Tego Venturi:

I want to talk about interest rates because it was an interesting week with interest rates. You know, we saw the biggest weekly move in interest rates in the law in a long time. You know, the thing that’s funny about it. We were on with Chris Cooper from Bay equity. Who’s one of our lenders that, you know, local lender here that we work with that that’s excellent. He watches that interest rate stuff like nobody else. What were some of your takeaways when, when he talked to our team here the other day, Jane,

Jane Elizabeth:

I think the biggest takeaway is that even at 3%, which is pretty amazing, we’re still in absolutely Epic, low interest rates and the affordability.

Tego Venturi:

Well, it was funny. We were joking. They went from 275 to 3 for a lot of people. It’s like, Oh my gosh. Yeah.

Jane Elizabeth:

I think just that they went up was a little bit nerve wracking because we watched gas prices go up and now interest rates are going up and wondering if it’s an overall trend, we can’t help but ask that. But yeah, interest rates

Tego Venturi:

The one thing he said, and I think people need to think about that as if they’ve gotten a pre-approval

Speaker 2:

That’s right. Yeah. That if someone got pre-approved for a loan last week, that they need to check back in, because if they got pre-approved at the real top end of their ability to qualify, they may not qualify even with a quarter percent increase in the interest rate.

Tego Venturi:

And we’re not talking about qualifying overall, we’re talking about for a certain price point. Right. Cause now they’re what they can afford. Might have gone down a little bit, right. Again, talking a quarter point here, but it’s, it’s amazing. One of the things that I looked at this this week, Jane was predictions about interest rates, all the experts, all the housing economists, all that stuff. And

Jane Elizabeth:

What are they saying? The million dollar question

Tego Venturi:

Experts with air quotes, right? Because I think 2020 was a year of not believing the experts anymore, but sorry, I’m not going to get political here, but anyway,

Jane Elizabeth:

Everyone’s got a motive behind their opinion,

Tego Venturi:

But you know, basically what we, what we looked at, the, the group I work with that pulls this data together is we looked at what Freddie Mac said, Fannie May said, which home home, not home builders, mortgage bankers association, and the national association of realtors and, and, and all of them, if you were to just take all of them and look at them, they’re saying probably by the end of the year, we’re going to be a little bit over 3. Right. And that’s, that’s it. Now another group that I followed John Burns consulting there, they looked out to 2024 and they’re putting a 3.6 on 2024 interest rates point is nobody’s expecting a huge change in interest rates. And we there’s good chance. I saw some economists talking, there’s a good chance. We’ll never see six, 7% interest rates again, which, you know, it’s again, it’s that whole new normal thing. Right. And that could be interesting because as you know, it’s effect affected or affordability, even though home prices have gone up, correct? Jane and we only had a couple of minutes left. Cause we, we talked about,uHB one 11, which was super important. I want to just talk about pre-inspections and what’s your, your feeling. If you’re getting ready to sell your home and somebody says, Hey, should I get a pre-inspection? What do you, what do you say?

Jane Elizabeth:

I say, it’s a great idea for a lot of reasons. One of the reasons is when things are going so fast and we’re asking buyers to make quick decisions, it’s so wonderful for the buyers to have an inspection that they can look over. And it’s really like a seal of approval for the sellers too. And it says we don’t have anything to hide. This is what we’ve got. And it also helps the seller not be negotiating in a black hole. Roofs are the, probably the number one reason that deals fall out of contract. And a lot of people, they don’t even look at their roof. They might’ve moved here from another market and they don’t know that even a tile roof needs to be sealed, you know, every couple years. And so to find out after you’re already under contract two weeks, that maybe you need to put a new roof on the house. That’s a hard pill to swallow when you’re already under contract at a certain price. So don’t negotiate in a black hole when you consider the value of your home versus a 350,000, sorry, $350 inspection. It’s well worth it.

Tego Venturi:

A hundred percent, and again, I think in this market, even even more so, because you’ve got a great home, it looks good. It shows, well, it markets, well, we do great photography. We do all this stuff. We do, we get it out there and you’ve got 20 offers or 10 offers. Let’s say, let’s be a little more realistic. You wanna, you know, if you have that done, it just puts you in a much stronger position

Jane Elizabeth:

It sure does. And one of the things that, that, that is common in such a fast market, I mean, buyers are making, again such quick decisions and there’s this, you know, the next morning they wake up and say, Oh my gosh, did I do the right thing?

Tego Venturi:

Yeah. You get in that auction mindset, right. And then you have remorse.

Jane Elizabeth:

We have buyer’s regret. And so if you find out that the roof is bad, you think, Oh, it was a bad decision. It just confirms that you may be decided too quickly. And so we do everything we can to minimize that follow-up rate in how we market and how we accept offers.

Tego Venturi:

Yeah. Yeah. The other thing is the little known thing that, that we do offer is, or at least have available for sellers is warranty a warranty during the listing period. Do you want to speak to that?

