ABQ Real Estate Talk #349 Jan 2, 2021

It is new year’s Eve or new year’s after new year’s day. If you’re listening to us, though right here on the radio is of course to go on Tracy, joining us every Saturday morning, right here on the Kiva, the Albuquerque real estate group, but you can find them to find them directly at welcomehomeabq.com. That’s welcome home, maybe Q a.com or why not pick up the phone and dial them directly this morning. They’re waiting for you. Four four eight 88 88. That’s four, four eight 88, 88, or yet one more time. The number one real estate website in the state of my spiel. Welcome home. Abq.Com. Happy new years guys, or Hey, new year. Yes. Happy new year. Happy new year

To be here on this happy new year for

All the folks that are our regulars, listening to the show and usually see us in our studio, in our office where you’re not in the office today, but this seems to be working Eddie. Are you hearing us okay. On this and clear getting microphone and you’ll look amazing too. I love the studio lighting there in the back. Absolutely amazing. Yeah. So Eddie you know, th this week we wanted to talk about, you know, what we’ve gone through this year in real estate and Albuquerque and what we see coming down the pike. I do see some, some challenges as well as some opportunities in the real estate market in Albuquerque.

Yeah. You know, obviously end of year, we always do kind of a recap and we’ll have more of that into January, but we’re also talking a little bit about what, what we expect for 2021, mostly the opportunities

There, there is. There’s like I said, some challenges, but the biggest challenge is, you know, is, is the lack of choices for, for home buyers right now, and the lack of number of homes on the market. And I want to bring you in on this conversation that he go ahead,

Which leads to one of our topics today, which is homebuilders and the lack of land for them, and what has happened, impact that even further in 2020,

There was an article in the New York not the New York times, the wall street journal, the, the better New York times the, the wall street journal about, you know, the challenge that homebuilders have, not just locally here in Albuquerque, but around the country, finding ready to build blocks. First tale, there’s a shortage. It’s not like they don’t want to build homes if they just can’t because they don’t have enough dirt to build that. Now at a, you know, the story of the local builder that then kind of fighting to get development out of the ground, you know, on the West side. And they’ve been, I don’t know, it’s been two, three years, I think, and they’ve got multi-million dollars into it and they still can’t get it done because not because the neighborhood or the community or the piece of dirt isn’t zoned for use for residential, it’s still has to go through planning and zoning to do the subdivision, all that stuff. It’s been at least two years, but I think it’s been long. I think London generally take for most people, Tracy, to get through the whole process. If you were taking a sum them on through the approval process on their own, a piece of land, how long would that generally take?

Yeah, it would take a while anyway, you know, a year, maybe more or less.

So it’s different things that he, so, so let’s say you have a piece of you have one of those 0.8, nine acre, lots in North Albuquerque acres, right? You can break ground tomorrow. Right? You can start, that’s already zoned. It’s already subdivided. It’s already to go for that. But if you are a, a land developer or a builder that is developing land for builders, and I say that wrong, no, I did say you get my point. Yeah. So if you’re either developing land to sell or developing land as the builder, you’re looking at a two year process. So, you know, you go and find you know, let’s say a five acre parcel probably on the West side. That’s basically where it is maybe Rio Rancho. You’re looking at a couple of years of, of before you’re ready to actually start building. You got to do the financing, you’ve got to put the whole deal together.

You gotta figure out utilities. You got to do all the the studies, environmental studies to get your roads and brewer and everything in place. And it’s just a long process. And at the end of that, you know, a finished lot that a builder is going to buy from somebody that’s, you know, put all his time and energy into the lot. They’re going to be spending $70,000 for just a residential lot on the work side right now. I mean, think about that. I mean, you know, the, the challenge we’re going to be, I think we’re going to see is just affordability dropping for us because there, you know, builders can’t build a home for under $250,000. If they’re paying 70 or $80,000 for the lot, it’s just not going to happen. Right.

Cost of money and holding that land and the time to get it developed, all of that plays into that cost. Right.

And, and so, yeah, it’s, it’s a long process. And you know, you think about that. If you’re in a, if you’re a developer and you’ve got two, $3 million to invest to build out a neighborhood or take that money and put it somewhere else, you know, the, the, the problem is you’re making an investment for something that’s going to happen two or three years from now. So it’s, it’s a risky proposition and not a lot of people are doing it right. And it be, people got burned back in Oh seven Oh eight when all these lots were developed and then boom, the market fell away. Right. And the other thing that I see Tracy and Antigo is coming into this. They could be holding them through the cycle. The is now,

Right. I think there’s a shortage of property that’s available in the market. It’s a great opportunity. Especially we have a land that’s ready to build. They do, but the site, but they’ve been held up. I mean, I think there’s a claim. I hate to say it like this, but given the type of product that it’s trying to turn out, which I think is between 250 and 300, I’m just guessing, is that what you know right now in Albuquerque proper construction for under 300? No, no, no. This, this new, this particular, I mean, they’re, they’re targeted probably two 50 to three 50, but they actually have a claim because those products were fly right off the shelf. They would literally be sold. Every one of those things would be an escrow tomorrow. I would imagine maybe even just with your buyers, I think it really is that, and they’ll have that type of claim and the city of Albuquerque isn’t doing itself any favors by not getting this thing done.

