Tracy
Hey, welcome to Albuquerque Real Estate Talk, the go to radio show for all things real estate in the heart of New Mexico. I’m your host, Tracy Venturi, and alongside is my fantastic co host, Tego Venturi of Venturi Realty Group, of REAL broker. Together we’ll be your guides of this exciting journey through the ever changing world of Albuquerque Real Estate. We’re so glad you’ve joined us. Whether you’re a first time home buyer, season investor, just curious about the market, we’ve always got you covered. So sit back, let’s dive into the latest news and trends right here on KIVA 1600 AM, and also on Facebook, YouTube, etc. Be sure to give a like or follow. And Tego, welcome. This morning, we have a very special guest.
Tego
We do have a special guest. Thanks for joining us again, everybody. We appreciate it and love talking about real estate. I saw a stat last week, 19 % of all the United States economy is driven by real estate. Wow. It’s a big number. One fifth. Big number. Yeah, it’s big. Well, the reason… Okay, let me set this up a little bit. So anyways, it’s Tego Venturi. And a lot of news stories hit this week. I’ll give you a couple of the headlines relating to mortgages. One of the headlines I saw on Fox Business was “real estate experts shredded Biden rule punishing home buyers with good credit. It is madness”, was his quote. I saw some others’ things. A lot of them were the right leaning media bashing on Biden, the Biden administration because of these rules. But basically, this is something that I’ve known about, we’ve known about for a while. And it’s these loan level adjustments on mortgages depending on credit score and other stuff. So anyway, I wanted to get the real story on it. We brought in the expert, Man Phan from here in Albuquerque. He is the area director, the Division Director for primary residential mortgage here in Albuquerque, one of the most experienced and smartest real estate mortgage brokers that I know in the Albuquerque area.
Tego
And so, Man, great to see you. Great to have you on and to break this down. And what is going on with these mortgage rules?
Man Phan
Thanks, Tego. Thanks, Tracy. There’s a lot of madness that’s going on, of course. Now, I’ll take it back a little bit. In the last few years, we’ve seen a lot of loan level pricing adjusters. What they are, they’re risk adjusters for us to price out a rate. What it does is it allows us to adjust based on pricing if a client is credit worthy, then it may be a cost a little less for that client to get into a home. But with the recent adjustments where it can be a political football is what you’re pretty much seeing right now is pretty much take from the rich and give to the poor. And that’s the reality is what’s going on out there. And it’s actually pretty damaging to certain homeowners and they cost it to certain homeowners. To give you an idea is that prior to a basic client that has maybe a 720 credit score with a 20 % down with this new adjustment, can potentially cost him by an additional half a % in interest rate just with the new changes which is going to be rolling out on May 1. These are things that has been going on for a few years now.
Man Phan
I don’t think that we noticed as much because in 2021, the average interest rate was 2.96. But Tego and Tracy, I’m not sure you guys remember, but buying an investment property, they started with a new LPA for buying an investment property or a second home in March of 2021. The difference in cost for a second home with a 20 % down would have cost you 2.25 % extra in points. And what points is the percentage amount. So you’re buying a $100,000 home, it will cost you an additional $2,200 just to buy a second home. Now, we don’t see that as much or is as impactful during that time just because rates are so low. And now, of course, with margin compression and everything that we’re dealing with, it comes to light. Now, I think that’s where I think where the news can really pick up on it, and it has impacted us. And there’s another adjuster I’m not sure if you recall, but there’s a debt to income adjuster that was supposed to roll out in February, but that was pushed back. There was a lot of push back from the National Association of Realtors and the Mortgage Bankers Association.
Man Phan
So it resulted in a delay and they pushed that back. And I think that’s going to be starting on September or August first or September first. And that’s anything over 40 % debt to income ratio. Now, saying that with all these different adjusters, it’s going to be very costly. You have the DTI adjusters, you add the credit score adjusters, all that stuff is going to be very impactful to us. Now, there are some pros and cons, and you can stop me anytime you ask questions, Terry.
Tego
Yeah, go ahead, Tracy.
Tracy
I was going to say, let’s find out your contact info and your NMLS number just to tell people how they can reach you.
Man Phan
Man Phan with Primary residential mortgage. My NMLS number is 492564. My phone number is 505, 2174032.
Tego
Awesome. Well, thanks for that. Okay, yeah, I got questions. Of course you do. I’ve got questions. So the way this is being reported is it’s basically punishing people that have better credit and giving people that maybe don’t have as good of credit, maybe don’t have as much of a down payment advantages over people that have a higher down payment and better credit. I guess the question for somebody that’s looking to apply for a mortgage, what is the sweet spot? What should they be looking for? Because we’ve always said if you’ve got a 740 plus credit score, that’s going to give you the best deal. Is that still the case?
Man Phan
Not necessarily. Now that out, you would prefer to actually put less down. So if you have a 740 credit score with the new adjustments, if you put 20 % down, it costs you an extra three eighths of a point in loan level pricing adjuster. But if you were just to put 5 % down, you actually get a quarter % in long level pricing adjuster. And now that’s our basis points, which equates to about an eighth of a point in rate. So actually, we warranty to put less down if you had a 740 credit adjusters. Now, some of the stuff don’t make sense to you. This is where it gets pretty complicated because there’s not really a sweet spot based when I’m looking at this because if a client where the adjusters are, where the improvements are is that you have lesser credit score. If you have a 660 credit score and you’re putting 5 % down, well, there’s about 100 bps savings in loan level pricing adjustment. Well, the problem with that is that you’re going to have still high cost when it comes to mortgage insurance. So there’s other better options when it comes to that.
Man Phan
You might go with an FHA loan. I don’t want to get into details in specific, but I just think this is more… Look, I hate to put my own thought process cost is behind this, but in the end, I think it’s going to be a net negative for everybody when it comes to this. And especially with the home buyers putting 20 % down. It’s going to be a bigger cost because the client’s not this doesn’t affect every client, but the clients with lesser credit, even though they put less down, I don’t know that’s going to be the best option for as far as conventional loans still. I mean, there’s other options because I was pricing out some mortgage insurance with a 5 % down with a 660. Well, it’s going to cost you? I think, 1.8 % on mortgage insurance, and that could go as high as 2.2 % on mortgage insurance. So it’s going to be costly. I just don’t know how much it’s going to benefit just anyone. I understand what the idea behind it. Now, there’s some great things that they wrote out where they removed… There’s an LLPA waiver for first time home buyers that meets 100 % area median income.
Man Phan
But again, it comes down to is I don’t know this is actually a benefit for even a first time home… I’m sorry, for lower credit scores buyers is what…
Tego
The thing that’s interesting… The thing that’s interesting is this is coming from the federal level and they’re just tinkering around with all these little things to do all these different things. And I think the big takeaway of what I’m hearing is talking to you that you live this, you do this every day, you train your team, you’re talking to your people about this all the time is you really need a loan officer that understands all.
Tracy
This stuff. You’re stealing my thunder. I was trying to get in on this conversation and say, We’ve got this financial genius on our radio show today and a brainiac sitting across from me. You guys are talking way above my head. What I take from all this conversation is why we encourage people to use local lenders and smart lenders like Man Phaninto here that we’ve got on who’s not going to just take a loan application and say, Here’s the program for you. They’re going to look at all the different circumstances around your situation and make sure you get in the right program that works for you. You might have 20 % down, but he might say, You might do better to do 5 % down and pay extra every month on your mortgage and you’ll have it paid off in 20 or 22 years instead of 30. So the benefits of local and someone that can really look at it are so huge.
Tego
Yeah. So I think that’s the takeaway here is it’s getting more complicated. We know that in the real estate side, there’s always more stuff going on. And just one last word I want to say on this is we have a housing shortage, we all know that. We have a housing affordability issue. It’s much more difficult for the median income person to find a home to purchase. It’s tough right now. They’re doing all this tinkering, but the issue is, in my opinion, it’s a local level problem. It’s local planning and zoning departments, it’s local regulations, it’s making it really difficult for builders to build, I think is what it comes down to. I know the city of Albuquerque’s got a whole bunch of stuff that they’re working on right now. This whole Housing Forward initiative, I think, again, same thing. They’re tinkering around the edges, and some of it may be helpful, like putting an extra casita in your property and stuff like that. But it doesn’t really get down to the core issue that we just don’t have enough housing units and we need to be building more. Let’s talk about mortgages real quick, Man, just in general and what’s been going on in the mortgage markets.
