Tracy (00:00):
So it’s a beautiful weekend, you know? Yeah. We had a little cooler this week, but beautiful weekend. And it’s Halloween and the end of the month, right? Yep. October. Can you believe we’re almost to November Tego.

Tego (00:13):
I know. It’s just, you know, it’s just time flies. Time flies. Those time flies, you know? Yeah.

Tracy (00:18):
So we have lots of great things we’re talking about today. I don’t, I don’t know how we’re gonna fit it all in one show, but let’s give a rundown.

Tego (00:24):
Okay. Let me do a quick here. So adjustable rate mortgages, right? I just wanna hit on that real quick cuz there’s been more conversations about that. The city of Albuquerque confirmed something. We’ve all known that there’s a shortage of housing units in Albuquerque. So we’re gonna talk about that. And then for, for Halloween, Tracy, we’re gonna talk about first time home buyer fears and some of the things that, that people imagine that are gonna be difficult about the home buying process. And you’re gonna hit on that. And then we really want to talk about this mfa, Mortgage Finance Authority, New Mexico Mortgage Finance Authority targeted areas program. It’s amazing program. And there is a short time window on this, and we’ll tell you why here in a minute. But it’s an amazing program for, to get people into homes at a very low interest rate.

Tracy (01:11):
Very low, right? Yes. Like the lowest it’s been in a year.

Tego (01:14):

Tracy (01:15):
So where do you wanna start? Tego Let’s

Tego (01:17):
Start with well, let’s do the Halloween story, which is, it’s, it’s scary to buy a home. Maybe’s.

Tracy (01:25):
Scary. Yeah. Scary. It can be very scary for,

Tego (01:28):
For, for first time home buyer that just doesn’t know Right?

Tracy (01:31):
Tego? It’s beyond the first time home buyer. I think that’s, every home buyer right now has fears and it is scary. There’s a lot of news out there. They’ve seen interest rates go up the, they say that we’re heading into a recession or we’re in a recession and housing bubble. Housing bubble. Yeah. Yeah. And I know you’ll have stats over the next few months about that and what we’re seeing, but today we’ve got so many other great things to talk about. But when when you think about the fears of buying a house and what we’re hearing from people, you know, Gary Keller and Jay Papain just put out a new book. And for those of you that are watching online, your first home it’s really great all about your first home and what to expect and things. But there’s fears about buying your first home in here.

Tracy (02:19):
You’re right at chapter one, right? Yeah. And, and it goes right along with the Halloween theme. So I’m just gonna read ’em. One, I can’t afford to buy a home now. Two, I should wait until the real estate market gets better. Three, I don’t have money for the down payment. Four, I can’t buy a home because my credit score is isn’t good. Five, I can’t afford to buy my dream home. Six, I should wait to buy a home until I’m certain about my domestic future. And seven, I should pay off my student loans before buying a home. So all of those are valid fears for sure. Not, not just for a first time home buyer. Right. And, you know, we can go through one by one, but what, what’s true is uncertainty is stressful and it can be easy to expect the worst. Right.

Tego (03:03):
Well, let’s just big picture here. I think people that listen to this radio station know that there’s plenty of fear in the media everywhere, in everything. And, and, and that’s cuz that’s what sells, right? That’s what gets clicks. That’s what gets people, you know, worked up and, and you know, paying attention to whatever the person’s trying to get you to pay attention. And to, and, and it’s true in the housing world too. As soon as you start searching for homes or reading stories about real estate, all of a sudden you’re gonna get all these headlines that say, you know, the crash is coming. The bubble is about to burst the, you know, mortgage rates are more than triple what they were and blah, blah, blah, blah, blah. Right? And all of that stuff is, is to get clicks. The the reality is there’s always something going on, Right? And so, understanding where you are in your situation, cuz that’s what really matters, right?

Tracy (04:01):
So really Tego, the, the fact is you can find a great home in both the depressed and elevated market, right? Right. So the the best option, all these fears that most people even experienced home buyers can have, the best option is to get with your real estate professional. We’d be happy to sit down with you and kind of go through those fears and help.

Tego (04:25):
Oh, but wait, they’re just gonna sell me a home.

