Are Albuquerque homes expensive? Is owning better than renting?
(Transcript Snippet): “Tego:
How do you say this Tracy, homes are too expensive. Have you heard that? I haven’t heard that homes are too expensive and just like anything it’s relative it’s relative to, in this particular case, what is your rent going to cost?
Tracy:
Right. So owning a home. Is it still more affordable than renting one? That’s that’s the question? So it’s interesting in the days of pandemic and all the changes that we faced, you know, a lot of people are seriously thinking I should own a home. I should, I own a home. And the whole, you know, we’re spending more time in our home and all that. We’ve had a lot of people questioning that. And so really the charts will say, if you can qualify to buy a home and you’re going to be in the home for two years or more typically the cost of the home comparable to what you might be able to rent is going to be less than renting.
Tego:
And, and what we’ve seen Tracy over the years, and this has held true for a long time. Now in, in here in the Albuquerque market, is home prices going up, rent prices going up. I mean, the lines basically just track each other. If you look at it from a percentage appreciation. So it’s not like, okay, if I, if I rent, I’m going to save money over owning. And the math works out just about every time and, and it’s held true forever. If you intend to be in your home for at least 18 months, the cost of, of owning is going to be less than the cost of renti ng.
Tracy:
I mean, we can’t say that with a hundred percent certainty because you know, the house could end up with a repair issue that makes it off balance or something, but, but in general, it’s better to be an owner.
Tego:
Yeah. And I’m talking very broad statistically, for sure. Right? Of course. Yes. Yes. Th the
Tracy:
Things that a lot of people we’ve talked about this a lot, but you know, all the reasons why owning is better intrinsically. And so I was just talking to numbers, but just flat out flat out numbers, it should be a better monthly outflow as an owner versus a renter. And we’ve seen huge increases in rents this past year. Right. In the past 12 months, rent prices in our area have really significantly taken a jump.
Tego:
Yeah. But the, the, the number on that it’s somewhere around 15% is what home, excuse me. Rental prices have gone up and that’s, that’s across the board. I mean, it’s not necessarily just single family that the apartments that’s, you know, duplexes or excuse me you know, multiunit apartments and everything. So, yeah, it’s it’s the, the thing that’s though is when you look at some of the historical data on what the costs of your housing, I’m not talking buy, and I’m just talking about your place to live, right. Historically it’s run around 30% of your income. Well, today it’s still only around 20% of it.
Tracy:
Right. So that’s A real affordability, number?
Tego:
Yeah. And again, That’s comparing median home price to median income for, for the area. So it’s, anyway, it’s, it’s tough when you see prices go up 25% in two years and not say, oh, my gosh, homes are just too expensive. Well, what’s too expensive. Yeah. Yeah. So that’s a question. I mean, everybody gets challenged with, and, and you just gotta do the math in my, you know, at least in my brain and my engineer brain is you got to do the math. Right?
Tracy:
Right. So the other thing we have is a program where people can pick out their house, have it purchased for them with cash. So they’re a competitive buyer and have a lease purchase program already in place for, so for up to five years, they can move forward on purchasing the house.
Tego:
Tell us more about that program, Tracy. Cause that’s a great program that it, it’s a very little known program, but it is available here in the Albuquerque market. You just need to reach out to us and we’ll, we’ll hook you up. Right? Tell us about,
Tracy:
So It’s a, it’s a program where we partner with another company that buys a house. You pick it out, you qualify, you fill out an application on their site. We then go, once you get approved for how much price to buy, what kind of house you can afford we go shopping and pick out the house and they buy it with a lease in place to you. So, you know, like longterm, you can paint the walls, the color you want because you’re going to eventually become the owner. And you agree at each stage of that next five years, what you would pay for that home when you convert it into a purchase. And if for some reason your plans change and you end up relocating to Las Crucis, you don’t have to move forward. And you’ve had a house that you’ve been in, but you have the option and it’s all upfront what the price would be on the house each year. Should you convert it to that purchase?
Tego:
It’s a good option for people that aren’t sure they might want to buy, but they might not. So they get the option. It’s also good for people that maybe need to work on their credit. Something happened, they haven’t been in the job long enough, whatever, and they need to do a little, little touch up on their credit.
Tracy:
Right. Perfect for that. Sometimes it’s just helpful to get the house you want in the neighborhood you want because they are going to be buying the house with cash. So it makes you a stronger buyer, right. You know, in this market. So that’s an option. Call us four, four, eight eighty eight, eighty eight. If you to learn about how that lease purchase program works, basically it’s fun though, because you get to pick the house and then they go and buy it.
Tego:
Yeah, no, it’s, it’s a great program and it’s really nice. It’s available. And those type of things, those type of programs, and let’s call it, you know, real estate business models. There’s more and more of those coming out. That’s just one of them. There’s a lot of stuff in Phoenix. It’s Phoenix seems to be the the, the market where there’s a lot of these different business models around real estate and ownership. So we see a lot of them over there and then they start to migrate.