Tego
I know you’re, again, pretty wonky on this. You follow it all the time. Mortgage rates have been in this mid six range, I guess, for more qualified borrowers. What are all the prognosticators saying about mortgage rates here through the summer?
Man Phan
It’s most likely going to decrease. We’re seeing with inflation continued to drop, we’re most likely going to experience a relief in interest rates and mortgage rates. I really do feel, and I’m following pretty much all the experts here that by the end of the year, we should be seeing in the fives again, which is, I mean, again, I can’t predict it, but we have seen some relief in the last couple of months. I’m sorry, the last couple of weeks it crept up a little bit, but that’s going to be an ongoing process. But I do feel as long as it’s stable in the mid 60 s, I think the market is still going to be fairly strong here. Again, you’re dead on when it comes to it’s still inventory. It doesn’t matter what the interest rate is. There’s no homes to sell.
Tego
I was going to go into that data here just in a minute. In Albuquerque, it’s not good. Just people aren’t selling their homes as often. They’re not moving as often. And so there’s not a whole lot of things to choose from for people. But there were still 600 homes that went under contract in the last 30 days.
Tracy
In Albuquerque. We’re stealing your thunder here, aren’t we? Yeah, I know. So Man, any last words before we thank you for your time on the show this morning?
Man Phan
I appreciate it. I think this is a great… It’s still a great market. I’m still very optimistic and I always tend to try to be optimistic during these types of times and we still tend to be fairly busy. But I appreciate your support and how you support the market and letting us know what’s going on. Actually, I listen to you a lot of what you get to say. I know that data geeks like myself and Tego, we tend to try to speak over a lot of people and use a lot of language a lot of people don’t understand. But it’s like Tracy, you got to bear us down and make us reinunctiate pretty much everything that we read the day before. So I appreciate that. So thank you guys. But yeah, anytime you need to feel free to reach out to me, I’m with the primary residential mortgage. My contact number is 5052174032.
Tego
Great. Thanks, man. Thanks for all your support and thanks for all you do in the community as well here in Albuquerque. So we’re going to let you drop off and we’ll continue on. We’ll catch up to you later.
Man Phan
Thank you guys. Talk to you later.
Tracy
That was the perfect lead to your stats because you were talking about homes and that you had a whole summary. So let’s dive.
Tego
Right into that. Let me give you this. Again, it’s Tego and Tracy Venturi with the Venturi Group of Reel Broker and Albuquerque. We are doing show number 443, did we decide? Yeah, here in late April of 2023. And if you want to reach us, you can call us at 505 448 8888. Okay, there was a commercial. I know we don’t do commercials in the middle of our show normally, so we just go right.
Tracy
Through it. But I forgot at the beginning of the hour to say call us at 448-8888. There you go.
Tego
Such a.
Tracy
Good number.
Tego
Such a good number. Who picked out that number? That person was really smart.
Tracy
Yeah. He is very smart.
Tego
Okay, so get this. In Albuquerque, Greater Albuquerque area, there were 995 homes that came on the market in the last the last 30 days. Of those 995, 605 of them are off the market, meaning they’ve gone pending or they’ve already.
Tracy
Accepted a contract or closed.
Tego
Yeah, exactly. Which means there’s 300 and some that are active, still 300 and whatever it was, 390 basically, that are still active. But a lot of those just came on the market this week. So there’s that.
Tracy
So there’s time for them to go off the market by the weekend, right?
Tego
Yeah. So there’s only 163 of that 995 that are still on the market after 14 days. I looked through those and most of them, well, you’ve got a lot of higher end homes. We’ve got some really high end homes that are on the market, and then we have some lower end homes too. It’s that middle area is still doing really fast. But what I wanted to get to was the speed at which homes are selling. 506 homes sold in seven days or less. That’s 50 % of the homes. 50 % of the homes.
Tracy
That came on the market in the last 30 days.
Tego
When under contract within seven days are basically sold immediately.
Tracy
From my perspective, running the sales end of the real estate team, what that means to me is we have to be really great helping our buyers make sure they’re ready. They’ve got their lending in place, like what Man Fon was just saying, that they’re ready to be a buyer and that they can move on a house that they see. Otherwise, it’s going to be sold. They can’t wait. We had a client last week and they wanted to see a house nine days after it had come on the market. They called right away, but they said, We can’t see it till next weekend. And we were like, Well, let’s do a virtual showing, or let’s get you on Zoom and we’ll walk through it, or let us get you information because by nine days from now, is there any way we can get you in that house sooner? And of course, that house went off the market before they could see it. So we just have to make sure from our real tour standpoint that we are helping people be ready because if half of the houses are selling that come on the market within seven days, they need to be ready buyers.
Tracy
And if you’ve got a loan, we need to make sure you’re like a buyer with cash because the lender is a strong lender. And we have that letter from the lender that says, you’ve already applied, we’ve checked your credit and your income and you’re ready to go.
Tego
And speaking of local lenders, like we were just talking to Man there about working with local lender. And that is critical because it does matter. Who the pre approval letter comes from is going to matter when.
Tracy
The listing.
Tego
Agent and the seller when they’re evaluating multiple offers. A lot of little tips there on that.
Tracy
I derailed you, but just one more thing on that since we’re talking about the lending piece. There’s some great online lenders, no doubt. But when clients get online on some online site and put in their information, they get back an approval letter, it says you’re approved for this. They don’t typically have that long conversation with a vendor in person or on the phone because if they’re local, you can sit down in their office, which is great, and have that conversation about other loans that might work for them better. It just spits out what the system thinks that loan should be. That’s what we were talking about with Man F on. Go ahead, tell us more stats. Well, I.
Tego
Just wanted to talk about, again, it’s late April. I don’t have full April data yet for Albuquerque, but I will tell you this, it does look like sales are going to be down. We know that. This is the number of homes selling. We’re down about 30 % if I compare last April to this April so far. Again, same period. The number of people selling and the number of homes exchanging is just down, and we know that. However, at the same time, home prices right now for April median price up 6 % versus April last year, which is right in line with everything I’ve been seeing. There was a big story this week, Tracy, about this whole idea that people just are not… And actually, that’s a really good point. So what I wanted to say was the number of new listings is down 30 % as well. And last year it was very low. Again, if you compare April of this year to April of last year, April of last year…
Tracy
April of the year.
Tego
To April of the year before, it’s like people are just not putting their homes on the market as much. And so there’s been a lot of stories about that. Realtor. Com just did that study, right? Right.
Tracy
It was a very interesting study. You sent me the story. It talked about people who may have been sellers, but they’re not selling their home because they’re loan locked. They’ve got that lower interest rate and they really have to have a compelling reason to move. Of that, they said that 82 % of the people looking to buy and sell a home feel locked into their low rates, so they’re juggling. But the thing that was interesting is 25 % need to sell their home for some personal reason. There’s always a reason. There’s always a reason why somebody would want to sell. But part of it is also finding the right house. So if you sell, you can make sure you buy. But it also says that about 90 % of the people that are going to be selling, the ones that need to sell or decide to sell will also be buying a new home again, not just becoming a renter or moving into some other situation.
Tego
Yeah, that’s one of those funny things in the real estate, e con world. Some people equate real estate in the same way like a stock sells, like somebody sells a stock or a treasury. You sell it and then that’s it, you’re done. You don’t go and buy something else. Well, in real estate, most of the time when somebody sells, they’re buying something else. So it’s not like even if you had a whole bunch of people decide to sell right away, they’re still going to be buyers as well. So it’s this… What’s the right term? And I’m sorry, I’m not able to articulate this better, but it’s not a zero sum game. That’s what I was looking for. Right. So I.
Tracy
Said about 90 % are intent on selling and also buying. The numbers 86 % in that Realtor. Com survey. And since most of those seller buyers will be signing up for a new mortgage, it’s going to be a higher interest rate and their new home purchase will likely put an additional strain or change their budgets a little bit because their payment might be higher. Interesting study, but we knew it. But now there’s numbers to it that show it that people aren’t wanting to sell if they don’t have to because they don’t want to lose that great interest rate. Although we have helped quite a few people this spring that have given up a lower interest rate and have made the move.
Tego
Well, and the other phenomenon that we’re seeing is a lot of people that don’t need to sell to buy and they’ve got a moderately priced house, they become landlords. Now they’re going to keep that house, keep it as an investment property and purchase the next house.
Tracy
One other thing just along the same vein, Tego, is for people who want to sell but they’re worried, I don’t want to sell and not find the house that I want to buy. There are some really great loan programs out there right now where you can do some bridge loan different ways so that you can buy and then sell. Even if you normally wouldn’t qualify for the two mortgages, there’s some products out there that are great that could help people feel more confident in buying, knowing they also need to sell, but they want to make sure they find the place to buy first.
