Albuquerque Home Prices, Supply and Sales Stats
Transcript Snippet: “Tego:
We go, okay. Home prices and supply and sales. So home sales, Tracy, you know, they’ve been down in the last few, let’s just say few months, if we compare, you know, 20, 21 to 2022, and we start comparing the two years, the number of home selling are, are down there. There’s no doubt about it. Just to give you an idea from, let’s see, let me pull up the number here from.do, keep thinking here. Okay. There we go down 15% from June of 2021 to June of 2022, the number of homes selling. So that’s that’s substantial, but there were still 1200, almost 1,250 homes sold in the Albuquerque area. Just, just last month.
Tracy:
That’s a big number, but let’s talk about some of the reasons, you know, I’m, you’re the stat guy and I’m the, what I think the market’s really doing.
Tego:
Yeah. And let me give you the context there. So home sales down 15% compared to price per square foot, I’m gonna do price per square foot. As a, as a comparison are up 17% June this year versus June of last
Tracy:
Year. Interesting. So the two price
Tego:
Sales are down 15% prices are up. Let’s just ballpark 15, 17%.
Tracy:
So when, when I was gonna say I’m the, the feet on the street and what do I think versus what the stats says? So why are we down? Right. So think about the last
Tego:
Sales. You mean sales
Tracy:
Stats. Why, why are sales down? Yeah, not prices. Think about the last few months Tigo and all the news about the interest rates going up and all the doom and gloom noise out there about homes and interest rates. So people, I mean, the cost of buying a home in our market now is up considerably over the last couple of years. So we have priced out certain people from the market and the home prices are up across the board. So we, with higher interest rates, it’s, it’s tough. But in addition, home B home builders are having a hard time closing on those homes. They’ve been building for the last year as a, a side note to that. Well, what, just,
Tego:
Just explain that. What do you mean they’re having time hard time closing on those homes they’ve
Tracy:
Been building. Exactly. So I have a client that mm-hmm, <affirmative> put a house to be built under contract last September. So we’re, you know, 10 months or so in. And that house isn’t done yet as a new construction soon, soon, but you know, it’s almost a year really of getting that lot ready, getting the permits, ready, picking the floor plan and then getting it built. But the builders are having a hard time, you know, it’s taking 10 to 14 months for them to build a house. Some, some of ’em longer mm-hmm <affirmative> and supplies. They, they, you know, they can’t put all that money out front generally to build a house. They usually do that just in time thing where sure. We’re not gonna order the door package till we’re almost to frame or we’re at frame or we’ve got the Sheetrock up or, you know, the window package. We’re not gonna order windows until we have a foundation forward.
Tego:
They’re they’re not doing that
Tracy:
Though, but, but we’re seeing some of it where they’re trying to, you know, be careful about ordering too soon and having the expense out, but not too late that it’s outta stock and they can’t get it. Right. So, so it’s just taking builders. It’s it’s seems it’s lot of procedure.
Tego:
Yeah. But it seems like they would’ve adjusted for that. I mean, this has been going on for two years, over
Tracy:
Two years. Some of them really have adjusted for it. Yeah. And some of ’em once you put a house under contract to be built, not one, that’s what we call a spec home. That’s already under construction. Sure. some of the builders are ordering everything up front and then they’re carrying it and they have to store it and have it ready to be able to build with, which is, you know, expensive for a builder. Well,
Tego:
Absolutely. And the other thing is lumber now has come down. Lumber is still higher than it was in 2019, but, but it’s come down from the, the peaks that we saw in mid pandemic for,
Tracy:
For lumber. It has, but other things have gone up. Exactly. Right. So lumber prices have come down, but it’s kind of the, what’s this week’s building product that’s gone up.
Tego:
And what I’ve been saying to people is, you know, if you’re waiting for home prices for new construction to come down I wouldn’t hold your breath. It, it just doesn’t look like it’s gonna happen. What’s gonna happen is home builders. And we talked about this last week, Tracy is home. Builders are just gonna start let’s say value engineering, their homes, making ’em smaller, you know, cutting, cutting stuff here and there to keep the prices within a, a median range to keep ’em affordable for people that they wanna buy. Right. Okay. Back to the original topic or we’re still on the same topic topic sort of, we kind of sidetracked a little bit,
Tracy:
Like I said, sidebar,
Tego:
A little sidebar. So we were saying, okay, sales are down.
Tracy:
Prices are not,
Tego:
Prices are not. And why, why are prices not if home sales are down, how come prices are not well, it’s, it’s really simple. It’s still all about supply and demand. It always is always will be, you know, the, the, yes, demand has come down in the last, let’s say three months with, with the interest rates, it’s definitely pushed some people out of the market. The, the, the affordability has taken a hit, no doubt about it because of interest rates and just the, the, the big appreciation we’ve had in a couple years. So, so yes, demand is still has pulled back. Some supply has started to increase ever so slightly. In fact, I just did an analysis in what I found is that I went back to 2007. So in 2007, we saw year over year increase in inventory about 400%. Wow. and then starting somewhere in about 20 2009 we saw overall a decrease in the number of homes coming on, or number of homes available in Albuquerque year over year for, for the longest time.
Tego:
So we’ve been on this decline in the number of homes on the market. So Tracy, I’m looking at the chart here, you know, you can see it, but we’ve, we’ve had a decrease in a number of homes on the market in Albuquerque, starting in about 2012. And it’s continued to decline all the way up until may of 2022. So in the last two months, we’ve started to have annual increases in the number of homes on the market first time in the longest time, but we’re still ridiculously, you know, low compared to what would be considered a normal market.
Tracy:
And if you’re listening and you’d like to see the chart that we’re looking at, yeah. Just email call. We can send it to you. We’d be happy to,
Tego:
Or just call me. You wanna talk market. If you, if the media call me, if you wanna talk about real estate, I love doing that stuff.