Tracy (04:28):
I can’t sell someone a home if they don’t want a home Tego. But, you know, No. Yeah. There are a number of fears around trying something new and for people who are renting or living with others, you know, room sharing, whatever finding out the benefits of moving forward, even though you have these fears can be pretty powerful.

Tego (04:47):
Yeah. I mean, information is power, right? And knowledge is power. And so understanding the, the, the pros and cons, obviously,

Tracy (04:54):
Right? The long term factors in owning a house far outweigh the short term outlook of what people might be hearing right now, right? Yeah. So once we’ve made a decision to purchase the long term benefits of equity buildup, value, appreciation, tax benefits, all of those things weigh into why it’s always a good time to be a owner if you’re gonna have a, a time window of how long you need to own. And you know, one of the things that struck me, you know, our daughter bought a house in September Yep. Which made us sad and happy. Yeah. Because she moved out for real. She had come home during Covid. Right. And that was awesome. But you know, she, she bought and closed in September, she’s got the higher interest rate. And we thought it was great, great option for her. She, she locked in a 30 year mortgage.

Tracy (05:43):
And one of the things that’s on here is I can’t afford to buy my dream home. And, you know, did our daughter buy her dream home? No. She didn’t buy her dream home. It’s not the house that at 24 years old she’s gonna live in for the next 30 years, but she locked in a house that’s could be a future great rental or a house that over time will appreciate and she’ll have that extra ec equity that forced savings. So when she wants to get a different home, which may or may not be her dream home then, right. She’s still young. Right. But she’ll have that extra equity that’s built up and she’s paying her own mortgage instead of having rental and paying someone else’s and not having any value at the end. Yeah. Yeah. For sure. So, you know, just one example of why it’s a great idea, if you have fears about buying in this market, getting an a time to sit down, we could do a consult, talk about the fears, talk about the pros and cons, and help you decide if it’s a good time. Because not for not everybody, it’s a great time to buy a

Tego (06:45):
House. No, no, absolutely. And, and you know, if you’re gonna only be a year, if your time window’s only a year, then it’s probably not a good time.

Tracy (06:52):
No. Yeah. No. Doesn’t make sense to buy No. The cost to buy plus reselling or whatever. Unless you’re gonna hold it as a rental, in which case Yeah. Buy

Tego (07:02):
One of the things on the list, Tracy, there was I don’t have enough for down payment, you know, and there’s, there’s still I’m surprised a myth out there that you need 20% to down to, to buy a home for first time home buyers.

Tracy (07:17):
I heard a national news story Yeah. This week. Yeah. And they were talking about how buyers need 20% down to buy a house. Okay. I was watching the Today Show and it, they said that in their news story. And I was just like, I can’t believe that this reporter is saying that as a wait,

Tego (07:35):
Wait, wait, wait. A national news source said something. A matter of fact, that wasn’t true.

Tracy (07:40):
It was not that it wasn’t true, it was just so

Tego (07:43):

Tracy (07:44):
You know, shortsighted, you know. Yeah.

Tego (07:46):
Well those people that run the FHA program, the national FHA program, which was just been an amazing program for years and years and years, you know, three and a half percent down program, they’re probably cringing that Oh yeah. Hello, what about us over here? Yeah. You know, that have been running this amazing program for years.

Tracy (08:04):
So just to kinda wrap that up, Right. A VA borrow or somebody who’s been in the military service and has the option to use a VA loan, which great. Zero down, you know, there’s usually some closing costs, but zero down. Yeah. You know Yeah. Little bit of money just to close it and, you know, in this market we may be able to get sellers to help contribute towards that little bit of money to close it. So,

Tego (08:28):
And, and that’s a really good point. You know, six months ago, a year ago, two years ago even, it was very strong seller’s market. And so you’re having, you know, multiple offers and if there was anything strange on the buyer, you know, financing wise it, it, it could have been a, a, a red flag. And so now buyers are in a much better position to negotiate some of those terms and, and do programs and down payment assistance programs, for example, or seller helping out with the buyer on some, some closing costs as