Tego
Exactly. That is a challenge for people. That’s one of the reasons we offer the instant offer cash offer option for people. If that makes sense for them, if they have to have a drop dead close date, they have to know exactly what they’re going to be netting out of the home. That is something.
Tracy
We offer. Great option because you can choose your date and you can put it out there a little ways. That’s a great option. Okay, what else?
Tego
I posted this. I did a video on it. I posted it on our Facebook as well. And there was a study that came out from the National Association Realtors just this week. And it talked about the wealth gains for homeowners and how it broke down by not just across the board, but it’s also based on different income levels. And then also by race as well. And it was pretty eye opening. It’s some of the stuff that you and I know about. One of them that they found is that homeowners have 40 times, not 40 %, 40 times the amount of net worth than renters. Now, and like I said in my video, we could debate cause and effect here, right? But the numbers are clear that homeowners do have a lot more net worth. And so in Albuquerque, the number was at the lower end, which is 80 % or lower, it was up to 80 % of the median income. People that owned a home in Albuquerque in the last 10 years, they’ve gained about 50 some thousand, 52,000 in just net worth just by owning a home. That was the lower brackets. The middle bracket, which is the 80 %, up to 200 % of the median income, it was like $89,000.
Tego
Then in the upper bracket, which is 200 % or higher the median income, it was $122,000. So over the last 10 years, we’re going back to 2012 now, homeowners have done pretty well in Albuquerque. It’s actually lower than some other markets, which in my, from a total e con standpoint, I like that because it’s slow and steady.
Tracy
Yeah, slow and steady.
Tego
The other thing that was interesting is that the time, the ten year, the time that people stay in their home, the average time in their home, people in the lower income brackets was longer. It was 19 years where the upper income bracket was 14 years, which is still a lot higher than we’ve always thought. There used to be this thing everybody said, Oh, average time in a home is seven years. It’s like, No, it hadn’t been that long. It hadn’t been that way in a really long time. People stay in their home a long time. Going back to what we were just talking about, I think that’s going to go up. People are going to be staying in their homes longer, especially if they’re locked in at those 3 and 4 % mortgage rates. Interesting study, but 19 years on average.
Tracy
That’s a long time.
Tego
The home.
Tracy
Ownership numbers are interesting, too. Good information to go.
Tego
Yeah, it’s good stuff. Tracy, if somebody wants to reach out to us, just talk about getting their home listed and sold.
Tracy
What do they do? Well, sure. The first thing is just reach out and we’ll talk about what the goal is and how they want to be worked with. Do you want to come into our office and talk about the process? Do you want an appointment at your house so that we can go through it with you and talk about how we market and sell and talk about your goals and your timeline. A lot of times people think every one of those first appointments about selling a house has to be in their house. And that’s not true. We’ve done plenty of in office appointments and gone through everything, and we focused on the goals versus their house.
Tego
And of course, a few years ago, we did a lot of virtuals.
Tracy
We did do a lot of virtual a few years ago, and it worked really well. So we can still do that. So we can do virtual yet today and have you walk us through your house if you want. But a lot of people, their house isn’t ready to be on the market yet, and they’re hesitant to call and reach out because they think their house has to be show ready by the time they do that. And honestly, we’d rather see your house how it is to help you put together and find resources for you if needed, so that your house can be show ready when the time comes. Because a lot of time goes into getting your house top dollar condition, right? To be ready and have it presented as best as you can. We know not everybody presents their house in the same condition. Sometimes we’re working with the state properties.
Tego
Well, I want to talk about that because I think it’s critical because I think some people may be hesitant to call a real estate agent, realtor, because they feel like, Oh, my house is a mess and I don’t want to show it. I don’t want anybody in my house. But we have options for that. We have ways we can help people with that.
Tracy
We absolutely do. The best thing is to schedule a time to talk with or meet with one of our main home selling partners on the team that really specializes in working with home sellers. Sometimes it’s me, sometimes, most of the time, it’s one of our home selling specialists because that’s what they do every day and that’s what they’re best at. But scheduling that appointment, whether it’s a phone call first, an in office appointment first, or in the home first, or via electronic means, Zoom or FaceTime or something like that works as well. Yeah, for sure.
Tego
There are a lot of people that aren’t real estate professionals that aren’t licensed that are doing a lot of marketing to say, I will give you cash for your home. You see the signs on the side of the road? Cash for your home. I just want to caution people to proceed cautiously with that because we do see some deals going through where people could have sold their home for a lot more money. Even with.
Tracy
Another cash offer. Exactly. Not necessarily with all the showings and things.
Tego
Exactly. It’s a really.
Tracy
Good point because we have a lot of ways to get somebody a cash offer or an offer with a loan that might net them a lot more than some of the cash offers. One of the things about working with the realtor is our code of ethics is honest and ethical, and it’s very important to us. That’s our livelihood, right?
Tego
Well, one of the things in the realtor code of ethics is we have to give what we feel is the true value of the property. We can’t undercut it or overvalue it for some reason to benefit.
Tracy
And we’re going to give data that the agent the best we can because not every property is easy to say this is the value of that property because of the variables and we’re looking for other properties that are like kind. Hey, we’re in New Mexico. It’s hard to find something very similar to some of our unique properties. But in any event, when people are working with cash offers, it’s always best to also call us and have us get some information and maybe present a different cash offer to make sure that you’re being well taken care of.
Tego
Yeah, it worries me and bothers me when I see people maybe leaving money on the table when they didn’t have to. Even though they’re in a bad situation, distress, whatever, they just want to get done with the home, I get that. But even in those cases, they should be shopping around for sure. Yeah.
Tracy
I think we’ve come to the end of our time here today. We’re done.
Tego
Tracy, how to get people get a hold of us if they want to talk real estate. Give us.
Tracy
A call at 448 8888. Obviously, we’re online at welcomehomeabq. Com. If you need Man Fond’s contact information, we can certainly get you that as well. Always happy to be here and presenting our take on real estate.
Tego
Appreciate Man being on talking about mortgages and what’s going on in that world. There’s always something fun going on in the real estate world. We’re the Venturi group with Reel Broker. You can reach us at 505 448 88.
Tracy
Make sure to watch us on YouTube. Follow us on Instagram. Give us.
Tego
A subscribe on YouTube. I really could do some more on that. Actually, we’re doing pretty well there.
Tracy
This was KIVA 1600 AM, and we’re always happy to be here. Until next time. Thanks.
Welcome. It is Albuquerque Real Estate Talk with Tego and Tracy Venturi. I don’t have Tracy today, but I have a very special guest that I’m going to introduce here in just a moment. It is Saturday morning and it’s Episode 442, I believe, is what we’re on here in mid April 2023. If you want to reach our real estate office, we are at 505-448-8888. We’re the Venturi Realty Group with Real Broker here in Albuquerque. Wow, do I have a special guest? I’m really honored to have you here, Madam Treasurer, Bernalillo County Treasurer, Nancy Bearce with The Treasures’s Office. The Treasures Office. Yeah. You guys reached out to us, so I really appreciate that. It’s that time of year. It’s tax time for property taxes. We were joking in the lobby here. It’s like you’re the mean tax collector for property taxes. But we’re going to get into a lot of information about that, what the treasure does, what your role is, how people can pay taxes, what people can do if they have issue paying their property taxes, all this stuff. So that’s what we’re breaking down today. Anyway, welcome,
Thank you for having me.
Or Treasurer Bearce, I should say, would be more appropriate and more official.
So how long have you been county treasureer now?
I am halfway through my second term, so six and a half years now. Wow.
That’s awesome. That’s great. 2016, I think I saw was when you came into the office?
January first, 2017. I ran in 2016.
Got it. So what inspired you to be the finances person? How did you get into this whole financial world?
Well, it really came to me through another elected who said, You know, Nancy, you have a history in public service of fixing departments. I think we’re going to need that with this office. I do. I have a long history since returning back to my home state, working at APS, working with the state. I saw that. I’ve always been very good at passing on my audits, defending budgets in front of the legislature, all of those things that you have to do. It was really just asked of me, which is very surprising.
That’s.
Great. I said, Okay.
Speaking of what you do, what is the role of the treasurer? Because I know at least in the realtor community, there’s confusion between what the treasure does versus the assessor. You both play in property and then the clerk, too. You, all three of your roles overlap into real estate somehow. But what’s the treasure’s role directly?