Jane Elizabeth:

Yeah, absolutely. It’s something that maybe it’s a tool that we’re just starting to harness and for our sellers, but anytime, while they’re listed, which isn’t usually very long with the average house selling across the board in less than five days. And, and then that, that warranty also covers the whole pending period. So if the dishwasher goes out, thank goodness, they’ve got a, they’ve got a small co-pay and they can get a new dishwasher for at $75. I believe

Tego Venturi:

Seventy-Five dollars. It’s such again, it’s one of those peace of mind things. That’s very little investment for a whole lot of peace of mind.

Jane Elizabeth:

We need to do that for all our properties.

 

Tego Venturi:

And I just want to hear some, some stories, Jane, you’ve got some stories about what buyers and sellers are going through these days. Can you share something with us that you’re experiencing? Thank you. Hold on. I got to cue it up. I always do that to Tracy. That’s like, I go, I go, okay, wait, wait, but let me queue it up. If you don’t know, our market is like, unlike any market we’ve ever seen super low number of homes on the market and a lot of buyers, high buyer demand by low seller supply. That’s kind of what we’re dealing with, right?

Jane Elizabeth:

Yeah, absolutely. It’s a really fun market. Very fun unprecedented. The stories I helped buyers and sellers and the thing that is most noteworthy to me is I talk with people who want to sell. Usually the first time I sit down and meet with them, their jaw dropped. When I tell them it’s not a matter of, if your house is going to sell, it’s a matter of when and how much, how much we’re going to get for it. And that’s amazing. And it’s crazy to be talking like that because I started in 2008, 2009, and we all know what that was like. So that’s been really amazing to be able to help sellers finally get what their houses, maybe they paid for them back in 2006 and maybe even a little bit more just to

Tego Venturi:

Way more. I mean, in, unless they just let it go away, then they definitely are getting more than, than even the top of the market in, in Oh six. And so what are you doing? Like you’re, you’re S you’re listing a home and you’re getting multiple offers, right?

Jane Elizabeth:

We can’t give away all our secrets. But we’re very, very thoughtful. Again, it’s going to sell, you know, you have to really have a a really bad property for it not to sell right now. It’s gonna sell. But we’re doing very strategic things. I always say that we get this, I won’t give away. We get Cinderella ready for the ball. Right? If Cinderella went to the ball with ashes and sack cloth or whatever she wouldn’t have gotten picked by the Prince. You know, she might’ve gotten picked by the housekeeping staff.

Tego Venturi:

She might’ve gotten picked, but you probably wouldn’t got top dollar. I know analogy gets a

Tego Venturi:

Little weird analogy, but anyway

Jane Elizabeth:

Because you can, you can throw anything at the market. But it’s really important to be very intentional about how, how you prepare the house and then how we market it. We’ve got a lot of things that we do that really help everyone have an equal advantage of bidding on the property. It’s the market

Tego Venturi:

Talk about the buyer, but Damon, I want to hear about property management, what you guys are seeing again, you know, I know I rented one of the homes we own here a month or so ago. And I mean, it was, my phone just blew up, rented it out. I mean, like it, like people that wanted to rent it, I had literally people on the phone crying, begging me to rent them the home. They couldn’t find anything. Are you seeing the same thing? We are seeing the exact same thing we’re seeing, you know, you know, our, our nicer properties are, you know, rents are increasing and we’re getting, you know, multiple phone calls that, you know, within minutes of the time we S we post them before they’re even, you know, vacated yet. You know, lot of people, you know, renting site and seam you know, last year we were, we were kind of at the beginning of the shutdown, we were thinking that we had this inventory that was going to sit for awhile.

Damon Maddox:

People realizing they can, you know, co you know, telecommute and work from home. You know, they can come to our beautiful city, you know, cost of living is so much cheaper, you know, they’re willing to spend, you know, that extra money for, you know, a four bedroom. So they have one designated office space and they really only needed two or three bedrooms and, and all of that yard space. So we’re seeing those homes go super quickly. Yep. What about, what about on the, you know, I know you do have some older apartment buildings and stuff that you guys have a little, little lower price point. I mean, what do you seen in that market? Well, you even, those were, they they’ve the, the, the pricing has creeped up, but we do a lot of stuff around the university area. Yeah. Those kind of, that, you know, first semester of, of the shutdown, those kind of sat vacant for awhile. Um, but you know, then, you know, students started coming back, um, and, and, you know, they’re, they’re all pretty full now where we are seeing the same issue that you guys have on the sales side, where low inventory. Um, and so people are jumping on, on what they, you know, what they see as soon as it gets online.