Tracy (09:01):
Well. Right. So just to finalize those few different loan programs. Yeah. So a VA is basically zero down, right? FHA three and a half percent mm-hmm. <Affirmative> of the value of the property for a down payment plus some closing costs. There is the New Mexico Mortgage Finance Authority Down Payment Assistance program. And that, that program has just gotten much better. We talked about it a couple weeks ago on this show. Yep. Great benefit, great interest rates. It’s a great program. So basically they help you by providing the down payment and,

Tego (09:37):
And, and, and then we have,

Tracy (09:39):
And that can be an FHA or a conventional loan. Correct. Correct. And then there’s conventional, which some conventional loans are 3% down, some are 5% down, up to 20% down,

Tego (09:49):
And there might be some mortgage lenders out there going, But we have this and we have that. And that’s the thing I think I I just wanna say is there’s a lot of programs out there, especially right now with, with the the mortgage situation. So totally

Tracy (10:02):
Even bridge loans, so you don’t have to sell to buy if that’s the case on a lot of different things. So working with a local lender is so important because when you get online sometimes with an out of area, they don’t know about the down payment assistance program Yeah. Or some of the other local programs that exist.

Tego (10:19):
Well, and they’re not just local programs. So a lot of different, there’s, there’s a lot of different things out there right now. So let’s kind of just segue into that real quick, which is adjustable rate mortgages since we’re kind of on that. So, you know, the elephant in the room in the housing market lately has been mortgage rates, right? We went from 3% or so at the beginning of the year, you know, three, three and a quarter last week. I saw some stuff. Seven, seven and a half percent. We’ve been, it’s

Tracy (10:47):
Pulled back a little bit, a

Tego (10:48):
Little bit just this week, a little bit last week. It ran up a lot. And, and actually that kind of tells a story of the, the mortgage market right now. It’s very volatile. And I don’t want to get in weeds on this, but there’s just a lot of volatility in the mortgage backed security markets. Not at, not that there’s a problem, it’s just that they’re pricing in

Tracy (11:10):

Tego (11:11):
Unknowns, right? And that’s, that’s what happens. And so anyway, so seven, seven and a half percent is what we’re seeing with mortgages right now. And so, so what’s happened is adjustable rate mortgages have kind of come back, if you will. You know, back last year when we had 3% mortgages. Well, why would you need an adjustable rate mortgage to go from three to two, two point, whatever, right? 8, 7, 5, 8 and five, Right? So, so what’s what’s happened is we, we’ve got these adjustable rate mortgages and, and what, what we’re hearing is people are going, Oh no, here we go again. Here’s 2005 all over again with all these, you know, bad loans, the, these subprime loans. And I just want to tell everybody that’s not what these are right now. They’re very different than the type of adjustable rate mortgages that we had back then. They’re, they’re much different underwriting standards and the, the what we called liar loans those are gone, right?

Tracy (12:11):
So what we’re seeing most common right now mm-hmm. <Affirmative> is rate buy downs for a, a year or two. So the beginning of your ownership, maybe your interest rates are lower and they gradually go up over two years. And a lot of people are finding that really helpful just to get a, a little better rate right now and know that it’ll go up. But if rates go down again, they can refinance.

Tego (12:37):
The, the big difference between the adjustable rate mortgages today and the adjustable rate mortgages back in oh 4 0 5, is you have to qualify for the higher payment back then you only have to qualify for that initial teaser rate. And that’s not happening again. So I just want to let people know it’s, it’s a different situation, right? There’s, there’s a lot of protections built in the system after what we went through in oh 8, 0 9, Right?

Tracy (13:03):
So let’s talk about the city of Albuquerque confirming there’s a housing shortage.

Tego (13:07):
Wow. There’s a housing shortage. I, wound’t have know

Tracy (13:10):
Short units, right?

Tego (13:12):
Yeah. So the city the mayor Mayor Keller had a story, it’s been kind of floating around here for a week or so talking about these initiatives that they’re, they’re working on to get more housing units. And when they’re talking about housing units, they’re talking about, you know, apartments, condos, single family homes, any type of housing units. They’re trying to fill this gap. And, and what they’re estimating the city officials say that the city of Albuquerque, just the city, this isn’t the entire metro. They’re saying we’re anywhere from 13,000 to 30,000 housing units short in the Albuquerque area. And all of us in the real estate business have known this for years. We, we’ve known it, right? It, it’s, we, we know that we haven’t been building we enough. We know that it’s been very difficult for projects to move forward.