That’s what’s so fascinating about it and why actually the three of us, the clerk, the assessor and I are elected is because we are in the constitution as officers and so we are elected by the public. But my role specifically is in state statute, the constitution, and the Bernalillo County Charter that we now have. I say it very, very closely. I don’t go on too much about it, but I collect all the property taxes for all the public entities that have taxing authority in the county.
Got it.
It. It’s not just.
Bernalillo County. Go through the list. Obviously, it’s like APS.
Aps, University UNM Hospital, CNM, any of the public charter schools as well.
Let’s see, CNM. You think also of…
I think of like a MAFCA and Middle Rio Grande.
Conservation district. A MAFCA, the Conservation district, if you live close to the river. But there is one also in the East Mountains. T here’s the Astantia Soil and Water Conservation district. Okay. And then also…
You get out there. Well, I know the county goes.
All the way to… The county goes way.
Out there. What is that? Mountain Valley Road. Yeah.
Interesting. Okay. And then also some goes back to the state because they also take out bonds and they have to collect public money as well.
So your job is to basically manage, collect and manage and distribute the funds of the county.
And there’s the other piece. The last piece is I’m the banker for the county. I see. I have that relationship with the bank of opening all the accounts, making sure that the correct people can sign on those accounts as well as the investments.
Yeah. So if it was a Corporation, you’d be the CFO, basically, or the controller or something like that. Would that be fair to say?
Well, it’s interesting because there’s also a deputy director of finance in the county. I don’t do the accounting, I don’t pay bills, like accounts receivable. I see. Okay. So we strictly limit it to I’m the check and balance to that piece in the county.
Okay, this is my big hardball question here. Yes, sir. How’s the financial health of Bernalillo County right now?
We look fantastic. The news was let late last week or early this week that for our credit rating, we got that and continue to have the Triple A rating for bonds. And we’ve had that all the years that I’ve been there.
Let me ask you, when you came in, was there some cleanup to be done?
There was a little bit of cleanup to be done and a little bit of guidance on how things should run. We really wanted transparency, accountability. Ethics was high on the list. But for me personally, I knew there was a break in trust between taxpayers, the public, as well as the commissioners, and really needed to work on bridging that relationship, letting them know who I was, what I came into the office with, and expectations so we could continue to form a really good working relationship because I think that had broken down.
Yeah. Well, it’s always trust, right? It’s trust in every relationship. Absolutely. Yeah. I just want to remind people, you’re listening to Albuquerque Real Estate Talk on KIVA, 1600 AM, as well as we play on YouTube and Facebook. We’re talking with the Bernalillo County Treasurer, Nancy Bears. A gain, great to have you here, Treasurer Bears. How is the funds… Part of your role is protecting the funds that you collect, correct? Or at least making sure they’re safe. So how do you do that? How do you manage the funds, basically?
And we call that.
Being a fiduciary.
The fiduciary. Right. So I work on behalf of protecting that money. I don’t make any decisions that would be against that or would give me more money. No, that’s not the role. We came up in the office my first year with what I call the three bucket strategy with the investments. It’s very much based on everybody’s household budget, usually. First is how much do I need this month to pay my bills? That’s your first bucket, right? Your second bucket is how much do I need for the next year? Because we know homeowners insurance, car insurance is often six months at a time, just like taxes are. So how much do I need for the year?
And.
Then everything else is covered. So that goes into our reserves. Reserves are very much mandated in state law of how much a minimum is that we have to have in reserves in case anything happened. And that’s for any county in New Mexico. And then Bernalillo County, on top of that, adds another 5% to half.
Got it.
So how I invest is all in state statute. There’s probably about 50 pages on investments because we have a lot of things in New Mexico. We have the state investment council, we have the state treasureer. But then for me in the county, I have very prescriptive things I can invest in. It’s not anything you and I can invest in, like an IRA, a mutual fund. No, they have to be very safe, very secure. Usually, they’re US treasuries, fixed income where I’m going to get this much back. But it’s very safe. It’s backed by the US government, so we’re not going to lose any money on that. Yeah..
So it’s protecting those funds because you have bills to pay.
We have bills to pay and we don’t want to lose anybody’s hard earned money because that’s what taxes are. Yeah.
Yes.
They are. Yes. And that’s where the trust comes in between us. You’re going to trust me that I’m going to invest this and use it in a public way that is good for all of us.
You know what I realized is it’s actually April 15 when this is playing, but that’s not the taxes we’re talking about. We’re talking about property taxes, county property taxes. And so let’s talk about that. We are in second half collection season, I guess, I don’t know if that’s what we call it, for 2022.
Which is very confusing. This is 2023. Why are you still collecting taxes in ’22?
Talk about that whole paid arrears and how that works because we deal with that in real estate when we’re talking to people. It’s like, Okay, no. Well, wait. No, you haven’t paid that yet. No, it’s the next year. It’s like, No, actually, you haven’t paid that yet. That’s because it’s paid arrears, right?
Right. It’s paid to us in the rears. Maybe the homeowner is paying it every month if they have a mortgage with an escrow account, then it is being paid in that sense. But when it comes to us, it only comes in those two six, what is it, biannual payments? That’s because, again, things are in arrears. When you think of the calendar year, January through June is first half, and those are paid in November and December. Second half that we’re in now, those are the July through December taxes that get paid April and May.
Taxes, I saw the video you have on your website. By the way, it’s Bernco. G ov treasure is your site. If you have a mortgage, I think most people know that… Listen to this, we talk about real estate all the time and most people understand that there’s an escrow set aside for property taxes and insurance when you’re paying your mortgage. But if you don’t have a mortgage, you need to pay your bill. You have to pay the county. I know that the second half with just due, it becomes late or delinquent when?
May 11th. Okay. It’s due April 10th by statute, but they give you a 30 day grace in state law. You have till May 10th to get it into us. We do accept postmarks if you drop it in the mail. But if it comes to May 11th, after midnight, then you get some late fees put on that.
Do you have an idea how much that is just off the top? I do. Is it percentage? Okay.
Yeah, there’s two fees. One is a penalty that’s 1 % of whatever you owe. And then there’s interest, which is also 1 % of whatever you owe. I see. So it’s not a huge amount. It’s not like a credit card charges you because we’re government. We’re not in it to make profit. We’re in it just to say, You’re late.
Don’t you want to pay us? I have to say on some land that I own that I forgot to pay and it wasn’t a big dollar amount. I was like, O ops, but it’s like, Oh, that wasn’t too bad. It was like $3. Because it was a small tax bill because it was just vacant land, low value vacant land. And speaking of, we have a lot of vacant land in Bernalillo County that’s individually owned, correct?
We have some.
We’re.
Not rural. It’s not like Sandoval where you have whatever 80,000 individual lots.
And we’re a smaller area county, too, like Los Alamos.
Oh, true. Compared to Sandoval, which is sprawling.
Yeah, it goes all the way up to San Juan County, over to Santa Fe.
Yeah, it’s huge. Yeah, it’s huge.
Paying your bill. That’s how the taxes are in those two biannual payments. But when you think of the calendar for taxes, they’re just like federal income taxes. They start January first and go through December 30th of the year. But remember, and this is where I’ll flip to what the assessor does, is they have to value properties on January first. Who’s the owner? Where’s it located? Do I have to go out and look at it again? Maybe somebody’s added an addition, whatever that is. So that’s they have to get all that work done. Then April is your notice of value that you get for, Okay, how much has my value gone up? Do I like that? Do I think that’s right? Should I protest it? Then all that takes time if there’s protests of the assessor because they have a protest board, usually through August.
I’ll tell you, most people that have a property are getting those notices of value or have got them already for this calendar year.
Because we have a new assessor, they did ask for an extension from the state, so they’re going out.
May first. That makes sense because I’ve received them for S and I own one little property down in Valencia, and I’ve already gotten those, but I did not get Burn Co. Yet, so that makes sense. Okay.
They asked for an extension. That’s important, your notice of values, because once you get that notice of value, you’ve only got 30 days to apply for a property value exemption. There’s about four or five exemptions that reduces the value of your property.
So if you’re at $100,000 in the value, but you’re a veteran, that’s a $4,000 reduction.
So.
Then you go down to what is that, 96,000?
Yeah, got it.
And they’re great because that ultimately will lower your property tax.
Yeah, your tax burden. So again, it is that season right now. If somebody needs to pay their taxes, I saw on your website you guys have a bunch of different ways people can pay their taxes, right? Do you want to just run through that real quick?