Well, it’s interesting. So there was this thread that, that McKinsey put out there, you know, McKinsey from Abrazo homes and, you know, just talking about this wall street journal article, that’s where I first saw it in that, you know, he basically said, what did he say? He said that the battle is real or something that, you know, they just can’t get enough, lots to the build on fast enough. And in the, in the chow and somebody made the comment along the lines of, well, they shouldn’t be doing infill. Well, you go talk to a builder. That’s ever tried to do an infill project in Albuquerque. And you asked them how easy that went. I’m just telling you infill sounds good. And it sounds good if you’re, you know, talking, you know, policy-wise and it sounds great. And there’s a good talking point in campaigns. This is about as political as I’m going to get, because it’s the thing I do every day is they talk about infill, Oh, we want infill. We don’t want sprawl. We don’t want this. Well then actually don’t just talk. It actually have the policies and make it possible for these guys to do I say guys, but guys and girls to do infill

This project is sort of infill it’s right. Between Oxbow. It’s like by St. Pius there in the bluff, down by the river between Bosky school Lulu’s or Lulu’s in Oxbow, one of the two right in there. And, and it’s infill, but it it’s really being held up because the neighbors keep protesting it. But that’s the, the thing about infill, if it’s a lot here or there, or a small thing, the neighbors already use it to walk their dogs there. They don’t want somebody next to you.

Well, the, the, the, the term is NIMBY, right? It’s not in my backyard. It’s like, don’t do it in my backyard. And I’ll just finish this off with this, because I know the area that you’re now speaking of. And I grew up that’s right. Taylor ranch. So right above the Hill, that’s right there. And as you see, Taylor ranch looking down LA Luce was actually the first one of the first communities that was ever there. It goes back to the mid seventies. So Taylor ranch was built on something called college Heights right there. And you can see the first house that’s right there. And then Delaine that goes right up that road, and then looses at the bottom of that. And it overlooks. And many of those people, if you go in and I doubt many people have actually traded away from their homes from there because they’ve owned those houses free and clear, and they own the real grant amazing development.

So I can understand the pushback, but, you know, given, you know what in Brian, I know he knows it. Well, I know Brian very well. He grew up in that area just on the other side of St. Pius high school. So he knows the value of that property. And I, I can only imagine there will be a time where there’ll be, there’ll be some give, and I hope that that is soon, but we need more product out on the market. We should definitely talk about that. This is the best time in the world as Albuquerque. The merchandise should property. We of course have our homes of the week some open houses that could be virtual open houses, and we’ll let Tego and Tracy take it away. Thank you both for, including me in that conversation. And we’ll keep what’s happening over there. Thank you. Thank you. So here we are here. Yep.

Let’s let’s talk about what we were just covering building. So we were talking about land and there’s a lot of information out there, new home construction, right? Of course we work with builders. Of course, we work with new home builders like Abrazo and bolt D and VR, Horton, and Twilight, and all the other local and national builders. And what we know is land’s hard to find. Albuquerque is landlocked. We have Indian reservations on two sides. We have a mountain on the other side going West, the only direction we still have a lot of land. We’ve got issues there as well. I mean, we can go a ways, but we’ve got volcanic land. We’ve got a scarp mints. We have individual ownership. So assembling a parcel, large enough can be difficult. We have Rio Rancho, which we a lot of land, but again, unless it’s, Amref, that’s still owns a big parcel. It’s individual owners that are all over the world that people bought the land in the 1950s and 1960s. And they’ve passed it down. So now six grandchildren, or great-grandchildren own one lot. And the lots of joining that lot are owned by other grandchildren from all over the world. Right? So putting together a big enough parcel for like a Dr. Horton or a Pulte or a big builder to do a neighborhood.

Well, and let me just add onto that. It’s not even the big builders. It’s like, if you own, let’s use rear Rancho, for example, because a lot of people own a lot in Rio Rancho, right there they’re half acres, there’s 88, 80 some thousand of them, right?

