Tego: One of the questions we get a lot, and I get a lot is, are we seeing 2008 all over again? Are we going to see a housing crash again? And the, and I would say the the answer is a, is a very strong, no, it’s, it’s not the same. And you said something that, that was, it was a great example of how this is different, or just one of the many examples, how this is different back in 2008, 09, 10, when we were, we’re dealing with all those short sales meaning people that had to, uh, get their home sold and have the bank take short with the, with the lender was owed on the home, the lenders weren’t in a really well working with people, they were just saying, sorry, you didn’t pay your mortgage. You know, foreclosure this time. It’s very different. There’s these forbearance programs that are available. You know, if you’re in a mortgage and you have an issue, and you’re not able to make your mortgages for financial reasons, you need to reach out to your loan servicer, and your loan servicer is basically the person you’re paying your mortgage to. Right. Right. And there’s a bunch of freedom mortgage bank of, you know, all the banks and everything and, and just reach out to them and say, Hey, I need some help here. I’ve found, you know, going on the different websites, every one of those, you know, big national mortgage servicers, they have something right on their home page or their website need help reach out here. That is very different than what was happening in 2008 and nine. So there’s a lot of workout options as they call it for people that, that, uh, aren’t able to continue in making their mortgage. Right. So, so just remember, help us available and the other thing, Tracy is we’re so different than 2008, 09, 10, because people have equity in their homes this time around way more equity in their homes. And so there’s that other option, which is sell the home, but not as a distress sale, not as a foreclosure where you give it back to the bank and have that on your credit history, ruining your credit. Um, you know, I read something the other day I was reading some stats on, you know, what’s been happening with the forbearance programs since the beginning of the pandemic. And there was a bunch back in March, April, um, right now about 50% of the people that entered those programs are now off that those programs either they’ve exited the programs, meaning they’ve started to make up their payments, they’ve refinanced and started making their payments, or they paid off the loan, which means they probably sold the home. So, you know, a good 50% of the people are in those programs have come out of those programs. So that’s a good sign going forward. The reality is we still have about, I think the, uh, and, and I, I apologize. I think the number is about 3,000,000 people in the country that are still in some form of delinquency on their mortgage. Uh, and just remember, I’m say this again is delinquency does not equal foreclosure delinquency just means people are not making their payments. That doesn’t mean it automatically equates to the home going into foreclosure. Right. Right. And, and I keep seeing that being reported as the, that one equals the other. And it just, it’s just not the case because there are so many options for, for people.
Tracy: Perfect. So new topic. Yes. So, um, we, we were talking, you know, with Eddie a while ago about what our year has been like in real estate here locally. We want to talk about trends for 2021, but let’s talk locally. We have a hard time talking about our team ourselves, right. It’s always nice when someone else gives you kudos and says, Hey, good job, guys. Um, we, during these difficult times, and it has been a difficult year for our industry and every other industry and people everywhere with the COVID situation, but we’ve been able to serve over 500 people with home buying, home selling, or investing in real estate. And we have seen quite a few investors this year. Um, so we’ve helped over 500 families this year, which is just really awesome. I don’t know that anyone, any real estate team in New Mexico, has done that before. And that’s with the COVID, um, issues that we’ve had and how difficult it’s been. And, you know, we really want to congratulate all our buyers and sellers who have moved forward and taken care of their housing needs, despite the situation right.
Tego: Taken advantage of this kind of historic time and in real estate right now with the ultra low interest rates, the strong, you know, buyer demand, meaning sellers, market, and people, you know, with the ability to lock in these low interest rates in their housing costs for a lot, a lot of time. One of the things we’ve seen that, that I think some people were predicting it back in March, but the demand for a home in having, you know, a home has really gone up this this year, because people are recognizing how important it is to have that place, to have that place. And, you know, we’re so thrilled that we’ve been able to help people do that.
