying for mortgages. And so I saw the may numbers, which is interesting because, you know, may that’s really, when interest rates really started to, to take off and nationwide purchase applications were down like 13% from may this year to may last year. But in New Mexico, it was only down 3%, which I found interesting. So we’re actually, there’s still a lot of buyers out there, which, you know, we
Tracy:
Know that yeah. We know that from working in real estate every day with our team, right? Yeah. There’s a lot of buyers waiting for homes, the right home for them to be available. And
Tego:
However, you know, what else is true at the same time is we’re seeing more price reductions now than we’ve seen in many years, because it just, I think, I think a lot of people maybe push the price, the list price a little bit too high. So we are seeing, seeing more price reductions now. And you can have both things true at the same time. You can have strong buyer demand and an increase in, in price reductions.
Affordability Crunch: Albuquerque’s Housing Crisis and Challenges
Transcript Snippet: “Tego:
And that’s that’s, I, I’ve got a whole bunch of stuff on that, that if we have time, I’ll get into that. What were, what all the experts are saying regarding 20, 22, 20, 23 going forward and, and forecasting it. And, and the short of it is most are predicting 20, 22 to be continued home price appreciation this year, and then maybe some flattening into 20, 23 out of, you know, hundreds of these experts that look at this stuff. There’s only a few that predict a, a negative equity gain, but, but most are just saying the pace of appreciation slowing down. And, and honestly we need that because of the affordability crunch. That’s really the crisis. When you talk, want to talk about a housing crisis, it’s the affordability challenges, right? And so let’s just go there.
Tracy:
We, we started on Corrales homes of the week. We haven’t even gotten to that. And here we are. I know thematic,
Tego:
I wanna, I wanna address something because the, the federal reserve has done us bad. They, they really
Tracy:
Us as in homes,
Tego:
As in, as in the real estate market and, and homeowner, well, let, let me rephrase that. It depends the way you look at it. If you’re a homeowner and you owned a home going into 2020, or you bought a home in 2020, or, or, or 2021, shoot, it’s great because they put so much money into the economy, lowered mortgage and interest rates. So low that it just made the housing market get on fire in, in the sense of, of just this, this really, really high price appreciation. And so now they’ve had to take interest rates. Mortgage rates were, you know, three, which were probably too low. Now we’re up at six. You know, some people are saying six and a half. They they’ve, they’ve really, they just overcooked it. And now they’re trying to auto, correct. And it’s really bad for, for first time home buyers that want to get into the market because home prices went up so fast because of what they did. And now interest rates are so high, it makes affordability even harder because of what they did. So I’m gonna just blame everything on the fed. No.
Tracy:
Okay. And when you say so high six, six, and a half percent, we’ve seen six and a half
Tego:
Percent. I know where
Tracy:
You’re going. It’s historically. Yep. It’s still very cheap money. Yeah. And you know, you see a lot of these posts through social media, right? Where people are saying 6% for your housing interest, but you’ll pay whatever percent for your car and this percent for your credit card, 18 or 20% on your credit card. But you think 6% is high for your housing. Yep. Right. And you can still get with six or 7% interest. You can still get a monthly payment that’s equal to, or less than monthly rent in our market.
Tego:
Well, and that’s that again, that’s the other equation you have to say is like, well, what is your cost of shelter? What does it cost to put you a, a, you know, a roof over your head? And, and it’s, it’s not like you can say, well, I’m not gonna buy, I’m just gonna rent because it’s cheaper. Well, no, UN unfortunately that’s not the reality rents have appreciated, you know, as a percentage wise, just as faster, even faster than home prices. So whew. That darn inflation just messes up everything, you know, it’s it is, it it’s, it’s rough, but you know, for, for if you, if you have a real asset, like real estate that is a, that is a certain bit of a hedge against inflation, right?