Some of them are buildable. Some of them have utilities or utilities near

The key is some of them. And so the reality is that the is not the problem.

The problem is the infrastructure, right. Is, you know, gas, electric, water, sewer roads. Yeah.

They scraped roads back in the fifties. 1950S is now like 70 years ago. But most of those grape roads, you can still see where they scraped.

Yeah. So, so that’s, that’s the challenge. And so a good buildable, I say, good, good in the sense that it has utilities it’s ready to build on, you know, or that utilities may be not be a big challenge. Like let’s say, take North Albuquerque acres. For example, too, we were just talking about, you know, those are our eight, they call them acre, but they’re 0.8, nine. And they generally have your, your electric, your gas, not always. And not always a lot of them are on propane, but then you’ve, but you know, water can be a challenge and sewer can be a challenge. A lot of those are on septic systems. There’s, septics, you know, doing a septic system, as long as you have enough land, it’s not a big deal, but it’s going to be an eight to $15,000 expense to put her in a subject

Depending on the soils and the drainage and all that. Yep. Yep.

So, so, you know, it’s, we’re we keep hearing are I keep seeing all these national stories and we’re now locally, there was a story in the journalist week about the lack of number of home from the market. And then people just go, well, let’s build some more, let’s build more. Well, it’s just not that easy, just like we were talking about it’s a two year process, if you’re going to do a subdivision, for example. Right,

Right. So let’s talk about how 2020 changed things as well. So 2020, we have all these builders that are working on subdivisions, buying the parcels, getting them zone, getting them subdivided, thinking about how they’re going to put in streets and an engineering of it. And the utilities and along comes March. And what we know is March, lot of people like us and other businesses just stopped. We didn’t know what the implications of COVID where we cut back everywhere we could, which is what builders did. We didn’t know if people were going to buy homes. So by the end of March, a lot of the developments that were coming stopped. And once the builders started to feel confident, again, that there was still demand for new homes. A lot of the government agencies were also trying to figure out how they work from home, how they set up people to have secure computers at home, how they were having their phones from office ringing to people at home. So a lot of the public was, or a lot of the employees needed to do permitting or to do the community. Sinuses of development were also not available. So we see, I saw a graph about, about it and it just dropped, right. It took a couple months for people in the building industry to have that confidence that they needed to keep going on, developing those lots and those neighborhoods. And then there was also the extra delays of the government entity.

We went from the standard build time for a new home from six months to now, we’re seeing eight, nine months.

And across the nation, not just locally builders are limiting the number of homes. They will even sell a month because of their demands. They’ve got contractors who are not available. The industry is very busy, but then they have to deal with just like the NFL. They have to deal with people getting COVID here and there, and a contractor’s not available and it causes another delay. And so it’s, it’s right down the line, how COVID has impacted new homes.

Yeah. And, and I think, I think you, you bring up a really good point in, in, let me, let me package it this way is with COVID with everything that’s happened this year, the demand for housing increased. I think there’s no doubt about that. Right. I mean, you can’t, you can’t argue. I mean, there absolutely demand increased and there’s, there’s a bunch of reasons about that. It’s not just interest rates.

No, no. And you know, let’s talk about that. So thinking about the demand, sorry. Right. By the mic here, the demand, people who are home more, right. And they’re going, I’ve got my kids at home, I’m doing school from home. I’m working from home. This seems like it’s going to last a while. I need a home to accommodate this and now’s the time. So there has been all of that demand in addition to a lot of people getting older and having more stable globs that, you know, the millennials. Yeah.

Well, well, th that’s what’s happened and there has been some, some analysis and talk about, okay, are we spelling first-time home buyer from the future? And I think the reality is, yes, we have stole some first-time home buyers from the future. But this demographic with this cohort of what the millennials that are, you know, moving into this late twenties, early 30 age group and starting families and settling down, that’s going to continue now for the next four or five years. So we’re, you know, even though yes, we’re still stealing some buyers from the future. Overall, the demand is going to continue. I want to get the supply side, but go ahead and talk about that. Yeah.

I also think we’re stealing first-time buyers from the past. A lot of people who should have been buying the last

Few years, you know,

They, they realize now, Hey, what am I doing renting in? And now I’m home more. And, you know, being in an apartment or having roommates and things, it’s just not working very well when you’re stuck at home with COVID. Right.

So they they’re, yeah. They’re there in the apartment. They went and did the math and said, let’s see for $1,200 a month that I’m paying in rent. Let’s see what can I can own at three, three and a half percent interest rates. All of a sudden you went, Oh, wow, look at that.