Tego Venturi:

Yeah. Yeah. How many, just curious, how many properties do you have in your portfolio that you, that you help people with? We manage 788 doors. Yep. Roughly 500 properties. We do everything from single family homes up to up to 20 unit complexes. We don’t do any of the, you know, those giant, you know, 80, 160 units, you know, monstrosities, that’s a little out of my wheelhouse and that’s, that’s a whole different niche. Right? You’ve got your niche. And I mean, obviously you guys have built a reputation in town for years and years. You know, like you said, your family has been in the business 45 years, you said 45 years scenario of the year I was born your dad, your dad is a amazing guy. And with the stuff he’s done for our industry, and I think most people will just never know what he’s done, so we appreciate it.

 

Tego Venturi:

Well, there’s two bills right now that are working or we’re trying to work their way through. Oh, there’s Damon. So perfect timing. Let me talk about HB-19 first. So HB-19 was a, or in Damon, correct me if I’m wrong, but HB-19 got postponed. Correct. Is what I understand. Yeah. And I’ll introduce you in a minute, Damon, but so HB 19 was they were trying to put a transfer tax on real estate sales. So basically wanted to tax you when you sell or buy a property. And at this point that one has been shot down. So thank goodness for that. But anyway, Damon, Maddox, medics management, if you’ve been around Albuquerque Ben and you know, around the city, you’ve probably seen Maddox manage it. Mint signs. I mean, God’s statement. How long has your family been in the real estate business?

Damon Maddox:

45 years.

Tego Venturi:

Yeah. There you go. So you guys are kind of legendary in Albuquerque and especially on the property management side. But your, your father has done so much in yourself so much for the real estate world and real estate industry. So thank you for that. But the reason I got you on Damon is we want to talk about HB 1-11 which is, which is out there right now. And so first off, Damon, if somebody wants to reach out to you talk about private property management, how do they get ahold of you?

Damon Maddox:

They give us a call here Maddox management, (505) 242-0989. Or visit our website MaddoxMGMT.com.

Tego Venturi:

Awesome. Tell us about HB 1-11.

Damon Maddox:

So HB 1-11 it’s revamping the uniform owner resident relations act which is, you know, the landlord tenant laws for the state of New Mexico. It’s definitely something that needs to be looked at from time to time. You know, we, we, last time it was revised was almost 20 years ago. So when we heard that, you know, something was coming along, we, you know, we weren’t you know, it was, it didn’t catch us off guard, but when we finally saw the actual bill that they’re proposing the changes they’re proposing there’s a lot of unintended consequences.

Tego Venturi:

That was one of my takeaways when I saw it, I started going through it going, Oh my gosh, this is going to backfire especially on, you know, what I would consider some of the, you know, the, the people on the margins, both as property owners, as well as potential tenants and, and stuff. I don’t know, is that, was that your take?

Damon Maddox:

That was definitely my take, you know their, their intent is to help grow the workforce housing help us you know, the industry combat the, you know you know, homeless issue that we have in our state in particular, in our bigger cities, but the way they’re trying to go about it is, is just, it’s, it’s going to cause much bigger problems than, than it’s not going to fix what they’re trying to fix. Yeah.

Tego Venturi:

So, give us just a, some of the proposals that are out there that, that concern the property management community and landlord,

Damon Maddox:

The big concerns that we’re having with, with the, these changes is the amount of time for, for an eviction both for nonpayment of rent and, and for lease violations right now start to finish, you know, it can take about 28 days to, to go through that whole process from the time you serve that, that first notice if this passes it’s, you know, 56 days for you know, for an eviction process for, for, you know, somebody that’s been destroying the property, you know violation other than non-payment of rent. They’re, they’re taking that initial seven day notice and making it a 14 day notice, and you’ve got to do that twice before you can even, you know, file with the courts. Wow. the other, you know notable things that they want is they they’re, they’re adding they want to add a source of income as a protected class. Which, you know, it in and of itself is not a bad thing. Right.

Tego Venturi:

Sounds good. On the surface. Yeah.

Damon Maddox:

When, when you’re, when you’re forcing when Lords to, to take the, a section eight vouchers you’re essentially, you know, stifling the, the amount of rent that they can collect and, you know, it’s more, almost like a rent freeze for them.

Tego Venturi:

So wait, wait, wait. So this bill proposes that landlords, if somebody comes with a section eight voucher, which if anybody in the world, you know, they know what that is. So that’s somebody low income, they get a voucher to help supplement their, their rent. Correct. But they’re saying that landlords can’t deny somebody because they’re on a voucher plan. That is correct. Interesting.

Damon Maddox:

You know, so provided they meet all the other criteria. They, they, they have to accept the voucher as a company we work with these voucher programs and in this, the city run, the government run programs are, you know, wonderful to work with of the issue that we have sometimes is with the the nonprofits that are, you know, offering these vouchers. They don’t train their, their, their, their clients, their tenants, the whole process. They, they don’t you know, follow up on inspections like the government run wants to do. So I have some owners that do not want to take vouchers, you know, for that reason. Well, you know, you have great programs, you know, Bernalillo County housing. They inspect their properties, you know, and their clients they help us as, as property managers, make sure that, you know, the, the tenants not destroying the place that they’re, you know, doing what they have to do to stay in their program. And same thing with the city of Albuquerque housing. But some of the nonprofit ones do not, some of them are great and some of them are not. And to have to force an owner to accept all of them would, would be a detriment. I think, let me ask this, what’s the status. I mean,

Tego Venturi:

You and I talked to here earlier, but what’s the status of the bill right now?