Sure. And we really focused on that was, what can we do to better that payment system? So you can pay online and online you can pay by credit card, debit card and echecks. You can actually open your cheque book, put in the routing number in your account and it’ll be online. So that’s fantastic.
I will tell you, the new software, I don’t know when did that come in? That’s been a year or so, a little over a year, right?
Two years ago.
Two years ago. That is really nice. People haven’t I’m a software person and a tech person, so I was very impressed. I know Sandoval County has it now as well. It’s the same platform, more or less, and you can see all your properties if you own multiple properties like myself, since I’m a property investor. I can see all my properties. I can see what was paid, what wasn’t paid. One thing that was a flag for me this year is one of my mortgages, they didn’t take care of paying it. So it was like, Oh, you guys messed up. So I had to reach out to them. It’s because they transferred mortgage servicers and it just got lost in the shuffle. But yeah, it’s a great platform. That’s good. Thank you. And then you can… I think Rio Grande Credit Union, right? Yes, Rio.
Grande Credit Union. Any branch, you can bring your money and that coupon or a copy of your tax bill. Put it in an envelope and just take it to them. They’ll get it to us on your behalf. That’s great. Then we have, what is it, five or six drop boxes that you can bring, again, in an envelope, your payment and your little invoice and drop it in. Usually, they’re at community centers, but I do have one down at City Hall where we used to be. We left it there because most people liked it there.
Then, of course, if you want to come in person to our new building at 415 Silver, right across from PNM, because many people like to pay in cash and we don’t take cash in the drop boxes. Rio Grande, you can get a cashier’s check and then drop it in and hand it to them. There’s lots of different ways.
That’s great. Well, I’ll say it because you probably won’t, but there’s no excuse. There’s no reason to say, Oh, I don’t know how to pay. No, there’s plenty of ways to pay. There’s plenty ways to pay. Let’s talk about somebody that maybe has some hardship and they’re not able to pay their property taxes. What should they do?
Definitely call us. Don’t be embarrassed, don’t be ashamed because we all get behind on something. Especially coming out of COVID. Some of us aren’t up to speed yet and are having difficulty. D efinitely call us and talk to us about the options. I have a whole department for delinquency accounts. They all work with you about, Well, what is your budget? What can we put down for monthly payments to get you paid up?
Even.
If you have to pay those late fees, let’s get you budgeting some money so that we can get your account paid off.
I don’t know if you have or… If somebody stops paying their property taxes altogether, what’s the process? Obviously, if you stop paying your mortgages, there’s a foreclosure process. If you stop paying your property taxes, is it the same thing? Is there a foreclosure process or how does that work?
There is not a foreclosure process. By state law, again, very prescriptive, we have up to three years to, quite frankly, badger taxpayers, phone calls, letters about, You still owe, you still owe. Come on, call me. Let’s get this going. But at that three year mark, we have to turn that account, that property, over to the state. T hat is the state tax and revenue department, and they take over the collections. T hey’ll collect and they’ll still give us the tax portion, but they will keep the penalty and interest for their efforts. T hey’ll also charge $125 fee for their collections. The part that really is their authority is that they can auction property.
Yeah, they take the property.
They can take it. T hat’s in a way a foreclosure.
That’s what happened. I don’t know if it actually becomes a property of the state, but basically it becomes the right of the state to sell it and collect whatever they can get for that property. I’ve seen that, especially with some vacant land around the state where it has very low value and people just maybe even forgot that they owned it. We see that once in a while.
We see a lot of people that die that don’t have relatives to take it. They don’t even have an estate or a will that says, I’ll donate it to a charity, nothing like that. It just sits there. We don’t know necessarily that they’ve passed. There’s nobody to notify us. There’s no family member. We just have to dig around in the legals and the obituaries a lot of times to find out. And that’s the assessor, again, that’s trying to locate that owner. Interesting. The other thing we have, though, that’s really I really want to talk to people about is, and you started to tell me much on it, and I was like, I want to say, is those people that don’t have mortgages, they’ve already paid, but they still have to pay taxes. We have a great program for people that are on fixed incomes that just need help. They always used to have a mortgage and that’s how they managed it. They need help in managing that process. What we say is, okay, let’s divide it out. And especially if you’re on a fixed income, you’re an elderly person, you’re only living on social security, maybe a little IRA money.
But it’s called the Monthly Payment Program.
Got it.
And we take the estimated taxes from your notice of value, spread it out over 10 months. Well, actually, we spread it over nine months because it’s an estimate. And then that 10th month, we true up what you owe for that. So 10 payments is much more manageable.
Yeah. So you help them get them on a payment plan. That makes so much sense.
We send them coupons and say, just like your tax bill, there’s a coupon or the mortgage, just drop it in there every month. Mail it, come down to us, drop it in a Dropbox. Those kinds of things go online and pay it. And that we found is very, very helpful. We have probably over 4,500 people on it.
That brings up a question. Do you know offhand how many properties you have to collect property taxes on?
Yes. We sent out just over 261,000 tax bills. Now, that’s the universe. That’s nonresidential and residential. That’s everybody. With that, we are the largest county that sends out the most properties.
Wow.
That’s what we have to.
Collect on. I just want to remind people we’re talking to Treasure Bearce. Bearce, I said it wrong. I know. You probably get that a lot. You can say.
Treasurer Nancy if you want.
Treasure Nancy from Bernalillo County. Glad to have her here. We’re going to wrap up here really quick. I want to talk about scams. I guess just like everywhere where there’s money involved, there’s going to be scams. What things should people be on the lookout for?
Gosh, definitely look for those emails that just pop up to you offering you a great deal. Or the one that we’ve most seen is mortgage insurance or even property tax insurance, title insurance.
Property tax insurance?
Yeah, I don’t get it either. But just very odd things. Again, if it’s an email that you don’t recognize, don’t answer it, delete it, or call the police and report that you’ve got something here that you don’t understand and don’t think. Call our office. We’re up to date on our scams as well.
If people want to get more engaged with what the county treasurer does, I guess what I’m looking for is what type of transparency is there from the county if somebody wants to know what’s going on with the finances in the county? What can people do?
Oh, wow. A lot. Come out to our quarterly board of finance meeting, and I report out everything, the operations, because we average 10,000 calls every month. Oh, my gosh. We’re a very busy department.
Probably this time of year, too. And especially this time of year.
I report out on the investments, how we’re doing on that. I have an investment advisor who’s little bit also there to talk, providing economic forecasting, what’s going on. T hat’s clearly important right now. It’s the full package. The other thing is I do have an advisory investment committee and on that committee, there is one public person that’s on, a community person. It’s filled right now, I’m sorry, but that’s always there if you really have a burning desire.
The point is the transparency is there.
Transparency is there. We have a transparency portal. I have performance measures I have to meet. Also, we have an internal audit every year. We’re one of the departments that has it every year. T hen we have a full blown audit, I think, every two years. We put that on our transparency portal. We also put it on ours, the burnco.gov/treasurer. You do have to hunt around for it, but if you don’t want to do that, just call me, 468-7031.
You got that? There you go. There it is.
Yeah, we want to talk to you.
Just to wrap this up, you’ve been doing this now for a few years. What do you find most satisfying of this role now that you’ve been in for a few years as being the the county treasure?
For me, it’s the education piece. Like you said, lots of people don’t know what I do, and we do a lot. Being the banker, collecting, dispersing, investing, it’s like peeling an onion. And you just all those things all have procedures and processes. I love going out and meeting people. I do introduce myself always as the least favorite elected official. I might be tied with the sheriff. I don’t know.
You might have some competition out there. I’ll just say anyway.
But yeah, when they see me, they’re like, Oh, no, the tax collector. I’m like, But I’m here to help. I have the information that can help you. Let me tell you about it. You can also email me treasurer@Bernco.Gov. And yes, you will get me when you email me. I answer all the emails. That’s great. So engage. That’s what I want.
Well, I appreciate what you do. I know public service is a calling for a lot of people because it’s probably… Well, I think the reality is there’s probably more financial rewarding type career path for some, but we really appreciate what you do. I really appreciate you reaching out to me and having the opportunity to talk to you about this has been super educational for me. I hope for people listening, what the treasure does, and I’m sure it’s very similar around all counties in a certain way, especially in the state, because you said it is by state statute, a lot of the stuff that you are required to do, correct? Correct.
Whether you’re Lee County or Taos County, we all have the same 40 or 50 state statutes that we have to apply equitably to everyone.