Tego (14:06):
And I’m, I’m the, the way they’re addressing it is, is great. And they’re looking to revamp some, you know, some commercial spaces and revamp some mobile excuse me what do you call it? Motels and some other stuff for housing units. And that’s great. But we just need to build, we just need to build baby build, right? I mean we just, and we do. And, and when I talk to home builders out there, and that’s who I deal with mainly home builders is, you know, the process to get a, get a project going and get something built in multi-family as well is, is broken. And I, I think the city really needs to look at that. And the mayor did address that when he was talking about it. That, that, yes, we need to re-look at all this, the zoning and the way things are done to get more housing units going. And it’s it, it, it’s a challenge

Tracy (15:00):
For sure. I saw something this week about Rio Rancho and they’ve got some plans for some affordable housing. So we’ll have to look into that and talk about that next week.

Tego (15:09):
Yeah. Mayor Hull, and Rio Rancho is, is also, you know, very aware of the situation. They’re doing what they can, they’ve got a task force working on they do, you know, housing affordability and and I like to use, I like to say housing affordability versus affordable housing. Cuz as soon as you say affordable housing, you know, everybody’s gonna say, No, I don’t want that. I don’t want it near me. No. That, that’s, you know, it’s different.

Tracy (15:36):
That’s, that’s exactly what I saw. Yeah. People already complaining they want it, but they don’t want it near them. Yeah. Yeah. It was gonna be the story was that they’ve earmarked some land at 528 and Corrales Road. Mm-Hmm. <Affirmative> kind of that intersection somewhere right in there. Got it. And yeah, it, it was, the story was about the knot in my backyards, which you call the nims.

Tego (15:59):
The NIMBY, Yeah. Yeah, yeah. I mean it’s, it’s, you know, that’s a very common term out there. Now there’s also the gibes, which is Yes, in my backyard. So there’s the, the knot in my backyard movements, which are, you know, we don’t want anything No, no development near me. And, and I get that. I, I mean, I’m not saying there’s anything wrong with that. I mean, everybody has a say. But then there’s the YIMBI movement, which is Yes. In my backyard, which are the people that say, No, we need to build, we need to push, we need to do more and have more, more housing. So it’s a, it’s a, it’s an interesting, interesting conversation. So speaking of housing affordability, I wanna talk about this amazing, amazing program that the Mortgage finance authority here in New Mexico has for people that are looking to buy a home.

Tracy (16:49):
So this is all about targeted areas to purchase a home. They’ve identified certain portions of the city, the metro area, where they will provide some incentive for people to buy in that neighborhood. Correct. In that part of the city.

Tego (17:05):
So hud

Tracy (17:06):
Different, different counties all over the state have been identified. So

Tego (17:10):
Yeah. So, so HUD housing and Urban <laugh>,

Tracy (17:13):
So you, you actually took their codes and put it on a map. Yep. You, you and Neil who works with us, put it all on a map so that visually you can see it, that’s on our website. Welcome home, the sale homes for sale in the N M M F A targeted areas in metro Albuquerque. Is that in the communities? The, Yeah,

Tego (17:36):
That’s under, If, if you go to our website under, under search, under search, it’s just says MFA targeted areas. So mortgage, finance authority, targeted area, the, there, there’s, right now as we speak, 54 homes that are in those areas that live

Tracy (17:50):
In our metro

Tego (17:51):
Area, in our metro area. So this, I mean, this goes all the way from, you know, Albuquerque, you know, Bernillo County, it’s lot in Bernillo County, a few in Valencia County. There’s an area, the MO yard area in Torrance County as well. Well, there’s a few areas. So, you know, it, you, you’ll, you’ll understand these are areas that have a a low, a low median income area.

Tracy (18:17):
They they are, but they tend to be older neighborhoods. Right. And they want to regenerate them. Right, right. Reinvigorate and get people to buy there that probably will update a house or, you know, make it more affordable place for them to live and make it better in the long run. So, you know, you with the map you put on our website mm-hmm. <Affirmative> we’ve only done the metro area so far, Right. I don’t know that we’re gonna do the whole state, but I mean, Chavez County, Eddie County, Oh yeah. All of the counties have this, but on our map, we’ve taken the time to do the metro area, so you can zoom in on it and really see what neighborhoods and what houses qualify. But tell us about the loan program and how this works.