Damon Maddox:

So the bill was in the judiciary committee last week. It was a sense back to, to have some revisions done to the bill. Some of the things that you know, we’re asked for that we, you know, we, we asked some changes to be made and they just released yesterday a new version of the bill, but it’s pretty close to the first version. Got it. So, we’ll see what it does in, in the dish judiciary committee, when it goes back to, for a vote,

Tego Venturi:

What is the property management community asking from the legislature?

Damon Maddox:

Well, first we were asking for a seat at this table you know, we were not invited to help work on this legislation really, if they simply asked us to, you know, we could point out, you know, the, the things that, where they’re trying to get something to work correctly, we let them know exactly, you know, where that needs to change. And we we’d love for it to be a two-way street. Yeah. Eddie, do you have any questions on this?

Eddie Aragon:

No, I don’t. I think it’s pretty straightforward and he’s pretty much staying on top of it. So it’s very interesting how bad this will impact. I think all of the real estate industry, I think it totally, it takes away any and all investment in real estate going forward, which I think is really concerning for, for everybody. You know, I think the biggest problem that comes in as being a former practitioner of, of real estate is this literally gets rid of those LLCs of people who were investing in properties were reshaping properties and doing all that type of thing. So, you know, for a company, and this is what’s really stressing me out is getting the Maddox company whose names are basically number one, when it comes to a residential property management, you know, this sort of puts them out of business and they’ve got to now increase their cashflow probably two to three months just to accommodate the new rules because managing on the side of the tenants and, you know, that’s not unfortunate, that’s in my opinion, that’s criminal and it’s, I think it’s it’s just really bad to go.

Tego Venturi:

Hey, Damon, tell Eddie what you told me earlier about the investors coming into New Mexico and what your, one of your concerns.

Damon Maddox:

Well, so yeah, my that’s exactly right. My biggest concern, what I see right now, we have lots of investors coming in from California, from New York, and they’re investing in our communities and, and buying up some properties and turning them around. And they always tell me that they’re coming to New Mexico because our laws aren’t as strict as, as California or New York. And these changes put us in line with California in New York. So you’re going to see less people wanting to come in at best.

Tego Venturi:

Obviously we want to make it clear, like, we’re we, we want, you know, a tenant. I mean, th the reality is right now, if tenants don’t do what they’re supposed to do, I mean, it’s still a long process to, to make the landlord whole correct. Or sometimes the landlord never gets made whole.

Speaker 2:

That is correct. It, it is. And, and I completely agree with you. If you go, we have an issue with workforce housing that you to solve, and everybody deserves to live somewhere and have a good you know, place to live, but not at the expense of you know, of these investors or these people that are putting their hard earned money in, into, into our communities.

Eddie Aragon:

Well, one of the things that occurred to me is that everyone has their stories. Everyone has their ideas about, Oh, you know, I’ve been impacted by COVID, but one of the things that happens ultimately, and Ben knows is probably a better than our Damon knows this better than anybody. And that’s the fact that, yeah, you know, stories will keep turning into more stories, into more stories. And ultimately if you’re having to pick up the phone to call a Constable, just to kind of evict your tenant there’s going to be significant damage inside. And not only is there no respect between tenant and landlord, which all of the laws now are really weighted towards, especially if this passes towards the towards the tenant. But I mean, you’re going to be dealing with real, huge repairs and remodeling every single time you have a tenant.

Eddie Aragon:

And, you know, could we do a minimum of three years on a, on a lease with no going out first month, last month, and a first two months in, I mean, I think the landlords are going to be forced to turn this into something that’s not even marketable because it’s going to be cheaper to get into a house to purchase than it is going to be able to rent. And, you know, our escalations have been tremendous here in this market. And on the landlord side, I’d say, that’s good, but you’ve had rent escalators somewhere between seven to 10% to go into amen. And that makes it really healthy for the investors from outside the market to say, Hey, you know what? This is a very affordable place to live. We can get in at a good rate and there’s still lots of room housing affordability is at an all time high, but these people just want to rent for whatever reason. And that’s just going to completely wipe out. And then I do mean wipe out an estimate. I think the rental market, and it’ll happen over a trickle-down effect over the next three to five years where people are just making the determination that, Hey, unless we have your first, last month and next of kin sign on the dotted line, you ain’t renting from us. And then no one’s going to rent. I think

Tego Venturi:

You just, you just nailed it, Eddie. And that’s the thing is this type of bill it’s going to hurt the people on the margins of most. So you think about obviously the, the, the renter, that’s got a low credit score that’s maybe on a voucher or whatever it is they’re going to get looked at even more. They’re going to be scrutinized even more. But then the other, the other side is Damon. What was the number? How many people in New Mexico that are landlords are just small mom and pop own a couple properties, right? Those are the people that are going to get hurt. It’s not the big, huge corporate, you know apartment owners, right. They got deep pockets. They can absorb it, but you know, that little mom and pop guy that owns a couple of rental properties and they can’t get rent for two or three months that that’s the people that’s going to hurt. Yeah. They’re already being hurt. Yeah. And they’re already,

Damon Maddox:

And a majority of, of, of our clients, I’d say, you know, I, I don’t know about the entire state, but I’d say, you know, 80% of our clients are mom and pop, you know, single investors, some of them, you know, they’ve, they’ve inherited property. You know, I’ve, I’ve got several widows. This is their, their retirement income, you know, they, they invested with their husbands. And you know, now that this is their retirement. So when they can’t get rent for two or three months, I mean, that’s, that’s their monthly income that they’re hoping to pay their own bills with.

Tego Venturi:

That’s a great point. That’s a great point.

 

Tracy Venturi:

Let’s talk about forebearance. I want to get to that topic. So that’s been a big topic.

Tego Venturi:

It’s a hard topic. Okay. It’s funny. I’ve, I’ve gone to the chiropractor. I went to the eye doctor in every time I end up just in the last few weeks and every time I end up talking about real estate, right. Oh, tell me about this and tell me once they hear my name.

Tracy Venturi:

I think it’s going to be this big deal. So if somebody is coming out of forbearance Tego,

Tego Venturi:

I wanna just talk about some stats, if I may I find me well, yeah. Picking up on your sarcasm.

Tracy Venturi:

No, no, I love it. That you would know stats.

Tego Venturi:

Well, one of the things that’s, that’s been, um, going on is, yeah. I mean, back at the beginning of the pandemic, there were over 5 million people that took a forbearance plan. And so what that means is they, they went to their lender and said, Hey, can’t make my payment because of COVID. And I need to just put a pause on my mortgage payment. So there was over 5 million. Well now we’re down to about 2.7 million. Again, we’re talking nationwide obviously. And that’s good. The thing is interesting is of those people that have come off of that program over 3 million, 52% of them just basically they’re paid up, right? They either started making payments or they refinanced, or they sold their home.

Tracy Venturi:

Or they continue to make payments while they filed for forbearance, because they weren’t sure if they were going to be able to keep paying their payment, but they were able to.

Tego Venturi:

You know, a lot of those people were probably people that took the forbearance plan thinking, eh, you know, we’ll just do it just in case, you know, it’s kind of, there was obviously, there was a lot of, um, a lot of mystery back in March and April of last year. And so people just did it. So, and the rest of those, not the rest, but a third of those, um, they basically just said, well, we’re going to work something out. So they’re actually working out something with the bank, a repayment plan. Yep.

Tracy Venturi:

That could be that whatever they didn’t pay, if they actually did skip some payments that they tacked it onto the end of their loan, or they’ve done sort of some sort of repayment plan that they can afford temporarily or, you know. So that’s upon exiting the forbearance plan. Another 33% have a repayment plan. 52% of them are paid in full. What about the other 15%?

Tego Venturi:

The other 15% are in, are in trouble. Right. They’re in some sort of loss mitigation plan. So either they’re basically not making their payments so they could either just sell their home if they got the equity or if they don’t have the equity, then you know, the very last thing would be, it would go into foreclosure.

Tracy Venturi:

Well, they could go to short sale first and sell their home. Right? So we, we negotiate with lenders on behalf of sellers that, ask them if they can’t afford to sell their home, because it’s not worth enough to pay off the underlying mortgage. We work with the sellers to negotiate, to have the lender take short, what they’re owed so that we can get the home sold versus going into foreclosure.

Tego Venturi:

I kind of erased short-sale from my mind, because back in 2009, 2010, we did a fair amount of them. And they were really difficult back then because the bank, there were so many of those properties, the banks weren’t geared up for it. Now it’s actually a, it’s a much easier process. So that’s, again, that’s one of those options for people that do find themselves, you know, in that, that group of people. I want to just one more comment I want to make, I think it’s important. The narrative out there has been that if you’re in all those people, the 2.7 million people that are still in forbearance, those are automatically going to be foreclosures and get dumped on the market. And we’re going to have this mass flow of homes coming on the market. And that is just not, what’s going to happen. Come March, April we’ll know because a lot of those plans will expire. And again, so people could, you know, they could just, if they’re financially able, they’ll just start making their payments and just move on. They’ll work it out with the bank.

Tracy Venturi:

Can I just add in there that, you know, New Mexico is behind the curve on people getting back to work because our restaurants just opened indoors at 25%. Right. But a lot of the country have gotten back to work compared to New Mexico. So we kind of think about New Mexico and how many people are still out of work because of our climate here. But you know, much of the country is back to work so that 15% will change. But go ahead.