Again, if somebody wants to get a hold of the Bernalillo County treasure, it’s Bernco.Gov/treasurer or just Google it. Again, if they want to reach out to you, how can they connect with your office? What’s the phone number? I guess would be.
The best one. 505-468-7031 or email me treasurer@Bernco.Gov.
Treasurer Nancy, thank you so much. I really appreciate it.
Thank you so much. Have me.
Back, please. I’d love to. No, that’d be great. We only.
Scratch the surface.
I know. But you know what we could do some time. You know what’d be interesting is to get you, the clerk, and the assessor together and maybe do some event with the realtor community, which I’m very engaged with because I think it would be super helpful. I’m in.
Yeah.
Great. All right. Thanks, everybody. Have a great weekend.
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Welcome To Albuquerque Real Estate Talk, the go to radio show for all things real estate in the heart of New Mexico. I’m your host, Tracy Venturi, and alongside me is my fantastic co host, Tego Venturi. We’re with Venturi Realty Group of Reel Broker, and we’re coming to you this week, Tego, on show 441.
Wow, that was a beautiful script you just had there. I love that.
Yeah, we’ve been coming to you for nine years on KIVA Radio at 1600 AM.
If I’m fantastic, you’re fabulous. The fabulous Tracy Venturi.
Thank you, Tego. So together, we’re your guides in all things real estate for here in central New Mexico. Whether you’re a first time buyer or a seasoned investor, just curious about the market, we have got you covered. So sit back, relax. Let’s dive into the latest news right here on KIVA 1600 AM and also on Facebook, YouTube, all of those online things. Be sure to give us a like or follow and let us know what else you want to know about Albuquerque Real Estate. Tego, what’s on store for.
Today’s show? What’s on store for today? Well, we just got the March data on the Albuquerque housing market. We can talk about that. There’s some national news just relating to the health of the housing market and what’s going on there. We had a question that came up this week. What’s up with septics and septic inspections when a property sells? We wanted to talk about that subject. I almost used another word in there, but I’m not going to do it. Good. I’m not going to do it. Let’s see, what else, Tracy? Property taxes. Property taxes. It’s that time of year. We wanted to talk about that. In fact, we got a call from the Bernalillo County Treasurer who wanted us to make sure we talked about it on the show, and we appreciate Nancy Bears. Yeah, Bears. I had to think of her name for a second. The Bernalillo County Treasurer. Let’s just start off there, Tracy, with property taxes because it is time for second half. Is that right?
Sure. As most of our listeners probably know, if you own property and you pay property tax, the taxes are paid in arrears here. So right now, we have not paid for the second half of 2022. Those are due April 10th. So right now…
Let’s see, it is April…
Actually, they’re due, but they’re not late till May 10th.
Got it. Is that what it is? Okay.
After May 10th, they’re delinquent, subject to interest and penalties. Now they’re due, but you do have a little leeway there, so it’s time to pay those. So if you have a mortgage on your property, chances are pretty high that your lender is paying your property taxes for you. They’ve been collecting escrows all along with every one of your mortgage payments. And when they’re due, they make that payment for you. If you own properties cash, free and clear type properties, you have to remember that you got payment coupons a long time ago, probably, that you use to make your payments twice a year. Some people, obviously, when they’re in cash, they just pay it once a year, which is fine. You can prepay before it’s due. But it’s one of those things where sometimes you forget about it. So if that’s you. And there are some folks with mortgages who pay their own property taxes. And if you do that, I’m sure you know that because you had to set it up that way. Or the way your loan was set up, you know that those escrows aren’t being collected for you. So there’s lots of ways to pay your property taxes.
You can get online and the website is out there on Bernalillo County Treasurer’s office.
Let me make a side note about that because, gosh, I guess it’s been about a year, maybe over a year now, that both Bernalillo County and Sandoval County, because I have some properties I need to pay taxes on in both the counties, they upgraded their websites so that it’s a much nicer, more modern dashboard for keeping track of property. Some of us that own multiple properties, it’s a nice dashboard. We can see all the properties you own, what property taxes have been paid, and which ones have not been paid. So set that up and get a login for that. It makes your life a whole lot easier.
Sounds great, Tego. So it’s not just Bernalillo County, right? We’ve got Sandoval, Valencia, Santa Fe counties all within our metro area here. Depending on the best way to pay those taxes. But I’ve seen that site you’re talking about, it’s pretty awesome the way you can just load them all in there and you can pay right from there, right? Yeah, it’s great. There’s also the ability to pay them in person at Rio Grande Credit Union, but otherwise it’s checks and they want you to put the property information on the check. So of course, they can affiliate it with the right property, something like that. So if you have any questions about that, we’d be happy to help 448 888 is our phone number and happy.
To help you with that. We get the lead off the show with exciting things that telling people that their bills are due.
Well, let’s talk about another thing that’s happened right now. We’re getting… Same thing, right? The notice of values.
Yeah, the assessed values.
Assessed values. The notice of values just went out. Those are not tax bills. A lot of people get confused. They get this from assessed values from the assessor’s office and they think it’s a tax bill. That’s the notice right now that says this is how much we think your house or your property is worth that will result in a tax bill later this year based on these values. Right now, there’s very firm deadlines of when you would need to protest those assessed values. If you want to protest them, if you look at it, actually open that mail and look at the assessed value and go, Wait, my house isn’t worth that much, or My property, the neighbor just sold and theirs was less or whatever.
Yeah. One thing just to keep in mind on that, if you’ve been in the property and you haven’t moved, there’s a 3 % cap on that. But if you just purchased a property and when it transfers ownership, the assessor, which is different than the treasure, they’re going to reassess the value of the property when ownership changes. That’s when people usually get that big sticker shock on their tax bill because something that hasn’t been assessed at a higher value suddenly sells, especially after the last three years where we’ve had, let’s say, 30, maybe even 40 % home price appreciation in the Albuquerque area. Just be aware of that. Usually, though, and Tracy, we should talk about this because there is a statute in New Mexico when we as realtors help somebody purchase a home, we are required to provide them what the future tax bill could be.
Just.
So they understand that what they’re seeing right now as the property taxes for something they’re buying is not what the future is because that 3 % cap on an increase in your taxes for property taxes is only if you don’t sell the property. If you stay in it long term, it’s 3 % a year. But if it sells, they can assess it at the new value.
Okay, let me give some good news on taxes because all we’re talking about… Oh, I.
Interrupted you. I just wanted to say, if you need help with protesting, there’s information on the notice of value of how to do that. But if you think your property really needs extra help, there’s companies that can help you do that. I know Scott Clark’s Double Eagle Property Tax Consultation is one company is really well known around here to help people protest.
Property tax. The big place that comes in is commercial properties because that can be huge. Obviously, residential properties, which is our world, but commercial properties can make a huge difference.
But a big jump for residential can be huge for people, too. Anyway, that’s out there. Just want to mention it.
What did I start to say?
Something else about good news on taxes.
Good news on taxes. I was looking at one of the guys I follow that’s a housing economist. He actually happens to be in Texas. Just looking at what Texas tax bills and property taxes are much higher than New Mexico. Granted, Texas doesn’t have income tax, so it… But anyway, just interesting how high property taxes are in Texas versus New Mexico. T hat’s something people coming from Texas are like, Wow, it’s a lot cheaper.
Houses are more expensive oftentimes, though, here than many parts of Texas.
Obviously, it depends. It really.
Depends on where it is. If you’re Austin versus rural Texas.
Yeah. Austin is very different. Austin is the San Francisco from a housing economy standpoint compared to the rest of the country. Tracy, I wanted to talk about rental properties because I saw an interesting story about who owns most of the rental properties in the country. I thought that was interesting. But then it brought me back to this idea that last week we had one of our properties that we own and we put it for rent. Oh, my gosh, the frenzy of people that are looking for good rental properties right now, there is definitely a shortage of rental properties, especially… Well, I don’t know this for sure, but it definitely seemed like it when you’re talking about single family detached homes in a neighborhood. There’s not much out there. Rental prices have gone up substantially. I went and pulled this up because obviously there’s a lot of people talking about cost of housing in general and that home prices have gone up, like I said, maybe 35 %, 40 % over the last three or four years. Combined. Yeah, combined over that. A two bedroom in the Greater Albuquerque area now is, what they’re saying, median rent is about $1,400 for a two bedroom.