Tego (19:00):
So the, the, the kicker on this program is, first off, it’s a low down payment program of some sort. I’m, I, you know, those details vary, but it, it could be as little as, let’s say $500 out of pocket. Probably not. It’s probably gonna be more than that, just, just depending. But the, the big deal about this is they will match the, the best mortgage rate that they had in the past 12 months. And that’s why there’s a, there’s a time window on this, cuz right now we’re, if you go back a year, we’re still in that

Tracy (19:38):
Three, just 3.25 I think for

Tego (19:40):
Mfa. Three, three and a half, probably three, three and a half, somewhere in there. Mortgage rates versus seven, seven and a half. That, that, right now

Tracy (19:50):

Tego (19:50):
We’re seeing

Tracy (19:50):
Right now it’s a rolling 12 month period. Correct. So every month that passes, we’ll start catching up with Correct. When the interest rates started going up. So if you,

Tego (19:58):
Which was, which was January. So right, there’s a, there’s a short window here where people can really take advantage of this program and get a low mortgage rate that you’re not gonna be able to get anywhere else right now.

Tracy (20:09):
Right. I know someone that locked in 3.25 last week. Okay. Using this program. So there are income limits for one to two person households. Generally in the Albuquerque area, the max amount you can make a year is around 90,000, which,

Tego (20:23):
Which is higher

Tracy (20:24):
Than the regular,

Tego (20:25):
Than the regular program. Right? That’s the other thing.

Tracy (20:27):
And three or more person household 105,700 and then the, the purchase limits. But these houses all fall within that. So if you are thinking of buying in one of these areas, or you know, somebody who’s in the market to buy and that, you know, under 4% interest rate right now would help them move forward, have ’em give us a call right away. The longer we wait, the more that interest rate will be. So let’s get ’em locked into a really low interest rate and help them start building wealth through home ownership. So, and,

Tego (21:02):
And let me just just circle back on that again. This is the Mortgage Finance Authority of New Mexico Targeted Areas program. We have a home search on our website You go to the search and you’ll show, and they’ll show all the homes that that appear to be, you know, fitting for that program, You know, where no guarantees, there’s always could be condition issues or something, but that gives you a chance to get in. It’s a really good program. And if you, if you have any questions about it, call us. We’re the vent group at Keller Williams Realty and we’re at 5 0 5 4 4 8 88 88. Okay.

Homes for Sale in NMMFA Targeted Areas Metro Albuquerque


Tracy (21:39):
That’s such an exciting program. It’s hard not to just keep talking about it. I know, I know. There are people who should be buying a house, you know, we gotta get it done, help them get in on these low rates. So is there a real estate slow down Tego and what does that really mean?

Tego (21:55):
Yeah, I’ve been seeing that a lot. Going back to news is real estate market is slowing housing market slowing down, hearing that a lot lately.

Tracy (22:07):
And you know what, people equate with that when they hear that, right? They, they say, Oh, prices are falling.

Tego (22:12):
Correct. Exactly. And so let, let’s, let’s separate these things here. The housing market is slowing down, has slowed down. The number of homes sold is down about 20% from same time last year in the Albuquerque area, anywhere from 2020 5%.

Tracy (22:32):
And last year was up like, well

Tego (22:34):
I know, I mean last year was, last year was a record record, right? So that’s the number of actually homes exchanging, right? That’s the units not pricing prices. There has been some price

Tracy (22:49):
Flattening leveling.

Tego (22:52):
Let me talk big picture here first off, because what happens is you’ve, you get something like Case Scher, which is the National Home Price Index, right? Everybody sees that. And, and, and so you get these headline numbers that say, Oh, home prices have what, what happened last week is the case Scher came out and the rate of appreciation has declined, but it got reported as home prices are declining. It’s like, no, no, no. The rate of appreciation is declining nationally. Now there are definitely some markets around the country that, what they’re called the frothy markets where home prices have seen some decline since, since earlier in the year. Right. But we’re not one of ’em. There’s a very few of them.