Tracy: Right. So one of the things I really want to say too, is how proud I am of all of our team members who have gone above and beyond, and really, you know, gone out used precautions, but gone out and helped people buy and sell homes. When, you know, we were deemed essential and we were out there before we really even knew how they were treating COVID and how people were recovering from COVID. And, and, you know, they’ve, they’ve done their part because they care and they’re, they’re helping people, um, you know, really of our team for that. It’s awesome
Tego: And it’s been, it’s been different, not, you know, in the office, not in the office, not in the office, working from home, you know, everybody’s been dealing with it just like we have. I mean, we’re, we’re, we are, you know, one of the, one of the lucky industries, in fact, we’re probably, you know, one of the luckiest industries right now, the real estate residential real estate, because it’s been the strongest sector of the economy. And so we’re, we’re blessed to be, to be part of it. And I know a lot of industries are really suffering and, um,
Tracy: Well, think about what we talk about regularly, every once in a while on this show about how our industry supports so many other people, right? So our industry has supported the, the movers in town. You know, we’ve got Max over at relonm and I’m right with, uh, Bekins. We’ve got, um, all the, all of our inspectors, whether it’s septic or sewer lines or home inspections or roof inspections, we’ve got all those contractors that do work for people to get their home ready for sale or sold or repairs. Right. Just, I mean, it goes so deep, our lenders, our Title people it’s, um, it’s really important for our economy, the housing industry. So it’s a, it’s an important thing. Um, so talking about 20, 21 trends in real estate in 2021, Tego, you and I have had a lot of discussion about this this past couple of weeks,
Tego: Of course. So trends, let me let me kind of cue this up. So trends that we’ve been seeing coming now and, and going into 2021, obviously there’s been some big changes in real estate world, how people use their homes and some of the things that have been going on, you know, you can kind of, I think a lot of people realize that you can throw the rule book out on so many things this year, and that’s true in a residential real estate market. And so I wanted to go through some of the things that have that, that are, that have happened and, and look to continue to happen. And one of them is the remodel, boom, right? We were just talking about this, this whole idea, how the real estate economy, the residential real estate world, when, when homes sell, there’s either the fix up before sale or the fix up after the sale or the, you know, the people deciding that they’re going to stay in their home and getting it ready for them to, you know, be more work at home. And I’m going to get into that, that stat in a moment.
Tracy: Think about us Tego we were home. We went, well, the office is closed. We’re home, let’s remodel the kitchen. Right. We did a big remodel in our kitchen and then our office was closed. So we took advantage of nobody being here. And we did a big remodel on our office as well. And we know so many others have done the same thing. It’s like, okay, I’m here more, I’m homeschooling kids. I’m working from home. I need to recreate my space and how I live. And, and we’ve seen it.
Tego: One of the big things that’s going to affect the real estate market in 2021 is the number of homes on the market or lack thereof. I mean, that’s, that’s the challenge right now is we have historically low, like, I mean, like all time, low number of homes on the market. And, you know, there’s this expression out there in the real estate economy or real estate economists who it’s called the lost decade. And that was from about eight, nine, the homeless in 2008, 2009, the home had just stopped a building. And I mean, I say stopped, you know what I mean? It, it, it went from a thousand to, you know, 10, right? And, and what’s happened now is we haven’t had a lot of new homes coming out in the market. However, the household formation the population, the number of people that want a home own homes has continued on. And what’s happened with the Corona virus thing in these low mortgage rates is people that are maybe first time home buyers have jumped up, right? We’ve, we’ve pulled some of those future home buyers into the market this year. And that’s part of, of the, the reason that the supply is so low. Another reason is the older generation, the boomers just saying, yeah, we can say, we can say, okay, boomers, that’s us. Um, they’re not, I mean, when we’re talking to older boomers, but they’re not moving. I mean, think about who, who is anybody know anybody that’s moved into an assisted care facility in the last six months.
Tracy: Yeah. It’s a tough time to be moving into an assisted living type place. But, you know, there are some that are moving into the active adult places.