That’s a 24 % increase in a year. Wow. Now, if you look at a three bedroom, it’s not that much of an increase, but it’s about 12 % increase. This is from Zumpier, which is one of those rental listing websites and they track all this data. A three bedroom now, median rent is $2,000 a month. I remember when we were purchasing rental properties, maybe five years ago, a three bedroom house, $12,000, $1300 a month. Now, a three bedroom house, just your average three bedroom, two bath, two car garage house in many parts of town. Many parts of town. I mean, 1900, 2000 is like the minimum going rent now for a three bedroom house.
So eah, well, we’re not experts on apartments, but we do know some of the apartments around are that much for an apartment versus a single family home.
I think that’s the big story in real estate is just cost of housing in general. People talk about how much home prices have gone up and people are getting priced out and mortgage rates went up. But it’s the same in the rental market, too. And that’s the only correlation I want to bring into this conversation is it’s not just buying, it’s also renting that’s gone up substantially. And unfortunately for a lot of folks, you need to live somewhere. Anyway, just wanted to bring that one up.
Good. So March, I know my Statomatic Tego, my Statomatic. I’m sure you want to share some of the March data with us now that we’re into April.
I did a video. It’s on YouTube. It’s on… Of course, I put it on course, I put it on Facebook, too, and you can find it. Again, it’s the Tego Venturi or Venturi group. You can search us or Venturi Realty group in Albuquerque. You’ll find it. It’s out there. And I did a March update. I looked at the data that just came in for March for the Albuquerque MLS. A couple of things that continue, I guess, as a trend is low supply, just not very many homes on the market, not very many people listing their homes for sale. This time of year, right now, on a seasonal basis is when we generally see the biggest surge of people putting their homes on the market. We’ve got a few more weeks here before that really kicks in. Usually, it’s mid to late April is when we see a big surge.
Well, and usually it’s a lot warmer by now. And when it starts warming up, it seems like the real estate market heats up. And so our houses coming on the market seems to be following a little bit of the cool weather we’ve been having.
Yeah.
But it’s else. That’s my nonstatistical input to your story.
Yeah. And I think obviously the school year has a lot to do with that, too. Definitely has a lot to do with that. So yeah, just low number of homes on the market. Every week, we’re seeing about, let’s say, 250 to 300 homes come on the market and about 250 to 300 homes to go off the market. So we’re just keeping this even level of number of homes on the market. It’s not going up, it’s not going down. You have a better sense of this than I is, you’re seeing the number of people that are reaching out to us saying, Hey, I’m looking for a home. You’re seeing that. That’s what you do. That’s what you’re watching. That’s what you’re doing is helping our people on our team help these people that are looking for homes. The flow of that has increased, right?
It has, yeah. We’ve got plenty of people are looking for homes, yes.
There’s no shortage of that.
There’s not a shortage of home buyers.
There’s definitely a shortage of home sellers. Homes on… Would you say there’s shortage of home sellers or it’s just more limited than normally what we would see in Albuquerque?
I think that’s the same. Both of those options.
Well, no, no, no. Okay, yeah, I hear you. Okay, all right. I accept that. I accept your opinion. You’re so funny. We’re married. Okay, so anyway, so that’s the big thing. Then the other thing is home prices. I went into this a little in depth on the video I did, and you can look at it. I’m showing you the charts and what’s happened. I’ve been seeing this all year. Home prices peaked in May June. They pulled back all the way through December, and then they started to go back up. When I say pulled back, it’s a couple 3 % just depending. It wasn’t this huge move. It’s quite common that we see home prices peak in the late spring, early summer, and then just be flat or pull back slightly through the winter. This year, it was a little bit more pronounced than years past. I’m 100 % sure that has to do with the interest rate issue that we had last year, where we went from 3 %, 4 % at the beginning of the year to 7 % at one point. Just on a side note, we pulled back a little bit. We’re in the low to mid 6 s right now.
Not great, but better than it was.
I’m sorry, but I still think 6 s is great. I don’t think we should tell people it’s not. I think about my 20 year career in real estate so far, and 6 s . Back when I first got in real estate in the early 2000s, it was seven, seven and a half for probably my first seven years in real estate. So it’s still pretty darn good. Cheap money, really, when you think about it, especially when you look at the rental information that you just brought up. When you think about how much it costs to rent, you might as well be paying down your own mortgage for the same amount of money. If you’re going to be paying 2,000 a month for rent, you might as well be buying a home.
Anyway. 100 % agree. Of course, we’re a little bit biased, but we’re real estate investors. We believe in it. I think it’s an asset class that everybody should be participating in.
You can say we’re biased, but, Tego, we really believe in home ownership, not for us, but for the people, for clients, for the public, for the world. It’s not we want to sell a house. It’s for the joy and the satisfaction we get helping somebody with home ownership.
I saw a chart and I don’t have it in front of me, but it was a stat talking about how much net worth… Let me rephrase that. Of people’s net worth, how much of it is their real estate? Needless to say, most of people that have some substantial net worth or any net worth, basically they’re not in debt upside down. It’s their real estate. It’s their.
Real estate. It’s a huge percentage.
It’s a huge percentage. It’s a higher percentage on the lower income bracket than the higher income bracket because people in the higher income have the ability to diversify more and buy stocks and other types of assets.
But they still have a substantial portion of wealth through real estate, typically. Oh, of course. Even though they’re more diversified.
Yeah, absolutely. This actually, I’m going to backtrack a little bit because I forgot to mention the story because I found it interesting, but it ties in with this whole idea of a lot of Americans have a lot of their net worth in real estate and have done very well with it. There was a survey that the National Association of Realtors did, and what they were doing was looking at the rental properties in the country. What they said is there’s almost, well, it’s 49.5 million, let’s say, 50 million rental housing units in the United States. Nearly 46 % of them are small rental properties. So one to four units. Those are the small.
We’re not talking a huge apartment complex.
Yeah, we’re not talking the big apartment.
50 % of them are small.
Okay. Of those, let’s say 25 million, give or take properties that are the small, one to four units, 70 % of them are owned by individuals, not big companies. I bet it’s even higher than that because so many individuals have a LLC or a Corporation that they affiliate them through. There’s been a lot of conversation in the last two years about all these hedge funds and Wall Street money buying up all the houses. T hey’re buying the houses and renting them. T hat is happening. There’s no doubt about it because these big investment firms are saying, Hey, that’s a great asset class to own, and they’re wanting to buy real estate. T hey’re some of the smartest people when it comes to managing money and they like real estate too. But the highest percentage of rental properties are owned by the mom and pops, basically.
Right. And we know that locally. Well, we have a lot of friends who own a fourplex or a duplex or just small rental properties, and that’s part of their strategy and they love it.
And that goes back to this conversation about the lack of new homes coming on the market. People aren’t listing their homes for sale as much. I think somebody that looks at the numbers and crunches the number, they bought a home, let’s say, five years ago and they need to move, but they don’t necessarily need to sell to buy the next house or do their move. They’re looking at renting it instead of reselling it because when you crunch numbers and there’s a lot of different things to look at when you’re evaluating if a property cash flows and it’s going to have good internal rate of return over time, a lot of people are choosing to just rent their properties instead of selling it.
Because.
I go back to the whole conversation, the rental market is very strong in Albuquerque right now, without a doubt. Tracy, let’s talk about this crappy subject. Okay, I got to do it. I had to do the joke. I couldn’t let it go.
This is a septic discussion. I thought we were going to do things on this show because it’s Easter week, it’s Passover week, and we were going to do things like, let’s hipity hopity into homes this week, or bunny something or other.
No, we’re going to talk about septic tanks.
But we’re going to talk septic tanks. Property Evaluations evaluations of September tanks? Let me.
Set this up.
Okay.
Question came up this week, property selling, and the buyer says, I don’t want a septic inspection. Well, I don’t want to get in the weeds on that, but there is a rule, a statute. I don’t even know if it’s actually a law or just a statute or what it is, but the state environmental department does have regulations on what needs to happen if a property has a septic tank when it transfers ownership.
Prior to the transfer of a property which has an existing onsite liquid waste system, the current system owner must have the system inspected and evaluated by a third party inspector, as described, utilizing a department approved form. It doesn’t really state who?
It has to be a licensed inspector, correct. They have to be licensed to do that evaluation. Yeah.
It’s got to be certified by the national… There’s a New Mexico certification or a national certification is the way it looks. So yes, we are required upon sale, to have a septic system inspected and it should be properly permitted and be working properly. And septic systems vary. There’s several different types. There’s the system that’s pretty low tech.
It’s basically a big tank.
Big tank with an overflow for liquids to flow off into a drain field. And when they inspect that, they inspect both parts of that. So sometimes the tank can be fine, but the drain field isn’t draining. Or the other way around. The drain field is working, but the tank is broken, cracked, the concrete’s whatever. Usually when we see it unearthed and the lid has a bunch of vines coming out of it, we know it’s probably not a valid working tank. Yeah, if.