Tego Venturi:

Well, and I just wanted to bring you into this conversation, but let me just, just follow up on that. So these people that are still going to be coming out, or if you’re one of them coming out of this forbearance plan, you’re not sure what to do. There’s, you know, there’s options. And so again, just assuming that just because somebody is in forebearance, it’s going to end up in foreclosure and be a bank sale, that’s just not true. There’s going to be people that have equity and can just sell or take the short sale option or you know, whatever it is. And so

Tracy Venturi:

I would say really have a private conversation with us to talk about the options, right?

Tego Venturi:

That’s exactly what I was getting to. So Tracy, you know, if somebody is in a forbearance situation, they want to know what their options are outside of what the bank is offering them,

Tracy Venturi:

Call us, let’s sit down, let’s have a private conversation, look at your situation and see how we can best help you with whatever direction you need to go.

 

Tego Venturi:

Tracy, I want to talk about affordability.

Tracy Venturi:

Changing the topic quickly.

Tego Venturi:

I’m changing the topic quickly.

Tego Venturi:

It’s interesting, cause there’s been a lot of stories out there talking about affordable housing and that is a conversation that needs to be,

Tracy Venturi:

That’s very different from affordability.

Tego Venturi:

Correct. Affordability, you know, when we’re talking about homes and in specifically compared to historically, so Tracy, there was a story that came out and a lot of people are seeing these headlines, Oh, there’s no affordable housing. And so all of a sudden they think, well, homes are not affordable. The reality is that homes are actually comparatively very affordable historically.

Tracy Venturi:

Totally. When you think about how much of somebody’s typical income needs to go towards housing these days, it’s very low compared to historical, you know, your percentage of how much you earn that goes towards housing has become much better.

Tego Venturi:

I got a stat for that. So there’s a couple of different things you can look at. So there’s, there’s this, National Association of Realtor does a whole housing affordability index. They’ve been doing it for a long time. If you go back to 1990 is the chart I have. And what they look at is, you know, the whole package, they’re not looking at just prices of home. They’re looking at they’re accounting for mortgage rates, they’re accounting for income. So they’re looking at median income versus what homes costs versus what the payments are, including insurances and taxes and everything. And the thing that’s fascinating is 2020 was let’s see one back to 1990. It is the fourth or fifth most affordable, year, the only years where it was more affordable where the, the post recession. So, you know, 2009, 2010, 2011, 2012, right? Those were the good years, right? We should have all bought more homes back then, right? Just like we all should have bought Bitcoin five years ago, but don’t get me started.

Tracy Venturi:

Hopefully when we used to talk about it a lot, some of the people that we mentioned it to did buy it and still hold it because.

Tego Venturi:

When we were doing the show, remember Tracy? We were doing the show back in, when did we start the show? Was it 2010? I don’t remember.

Tracy Venturi:

It’s been seven plus years. So 13, 14,

Tego Venturi:

And at the time we were saying, it’s the buyer’s market. It’s time to buy it’s time to buy.

Tracy Venturi:

That was a tough time to buy though because there wasn’t lending programs, right? The lending was very difficult because a lot of the mortgage programs had gone away.

Tego Venturi:

I’m gonna push back on that, the easy lending had gone away. But the people that could actually pay had no problem qualifying, right? It was just that the easy program went away.

Tracy Venturi:

All of the unique programs that catered to different scenarios were not in place. So,

Tego Venturi:

And the reality is those programs for the most part have not come back. A lot of those programs, you know, helps create the housing bubble back in 2008. So anyway, we’re getting way off track here, affordability. So the reality is, you know, right now affordability is at a very historic low. And also if you look at another piece of data, it’s a percentage of income needed for a mortgage payment. It decreased drastically in 2020. So historic norm is about 21%, 22% of your income toward your housing. And that could be rent. That could be, you know, a mortgage, however, so 21% as of right now, we’re at 14.9, 15%. So it’s a huge decrease in the affordability, even though home prices have come up.

Tracy Venturi:

So what’s helping that Tego is that interest rates are so low, you can afford more house. So because home prices are up, you can still afford them because of the lower interest rates.

Tego Venturi:

Yeah, absolutely. And so I just want to talk about that and just one other chart to talk about as the typical mortgage payment in, in 2020, they were saying it was $826. That’s just adjusted principal interest. And that’s, you know, for a very average home, right. In 2006, it was $1,300, right? So it’s substantial difference, right?

Tracy Venturi:

Interest rates were about seven and a half percent then because when I was a newly licensed realtor in 2002, we were typically in that seven and a half percent range. And then a few years later when we got better, it was seven. So, you know, sometimes we’d be in that seven, seven and a half range through 2006 as my recollection.