Tego: That’s true, but that’s different. Right. I’m talking in, in one of the stats that I read is that the home in-home care services, that business is booming right now,
Tracy: Right. People are choosing in-home care over moving to an assisted living place where you’re piled in together. Right.
Tego: Well, and what that means is those homes are not coming on the market. Right. And they, in, in normal times, those homes would have been coming on the market. Right.
Tracy: We’re missing all those homes for people that haven’t moved to assisted living.
Tego: Yeah. The couple other kind of buzz words that have come out this year, one of them is called zoom towns. And Tracy, you have, we talked about that zoom tacks, zoom towns, and that’s, uh, a good example would be Boise, Idaho, or, or, you know, or some of those towns. Um, what was the other one? Um, anyway, yeah, it’s Spokane w where people that are in these really expensive markets, Silicon Valley, Seattle, Portland, you know, um, San Francisco, the, the expense of, you know, Los Angeles, really high price markets. They can now basically work from anywhere in zoom, into their businesses, zoom into their meetings. So they’re calling them zoom towns. So, so people are selling the expensive home, or they’re keeping the expensive condo in San Francisco and buying a home in, and again, Boise and our Tahoe. And now they’re now it’s the other term, which is called primary co co or coal primary home. Yeah. Yeah.
Tracy: Oh, primary home. So they’ve got two primary residences. It’s not a vacation or second home now that they get to occasionally, it’s two primary homes. And you know, what we’re seeing Tego is they’re saying
Tego: That doesn’t help the inventory situation either.
Tracy: They’re taking up two homes instead of one. Um, but one of the things we’re seeing with that is they’re set up to work from home at both locations, they have the full desktop, double screens at their co-primary home. And then in addition to their primary residence that they had before, right. So it’s people who may not have even had second homes before or vacation homes, but now they have two primary residences.
Tego: Yeah. Yeah. Cool. Primary residence is zoom town. Yeah. Yeah. So work from home, needless to say, work from home is a thing. Um, we went from, let me get the stat here is in 2019, they said about 6% of the people worked at home in 2020. They’re saying it’s going to be about 21% of people working from home. And I bet it’s higher than, yeah. And I think this, I think this is full-time unlike people like us that are kind of, you know, back and forth, back and forth,
Tracy: But there’s a lot of people who are still working.
Tego: Co-primary offices. I think that’s the thing, a lot of people, right. You know, they have their work office and they have their home office and they can bounce back and forth with the technology pretty easily
Tracy: Is what we’ve done. Um, as we’re able, we’ll have maybe two or three or four people that are in the office, but, um, you know, we’re less than 25% for sure.
Tego: So the experts are predicting it in 2021. I really disliked that term, the experts, because I think we’ve all lost faith in the experts in 2020, but that’s a different conversation. Uh, however, you know, the, the, the, the people that actually really dig deep and look at this stuff, they’re saying that in 2021, we’re going to pull back a little bit, but it’ll still be 18% of people working from home. And in 2022, we’ll say 12% of people’s working from home. So that’s double right.
Tracy: Double 2019. And so we’re assuming by 2022, we won’t be in the middle of this pandemic anymore. People will be able to be back at work as normal.
Tego: And the point is, there’s obviously a shift where work at home is going to be a much more common practice, uh, going forward.
Tracy: And we know that a lot of major companies, huge employers are saying, we’re not ever going to have the same look to what we had before.