There’s something growing inside there, that means there’s a crack. Or if the water is basically the liquid is very low, that means it’s probably leaking.
Then there’s the engineered system, which is better for a rocky area, the side of a mountain, or in granite, or bouldery area.
Well, yeah, the advanced treatment system is almost like a mini water treatment plant. They’re a lot more expensive, but basically your water coming out of that, the liquid coming out of that is in much better condition and you don’t need as much space. That’s really the big benefit. You don’t need as much room to do it. So if you are a home seller and you have a septic system, would you advise that they get that inspected before they put it on the market? What’s your thought there?
Personally, what I would do is I would start right away getting it on the schedule to be inspected because we know that the regs for septic inspections changed a few years ago. They’re pretty stiff. A lot of them are failing, older tanks are failing. Even not that old of a tank is failing because of the new regulations and they have to open up both ends of the tank or whatever, depending on the type of tank. And it can take quite a while to get on somebody’s schedule to.
Replace it. We need Sean Benavidez with your grand septic here with us to give us all that.
Well, I’ve been to a lot of inspection.
There’s a lot of good people that are real experts in this. But one thing interesting, just this week, Tracy, we had to get a septic inspection scheduled in the East Mountains, and we couldn’t find anybody. Everybody was two weeks out. That’s the other thing. So if you have a property and you’re getting ready to sell it or you’re just putting it on the market, I agree with you. I would say get that inspection started earlier than later. You’re going to have to do it anyway. We have seen a lot of deals, let’s just say it, fall through because of it, because it got put aside. And then during the due diligence period, you finally get the inspection done and realize there are some issues and the seller really hadn’t considered that additional cost. Getting it done up front is going to put you ahead. Now, the other thing, Tracy, is there’s a timeline. Once that inspection is done, it’s only good for a certain amount of time, right? Yes.
I was looking for that in my notes here. I think it’s 180 days, which is six months.
That’s what I remember as well, six months.
If your house isn’t going to sell quickly, it’ll have to be reinspected if you get it inspected and it’s more than 180 days from that date. Or you can provide, if you had to put a new one in, you can provide that information. There’s databases you can look up. We have found that here and there, the septic tanks don’t have a license. They aren’t registered. They need to have a permit versus a license. It’s a permit. There’s databases at the New Mexico Environmental Department to look up permits, and we work really hard to help the septic companies, our clients find those permits because sometimes the legal is there and not the address or the ad.
Another story just in this last week where Trish who handles our transaction and all those crazy details that have to happen during the contract to close period. There was a septic system in this property. They couldn’t find it. They couldn’t find it. They couldn’t.
Find the permit online.
They couldn’t find the permit. They knew that it was done, but they couldn’t find it. Anyway, long story short, it was on a different name. The naming never got transferred when it was sold before.
It had the wrong property address on it.
That’s what it was, wrong property address. If you get that stuff done ahead of time, it’s just going to put you that much further.
Ahead when you’re selling. There’s enough moving parts in selling your home. You have a septic system that getting this taken care of timely on your timeline, less stress involved at that.
Well, there’s a lot going on if you’re getting ready to sell your home. We know that. This is just one of those things that you can maybe just overlook because you got a thousand other things that you’re trying to do to get the home ready to sell. And a.
Lot of times if you have a septic tank, you might also have a well, which is another thing. Wells get inspected. Usually buyers want them inspected. There’s not a state regulation, but we suggest to home buyers that they get the water tested in addition to the well equipment to make sure that there’s no bacteria, E. Coli or Coloform or other things. I guess some people do lead even testing, making sure that the water to drink is safe.
That’s a.
Whole another topic.
That’s a whole another topic, but it’s a good one. Tracy, it’s time to wrap up. It’s already been a half hour. We’ve been talking and talking and talking and covered a lot there. But this is Albuquerque Real Estate Talk.
This is what we do. We’re on KIVA, 1600 AM. We come every week with our banter back and forth, and we love it because this is what we do anyway.
Yeah. If you tune in, you’re listening to us and you’re… Give us a like, give us a share, or subscribe on YouTube to help boost message and get good information about there for homeowners and home buyers and home sellers.
And if you want to buy a house with us, sell a house with us, give us a call at 448-8888, and we’ll get you well taken care of with our great team. And if you’re.
Interested in careers in real estate, we can talk about that, too. Absolutely. We have some opportunities there for people that are interested and even people that are experienced real estate agents would love to talk to you about what we can do there.
So have a hippity hoppity Easter and we’ll see you next week. All right.
Thanks, Tracy. Again, Venturi Realty Group with Reel Broker. We’re at 505- 448-8hippity-hoppity888. Have a great Easter weekend. Take care.
Let’s take a look at the Albuquerque housing market data that just came in for March 2023. It is the first week of April in 2023 this is Tego Venturi with the Venturi Group of Real Broker in Albuquerque, New Mexico. Been looking at this housing market data for years. Let me show you what I am seeing here. We are going to look at everything that happened in March. First and foremost, we’re going to look at median sale price. By the way, this is single family detached homes in the entire Albuquerque area. So median sale price, basically 336,000. Interesting piece to that is that is a 4.7 % increase over March of last year. Now, median price, we get a lot of variation throughout the year because more larger homes sell generally in the spring, early summer, and not so much in the winter. So we do see pullbacks. Now, we did have an unusual fallback in median price this winter. A lot of that had to do with the high mortgage rates that we saw, especially starting in September, October. Now, we look at it from a price per square foot standpoint, it tells us a little bit different picture because price per square foot takes out that larger, smaller house of variable a little bit, not 100 %, but it does take it out quite a bit more.
If we’re looking at Albuquerque, again, Greater Albuquerque area, 5.5 % increase in price per square foot from March of last year. So 193 March this year, and that’s exactly what it was in May June of last year, which were our price peaks. So we do seem to be on this year over year price appreciation path, and it doesn’t seem to be slowing down at this point. I’ve got some other data that I could give you to point that out, but we’re not going to get into that right now. It’s actually the list price data which continues to increase. I think one of the big stories that really needs to be highlighted is the number of homes on the market, not just total number of homes, but actual number of homes are getting listed for sale continues to be down 18 % from last year, which was down from the year before, which was down from the year before. And if I do this on a 12 month rolling chart, it really highlights this. People just aren’t selling their homes as often. They’re staying in their homes longer. And so we continue to see that trend here.
And I expect this trend to continue. People that are in those 3, 4, even 5 % mortgages are going to be a little bit hesitant to jump into a 6, 6.5 %, 7 % mortgage. Although mortgages are in a little better place right now, mid to low 6 s right now. Closed sales down. Again, this is the 12 month, let me do the monthly. We have this two different things going on when you talk about the housing markets. Home prices are healthy and continue to go up. Now, if you’re a home buyer, you’re going to say, Well, that’s not so great. But for homeowners and people that are building equity in their homes, it’s great news. But the number of home selling has declined. I’ve heard housing economists call it a housing recession, meaning we’re just not seeing as many homes selling on a year over year basis as we have in the past. And you can see from March of this year to March of last year is down 26 %. And if we do it on a rolling 12 month, it’s down 23 %. So that’s the lowest we’ve seen in a long time the number of homes actually selling.
We had that big peak back in 2021. So yes, the number of home selling is down, supply is down, demand is slower but not out. Let’s look at a couple of demand numbers here. Pending sales down from last year, down 16 %, so not great. But there’s 864 homes that went under contract and people that put homes under contract in March of 23 in the Albuquerque area. Then the other one I’d like to look at is the step before the pending and that is foot traffic. This is number of showings per home that’s on the market. We’re at 8.2 this month, just about the same as last month, but that is up from the low numbers we had during the winter, which is common. It always slows down during the winter. But you can see it’s way down from last year. Last year, in fact, last March, was peak frenzy. We’re not seeing that this year, but it’s very steady. The biggest challenge we see for home buyers right now is just limited choices. They’re, in many cases having to compete. The good homes are still seeing multiple offers, especially depending on price point as well.
But again, that’s not across the board. We’re seeing million dollar homes getting multiple offers as well. It really depends. You need a good real estate professional to help you navigate this real estate market. So if we can help, that’s what we do. We’re the Venturi Group with Real Broker. You can reach us at 505-448-8888. Thanks for watching. Give me a shout if you ever have any questions about the Real Estate Market in Albuquerque. Take care.