Tego Venturi:

So the takeaway is don’t make a decision based on a headline that says home prices are going up and, you know, they’re up this much from last year or whatever, right. Or you see a headline that said, there’s no of affordable housing on the market. Again, affordable housing is an issue. You know, we look at the Albuquerque market right now. I mean, how many homes in Albuquerque right now, Tracy you’re in the MLS are on the market under 200,000. It’s gotta be less than, it’s gotta be a few hundred, right? And so, you know, that is a challenge. There are less lower price homes on the market without a doubt.

 

Tracy Venturi:

Let’s talk about falling in love with your house, or maybe you have fallen out of love with your house. You know, we’ve been spending a lot more time home this past year and like Eddie just said, maybe we get to spend a little less time in our home, but we now know what it’s like to be home a lot.

Tego Venturi:

Well, it’s interesting because like Eddie said in the opening, there is, you know, 20, 20 redefined the meaning of home. And what does home mean? You know, it’s not just a house, it’s not just a piece of real estate, although many times in our business. And unfortunately it can get kind of mechanical like that, but it isn’t, I mean, a home has a lot behind it, right?

Tracy Venturi:

You know, it really does. And there’s a lot of satisfaction in home ownership and, and part of why it’s easy to fall in love with home ownership. Okay. So we can talk about all of the financial reasons to love being a homeowner. Right. We know it’s the single most important way people build wealth.

Tego Venturi:

Let’s see, I had to get the right side. That’s the left brain. Right? So it’s it’s yeah. It’s the left brain, right? It’s the, it’s the logical. It’s the engineer, the engineer brain. Let’s put it that way, right?

Tracy Venturi:

There’s a lot of, yeah. Solid sound reasons. Financial reasons. Why to be a homeowner. When, when we talk to people who have owned a home for a few years and they realize how much equity they’ve built wealth built into their family’s financial picture, it’s huge. But there’s other things about being a homeowner, right? So it’s the security comfort stability of being a homeowner, right? You know where you’re going to be. You don’t have that. Will the landlord decide to sell the house or will the apartment complex be raising my rent?

Tego Venturi:

Well, if I want to paint my bedroom’s purple, can I just do that?

Tracy Venturi:

The other thing is the house is uniquely yours. Like you said, if you want to paint your room purple, go find your own house to live in Tego. But you know, you still have to deal with that. The house is uniquely yours and you can decorate it, how you want. You can change it. You can remove walls, you can remodel. You can do different things in your yard and your fencing and it’s yours.

Tego Venturi:

Well, and I know so many people and will, will resonate with this is I, you know, there’s certain projects that we do around the house that are just kind of like this meditative zen kind of thing, right? Mowing the lawn, doing yard work. I know, I know people go, well, that’s work. It’s like, well, no, it didn’t. It depends what type of work you do. But sometimes just doing some physical work is, is great. And it’s therapeutic. And I like it. I know that’s, I’m doing all left. I’m left brain, your right brain

Tracy Venturi:

Sort of ironic that you would say that yesterday afternoon I was cleaning the yard from all of our dogs and it was like beautiful. It was like 64.

Tego Venturi:

Like they didn’t, they didn’t mow the lawn. Is that what you’re talking about?

Tracy Venturi:

No. I was picking up after our three dogs and something you wouldn’t know anything about. I can’t relate at all. I find it sort of cathartic. Like you said, the dogs are outside, they like that I’m outside. It was a beautiful day. It felt very rewarding for me. But anyway, and today was trash day, so it’s all gone

Tego Venturi:

And you’re already wearing a mask. So it was all good. No masks, no mask in the yard. Yeah. Got it. Yeah.

Tracy Venturi:

So so anyway, then there’s the whole wealth building thing. But the other thing that I think we haven’t talked about much Tego when it comes to being a homeowner is your sense of community, right? That you’re a part of something. You have some vested interest in knowing your neighbors. And when you go to the park meeting people, when you’re out on walks, it’s, it’s your community, you’re paying attention. You’re more security aware for your neighbors and things and, and maintaining it. And then it’s something to be proud of. Right? Home ownership is definitely something it’s a big accomplishment and something to be proud of. And I love it. We had this meeting this morning with our team and we had some conversations about some, some feedback we’d gotten from recent home buyers. Right. And some of the testimonials that came through this week, we read out loud and it was, you know, those awesome heartwarming stories about how they’ve dreamed about being in a home. And it’s like, I can’t believe this happened. And you were a part of it. And we, we never thought we could own a home. And with all the hand-holding from the lender and you as my realtor, it was sort of our love story meeting, right? So we were, we were reading some of the love stories back to us for being a part of this important part of their lives. And it was really touching.

Tego Venturi:

Yeah. And sometimes, you know, the first time home buyers can be really satisfying too, because again, it’s people that maybe never thought they would be a homeowner are now a homeowner. And, and we were talking about this whole idea, you know, we get, we get a lot of calls Tracy from people looking for rental properties. And, you know, we don’t deal in rental properties and just, just the way the market is, it just doesn’t work that way for us. But there are companies that specialize in property management. Right. Right.