So I think all those people who should have been buying for the last five to 10 years are, might, might be moving forward and actually buying in. And we see that, you know, I don’t have to look at a national story to know that we talked to those buyers every day. Right. And by the way, Tracy and Tito Venturi, Venturi Realty, group of Keller Williams Realty, we’re so honored to be here seven, almost more than seven years strong now. And coming to you here at the end of 20, 20, another great year on the radio

Near the end of 2020. Yay. Yeah, no. W we’ll see. So 20, 21 in, well, let’s, let’s finish this conversation about the supply side in housing and what happened in 2021 and 2020. Yeah. I’ll get it straight. What happened? Not what’s going to happen, even though I got some ideas there, but in 2020, what happened was when, when everything hit in March, you know, obviously a lot of people put the brake on putting their home on the market. Right. And, and so there was quite a drop in the number of homes coming on the market as to be expected. Now, the reality is though, in February, even we were already seeing that we were going to have a shortage of choices for homes for sale in 2020. It was, it was already, it was already in the cards, right. It wasn’t like, Oh, that was the only, no, it was already there. This just enhanced it. And then what also a couple other things will happen. Obviously you talked, we’ve talked about the builders we talked about, the builders are, are also, builders are much more conservative, you know, especially the ones that went through Oh six Oh seven Oh eight Oh nine. Right. They’re very connected.

They don’t want to get stuck with land that doesn’t have income. Yup.

So everybody kind of put the brakes on. I think we, everybody put the brakes on in March and April. Right. And so that, that has something to do with, but another phenomenon that happened is, think about this. How many people you think move their elderly parents from the family home into a healthcare or long-term care facility this year.

I’ve seen a lot of news about that. And a lot of people did that right away thinking that was the safe place for them. Unfortunately, I think reality hit was not the safe place for them. They should have either stayed in their home or move in with their family.

So that’s what happened is these, these family homes, these, you know, the homes of the elderly folks that are not now moving in there, you know, I, I saw an article talking about the boom in in-home healthcare. In-Home health care is just gone crazy this year, as you can imagine for the elderly, because they, you know, people don’t want to go to those, those places right now. And so again, that’s also drew in the lack of, of people listing their homes for sale. And so that’s, I think the big thing then going into 21 is just the, the low level of number of homes to choose from lack of inventory as we call it. And I don’t see anything that’s going to alleviate that unless for some crazy reason. And I don’t know what it is that the demand drops off suspense substantially, but right now it’s steady as it goes.

She doesn’t make sense if it’s not going to drop off

Th th just the demographics alone. And the fact that interest rates are look like they’re not going to change at all.

It would take something catastrophic beyond a pandemic that we don’t know about. Right. And so we can say, it’s not going to happen. Let’s talk about new homes and new neighborhoods. So there are new neighborhoods coming of newly constructed homes for sale on the market. And yes, us realtors can help you with that. We know the ins and outs of negotiating with the builders and getting the financing. So if you’re driving around and you see a new home builder sign, you know, it says, Hey, new neighborhood give us a call. We can help you with all the builders. Not just one, a lot of times, people stop in at one builder and they end up buying a home and they haven’t even looked at the other builder. That’s just down the street. So we can show you all the different neighborhoods of homes for sale, from new builders. We can also, if you want to build a custom, buy a lot and build a custom home, we know a lot of home builders to help you interview, to see which home builder is going to work best for you. And we have a lot of resources like that.

So I always say everybody needs to build a custom home, or maybe not even a custom, maybe a semi-custom home one time in their life to test their marriage, their marriage. Exactly. Yeah, no, we’ve already done that. We’ve been there, done that. We made it through. That was like 20 years ago now. Yeah. Yeah. So, so

Coming soon. So I know we, we always have our homes of the week. We don’t have very many it’s new year’s, there’s a few people that are working on having their home on the market soon. And if you’re looking for something specific, give us a ring. We might have it coming soon. I know of one in BASCA and concerto in Verna, Leo, that beautiful gated neighborhood downtown.

Talk about that neighborhood real quick, because I think it’s, it’s a gym. Not a lot of people know about

Last scan. Cantata is a gated neighborhood down near the river off Sheriff’s posse road. What’s the brew pub across the street.

Oh my gosh. If I get it wrong, I’m going to feel bad. A bossy. I think it is Pasky they took over the old big deal jackalope. Yeah. So it’s across from

Like right by the Santa Ana star casino and golf courses and tell Maya and all that. So by the river, on the West side of the river, just South of five 50,

And I think it gets missed because it’s actually a burn of Leo address because even though it’s on the West side of the river and people don’t realize that Burna Leo crosses the river right there, and they actually, the Walmart five 25, 28 is actually in Bernalillo. It goes all the way up anyway.