Tracy (23:39):
I’m sorry, I’m still on frothy markets. You know, it made me think of like a nice cappuccino. There you go. Nice hot cuppa Joe. Frothy market. So, sorry, back to, So,

Tego (23:50):
So the, the point is yes,

Tracy (23:52):
Price appreciation is slowing.

Tego (23:54):
Everybody agrees that the number of homes selling in 2022 is gonna be less than 2021. And it sure looks like 2023. There’s gonna be less homes selling actual, you know, number of homes and properties exchanging no doubt about it. And to be fair or not fair or unfair, maybe it’s unfair. That’s what the Federal Reserve wanted. They, they’re trying to slow down the entire economy and unfortunately housing is really taking the hit.

Tracy (24:27):
Well they’re targeting housing.

Tego (24:29):
Well they’re,

Tracy (24:30):
They’re targeting specifically they’re talking housing and needs to

Tego (24:33):
Yeah, yeah. I mean they’re targeting everything. But yeah, I mean, housing is

Tracy (24:37):
A huge chunk of

Tego (24:37):
It. Is, is is such a driver of our overall economy that, that yeah. There, you know, it’s, it’s definitely taken hit and it’s unfortunate because the, the, the thing that’s really taken to hit are the people that, that wanna get into home ownership. You know, maybe they’ve been saving up for a while, they’re finally ready and all of a sudden they went from three and a half percent mortgages to seven and a half percent mortgages and they’re like going, Well heck, that’s not gonna work for me.

Tracy (25:03):
And, and it would,

Tego (25:05):
But it does work for a lot of people.

Tracy (25:07):
It, it does work for a lot of people. So like we started out with talking about fears, we need to go deeper and really talk to people about their real goals. So when, let’s, let’s go back to this slow down. So when you say we’re down 20% in actual numbers of sales and they’re saying that prices aren’t d appreciating at the same rate, so let’s put that in real,

Tego (25:30):
That’s nationally,

Tracy (25:31):
Right? Real numbers. We go back to beginning of the year to now. Home values in our market are still up

Tego (25:40):
Year over year. Okay, let me give you year over year peak. Okay? If we look at, it’s, it’s end of October, I don’t have the final numbers yet, but October, 2022 home prices are up anywhere from 13 to 17% versus October last year. So the year over year price increases continue at a double digit pace. However, if we go back to May of this year to today, home prices have pretty much stayed even.

Tracy (26:14):
There we go. That’s what I’ve been waiting for you to tell us. Yeah. Yeah. So that was, that was the important sound bite when you hear people around you at Halloween parties or over this weekend hanging out with neighbors trick or treating and things and they’re talking about housing, which people always seem to everywhere we go, I hear people talking around me and how about housing? It’s

Tego (26:35):
Cuz we’re tuned into

Tracy (26:35):
It. Yeah, we hear it. The, the truth is home prices have stopped d appreciating Yep. As of about May, June. Yep. But they’ve leveled out since then and we haven’t seen that drop. But seasonally, Tego every winter we do have a little pullback in pricing. Absolutely. So where we end the year this year as a percentage up over last year will still be considerably up, but maybe not as high up as we were in June.

Tego (27:02):
Yeah. And, and at this point we really won’t be able to judge, you know, if we’re gonna have any substantial pullback in prices in Albuquerque probably until the spring. Yeah. To be honest with you, because we’re gonna, you know, we’re gonna see less activity this time of year. We’re gonna see people that are, you know, that need to sell, reducing price. You know, we’ve seen about 40% of the homes that are on the market in Albuquerque have a price reduction just, just last week of all, of all the homes that are on the market, which sounds high, but actually that’s pretty normal if you go back to 2019 and before now, not compared to 2020 and 2021 because they were kind of just odd markets. <Laugh>, you can’t compare anything to 20 in 2021. But anyway yeah, so, so, so home prices appear to have peaked this year. That’s kind of the headline here. Home prices peaked in May. They’ve been flat ever since. We haven’t really seen any like pullback if, if you will.

Tracy (28:09):
And, and honestly we all, our listeners probably know this because we talk stats all the time and they probably follow you on Twitter, but it’s normal. We peak late spring here and then we kind of have a cycle. And for those of you that get on and look at ti go’s charts, you know that. So there we go. There’s all the information you needed for today.