I wanted to address actually kind of a, a thing that came up had some comment about that, you know, the, that the housing market is in some weird place and, you know, it’s, it’s, it’s, it’s doomed and there’s all kinds of stuff going on and there’s a bunch of foreclosures in the, that are gonna be coming. And, you know, I hadn’t, I hadn’t heard that in a while because it’s just so like not a thing. And so I, I did some digging into it, really looking at the data about you know, what’s going on with, with home delinquencies and foreclosures and potential for foreclosures and filings for, for foreclosures in particular, in, in our market. And, you know, the, the thing is it’s, it’s been in an all time low, it continues to be in an all time low. Now there was a huge spike percentage wise, like double the number of foreclosures from 2021 to 22. We know why. Yeah, exactly. Because
Tracy:
There was a moratorium, right. So of course it’s gonna be double,
Tego:
Right? Yeah. So, you know, I, I saw these headlines saying that foreclosure’s double it’s like, well, yeah, when you go from one to two, that’s still double, okay. That’s not, you know, I’m exaggerating. But the point is the number of foreclosures that are happening in our market are extremely low. Like, like all time low. And, and, and then you go, okay, well, let’s take the next step. Okay. How many people, you know, have had a foreclosure filing, right. And you look at that data and it’s, it’s pretty thin. There’s not a whole lot of foreclosure filings happening. And then you take it to the next progression, which is okay, how many people are delinquent on their mortgage, you know, behind on their mortgage, not able to make their mortgage. And that number’s extremely low. And, and I, and, and I apologize, I don’t have in front of me, but I’m thinking the number somewhere around 2%, maybe two and half percent in all of New Mexico. So it’s, it’s a very small number that could potentially go into foreclosure. And, and the, the, the reality is even if every single one of those homes, which isn’t a whole lot came on the market tomorrow, that wouldn’t put any supply strain over supply strain on our market.
Tracy:
Right. And if those folks that aren’t able to make their mortgage and they are facing possible foreclosure, wanna reach out to us. We have some solutions, right? First of all, they probably have equity in their home, and they may be able to walk away with money if they sold it, versus just you know, didn’t, didn’t work with someone to help them out of that. So
Tego:
Well, and that’s one more part of that whole foreclosure conversation is the, the, the type of equity people have in their homes is at an all time hall. The amount of equity people have in their homes all time high. Right. And so, you know, people aren’t just gonna walk away from that. That’s very different than 2000 seven eight, when, when a lot of people didn’t have any equity or actually negative equity on their homes.
Tracy:
Let me just throw this in there, though. Okay. If people are behind on their house payment, or, you know, they are over overloaded with credit card debt or whatever, and they don’t have the income to claw their way out of it. So to, to speak, I get, yeah, sometimes you stop answering the phone, right. It’s just too hard to face bill collectors and things. And then, and they don’t realize that maybe by selling their house and reaching out for help, they might actually have equity in their house. They could tap into to help them pay off other things, or make arrangements with other people or other debt collectors to start making small payments and maybe negotiate what they owe down. Right. This isn’t our area of expertise, but we’ve seen it happen quite a bit with people where once somebody says, Hey, you know, this is happening to me and I’m embarrassed about it, but, you know, we can talk about it and see if we can help them get their house sold so that they do have possibly walk away with some money and a plan to help getting themselves back on their feet.
Tego:
Just one more thing on this conversation. I heard a housing, an analyst that I listen to and read all the time, and there’s a bunch of them out there, but, but one of his quotes is the us homeowners balance sheets are the best they have ever, ever been best credit scores, best equity ever. Right. And so this whole idea that there’s gonna be this whole bunch of people that, that are in this distress sales situation, it it’s, it’s just not there. Right. It’s just not there. So, okay. I think so, let, yeah,
Tracy:
Go ahead. You know, we don’t know the future, right. Tego of course. And you know, we’re not all about doom and gloom. We, we try to look at the statistics and report what we see, right. And when you’re at 1100 homes for sale, and we know we could have four or 5,000 and be in a more balanced market, we’re a long ways from four or 5,000 homes. So what, what analysts predict and you study this all day, every day, it seems like, is, you know, we’re not going to have a pull back in prices, but maybe a slow down in the growth of home prices or a flattening.
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