Yeah. Gated neighborhood mostly. So there’s right at the very front of one of the Gates. There’s some lots that are quarter acre with nice custom homes. And then the next street, which is a little called is half halfacres. But the rest of them in there, it’s a big loop with some different call, this app, their acre, lots in the, you know, Bosky with big, beautiful Cottonwood trees, literally right next to the river, just, just a great spot and very quick to [inaudible] you don’t have to get all the way to five 28 to get on. There’s a stoplight there now to get on and off five 50. But beautiful custom homes. And we have one coming in the next month or so that’s a custom, but newer, you know, a lot of those homes are now 10 to 20 years old.

Yeah. That’d be more than 20. Cause we were looking at, in that area when we were building

Right. Which was 20 years ago. Yeah. At the time. But yeah. So, so this one was built about a year ago, so really modern, new, new construction home. We also have another one coming in Los Lunas. That’s going to be affordable under 200,000. So if you’re looking in Los Lunas we also have some land coming into Harris. We just had one piece that went pending out in Cedar crest or to Harris. We have another one coming that, you know, if you’re looking for something to build on. So we have a variety of homes in the, in the pipeline. If you want to give us a ring and find out, you know what, or let us know what you’re looking for so we can help look for it because market is tight. We’re at four, four, eight, eight, eight, eight, eight. We have an amazing team of realtors that work with us. And we all take turns, Manning the phone. So you’ll catch somebody if you call the four, four eight, eight, eight, eight, eight number.

Well, and we have I must say a pretty impressive marketing system. Even no homes are selling fast. You still need to market them properly. Still need to merchandise in property. Still need to prepare them for sale because you want to get top dollar. Right. Just because it’ll sell doesn’t mean you’re going to sell it for top dollar. If you still don’t do all of those stuff. So yeah. Can I come in and take photos of your house with my cell phone and can we get it sold? Sure. But is that, is that really do when you have a service? So leave money on the table? Probably well,

For sale by owners, a lot of times we find that when we help somebody who has tried to market their home themselves, put it on the market as a, for sale by and done marketing, put it on some websites and things. We find that they still net more, when they sell their home with us, we merchandise it. We help them with their staging. We make sure it gets marketed on all the top sites and a net out. They still leave with the same amount of money they were hoping to leave with. So if you’re thinking of selling your home yourself, we would love to talk with you and show you how we can add value.

Great, great. And if you want to reach us, we’re a Venturi Realty group, Keller Williams Realty. We’re at welcome home. Abq.Com is our website and our cell phone or cell phone. Our office phone realtor on duty line is well, I can give my cell phone too. I mean, I don’t mind, you know, give me a call five Oh five, four four eight 88, 88 is our, our team line Eddie. And you know that you’ve got that number memorized with all the other useful information that you have memorized over the years. We got a lot of information, a lot of home, a lot of transactions. We’re proud to have to go in Tracy. We’re so proud of them and their team and what they do, how they serve the community. And more than anything. My friends who have all bought homes from basic and who I trust and the market trusts as well.

Folks it’s really that simple four, four, eight 88, 88, that’s four, four, eight 88, 88. We got a happy new year Tigo and Tracy coming from Kevin Davis and other people sort of popping in as well. And you know, it’s just a slow time, but you did say one thing and I don’t want, it’d be remiss if I didn’t address your whole thing about the phone, want to figure out how to be a success at anything. It’s really simple. Answer your phone. That’s all you have to do. Pick up the phone. Never let that phone continue to ring. That’s the best thing you can do? Four, four, eight 88, 88. Okay. I gotta ask you now. I gotta, I gotta ask you how many texts a day do you get to the five number? I, you know, up counting I have right now, currently, I don’t even know.

I have 560 text messages that I I’ve either read, haven’t read or whatever, but I’ve got to get a better, that’s one thing I plan on doing, and I’m managing more information. So people need a place to vent and, you know, reach out and feel like they’re being heard. So I do read all the text as much as possible on there. So, you know, I I don’t know if I’m getting to all of them. I, I can just hope that, that I am as many as I possibly can, but I go to bed sometimes just like, Oh, I don’t even know who that is, but okay, thank you. And I just send them in like a text and hopefully it helps them. You know, I mean, people helping 2021 is going to be a big year and it’ll be a great year.

And I know earlier this year, as Tracy actually mentioned, she said she didn’t know where the business was going to go in March. She couldn’t have imagined what has happened. Her business just this year alone adversity brings opportunity. That is one of the things that, and you know, people talk about luck. There’s no such thing as luck. It’s where preparation meets opportunity. And that is luck. And that has what has come together for both of you in 2020. So we’ll look better. We’ll look forward to a 2021.