Tego: Talk about the builders and what the builders are building right now that the builders that, you know, the companies that build and design homes, they are designing homes now for that trend,
Tracy: They do. But think about the, GoDaddys the Googles, the Amazons, the, you know, the big, big companies out there, you know, our son works for GoDaddy and they’re telling him, you know, probably he can work from home from ever forever, which his company always had before, but people like to go into the office and be a part of, uh, of a community. Right. Um, but they’re already saying you’re going to be working from home a hundred percent way into next year. And you know, it, it, that 6% to 12% I’m sure is at least accurate, if not,
Tego: No, I, I agree. And, and so, um, just before I know we’re rapidly running out of time as usual, um, affordability, homophobia ability that is going to be something that’s going to be, you’re going to see a lot of headlines about housing affordability and affordability crisis. And, and, and that’s the thing. It, it definitely is that the reality is right now, even though prices have gone up anywhere from eight to 10% over the last year for, for homes, the, the actual affordability indexes either stayed the same, or actually gone down because of the low interest rates. And so, you know, watch for interest rates going up, which again, all the experts, nobody is predicting interest rates to have any big spikes, even, you know, all the way through next year, 2021. Um, but the, this lack of inventory is going to be driving a lot of the trends. And one of them is this accessory dwelling unit, uh, phenomenon, which, which,
Tracy: Wait, you said that so fast accessory dwelling unit
Tego: ADU Is kind of the term that’s being thrown around out there. And it’s, it’s the granny flat. That’s a term, the, the, the, uh, the co Multi-generational House, it’s, it’s basically taking an existing home and giving it an additional, uh, apartment residents, uh, usually for a family member. But that doesn’t necessarily mean true that the challenge with that one is, is owning obviously that, that so much zoning. And I know in Albuquerque, we’ve, we’ve recently totally redone, you know, the zoning. And so that can be, uh, a way to alleviate some of this, this, uh, inventory shortage, as well as, uh, costs of, of housing issues going forward. So that’s the thing, it’s one thing to, to watch for Tracy.
Tracy: Yeah. You know, uh, the Minneapolis area changed their zoning and they’re allowing accessory dwelling units on almost every property in the Minneapolis area. And that was their way. Um, they, they basically abolished single family home zoning. So they’re allowing duplexes triplexes to be built anywhere in the city. Um, you know, it’s a huge, huge change.
Tego: Well, and it’s one of those things where, you know, talk about opening up, uh, a lot of, you know, you, you buy a home. I mean, it’s one of the things that you could probably sit here and debate for a full day about, you know, the, the pros and cons of it because people buy, you know, in a neighborhood because the zoning says that this is the only type of home that’s going to be built in a neighborhood. All of a sudden they come in and change it. And so it is something to watch. That’s all we’re saying here.
Tracy: Yeah, it is. You know, you think about, I mean, I happen to know the Minneapolis area pretty well. Having grown up in a now suburb of Minneapolis, and there are some neighborhoods where, you know, people have big, beautiful stately properties near lakes. And, um, you know, if you think about somebody putting a triplex next door, um, it it’ll be interesting to watch, but really with the lack of land in a lot of areas, it will be interesting to see. I don’t expect big changes in 2021 though. So next topic,
Tego: The last thing I just want to wrap up this conversation is the construction boom that is happening. And it’s going to continue to happen. Single-family home construction is going to continue. We talked about earlier about the last decade of construction. There’s plenty of room for building, that there’s there’s need for it, especially in the lower price point. Unfortunately, we’re not seeing a lot of that in the Albuquerque market, as in affordability. I mean, under, under, under 300,000 new construction is, is a rare, rare thing in the Albuquerque area. Um, and so those are, those are some of the big things Tracy, I did want to hit on one thing before we finish up for the day. I have a stat for the day. I have a stat for the week. I did a quick look at the first 15 days, the first half of December, comparing it to last year and just in there, or we’re looking at the Albuquerque Metro Albuquerque area of Bernalillo County, Sandoval County in Valencia County. And we’re seeing 38% less homes on the market this year. Then last year we’ve seen, uh, we’ve seen a small increase in the number of homes coming on the market. So that’s a good sign cause we need that. We’ve seen a 40% increase in the number of homes that have come off the market as a pending sale. So the the sales are strong in December. It’s, you know, there’s no doubt that 2020 is going to be what we’ve already surpassed it. 2020 Is going to be the strongest sales here for real estate and Albuquerque ever from a number of units standpoint and dollar standpoint without, without a doubt. And it looks like December is going to be strong just based on some of these preliminary reads that, that I’m seeing right now.