Tracy Venturi:

I was going to say, we often give them resources to help them find rentals. And sometimes we do know about rentals that might be available, but it’s not our specialty.

Tego Venturi:

And of course when those people call in, we always say, you know, have you thought about owning a home? And you know, I mean, that’s what we do. Right. And, you know, educate people. And many times people say, well, no, I can’t afford it. Or my credit’s no good or yeah, this and that. And I think there’s perceptions out there about what it could take for some of those people, you know, there’s programs out there right now, if somebody has a 580 credit score, they may, may be able to qualify to purchase a home right now, finding a home. That’s a different conversation. And that’s, that’s just in the market we’re in right now, but I’m talking big picture. There are programs. And then even people with bad credit scores, right? There’s help

Tracy Venturi:

There is we know of a, a really great program.

Tego Venturi:

And of course, Michael Trujillo comes on after us. And that’s what he does. Right. It’s helped people with the credit score,

Tracy Venturi:

There’s ways to get your credit scores up and get you in a home. And we know of a new home builder who will sign a contract with you to buy a house that might be under construction and still be three to six months from being built or completed the build. And they will still go under contract with you. If they look at your credit score and can see that you’re going to be able to get it raised up in time, to close on that new construction. So some awesome things and, you know, lots of reasons to talk to us and find out if there’s a way for you to become a homeowner. So give us a ring. As you know, we have a team, a lot of great realtors that work with us to help you with either home buying or home selling u448-8888 is our number. We try to answer it every day of the week. So depends on when you’re listening, but we’re, we really are. Our goal is to answer it, even if it’s six o’clock on a Friday night. So

Tego Venturi:

Fall in love with your home, you know just one last comment on this whole concept of falling in love with your home. How many times Tracy, have we seen people that are just like frustrated with their home? It’s not working for them quite right and they decide to sell it. And then they start doing a bunch of work to get it ready to sell, or they may be bringing a interior designer stager to help them kind of rearrange their furniture, maybe get some new furniture. And then all of a sudden, they go, Oh my gosh, I really love this house. I should own this house. And so I just, you know, obviously we’d love to help people sell homes, but I mean, think about that. Right? So that

Tracy Venturi:

TV show, Love it or list it

Tego Venturi:

That’s the concept, right?

Tracy Venturi:

Oh. And the, the one person goes in and helps them redo their current home so that they will love it. Right. but when you have fallen out of love with your home and this past year, I know a lot of people have fallen out of love with their home. It’s not meeting their needs for how they live now. You know, it’s the best time to call us, talk about putting a strategy together to get your home sold and get you top dollar, because the way we market it is, you know, really top-notch, we’re not going to just do it halfway, right? So anyway, it’s a, it’s a great time. We’re in well, February, but it’s going to be a kind of crummy weekend. I bet a lot of people will stay home.

Tego Venturi:

Light the fire fire that you’ve never used in New Mexico Valentine’s party at home. Little candlelight dinner Tego. Yeah. There you go.

 

Tego Venturi: I’ve heard this and I don’t know why this keeps coming up, but why people think you need 20% down to buy a home?

Tracy Venturi: You know, I heard people this week, somebody on our team asked the rest of them, said, how do I tell somebody, no, you don’t need 20% down to buy a home. And I’m like, really people still think that, and this was millennial, this was millennials that felt like you couldn’t buy without 20% down. And it wasn’t wise, even if you could buy with less than 20% down,

Tego Venturi: If you’re a fan of Dave Ramsey. And obviously the financial guy, I mean, he, I mean, that’s his thing, right? He says, put 20% down and do a 15 year mortgage. Now, I don’t know if he still believes that with a 3% interest rate, the money is so cheap. I mean,

Tracy Venturi: Yeah. He doesn’t believe in debt. He doesn’t, he doesn’t believe in debt or credit cards. Right. So it depends on who you’re listening to.

Tego Venturi: Part of his thinking is he deals with so many people that get themselves in trouble with debt. That may be that’s part of his paradigm.

Tracy Venturi: I think he realizes there are a lot of people who can’t manage a credit card or finances. And so they just have to like, not, it’s just cut it, cut it all off and pay it all down. And don’t open up credit cards again or have debt, however, with interest rates at 3% and sometimes below I don’t know, locking in a, a monthly mortgage rate right now, even if prices are up is still a great time to be a buyer.

Tego Venturi: I think so. And, and I, you know, had this conversation with another realtor that was saying, well, what do I do? You know, I don’t know how to tell my buyers because I’m afraid they’re going to overpay. And then I’m going to have to sell the home for them last year. And I’m like, well, hold on a second. Do they need a place to live? Is this is what homes are selling for right now. Okay. Do we know what’s going to happen in the future? You know, so I mean, it’s like, it’s tough. Cause Tracy, we went through 2009, 2010, 2011, when people were having to sell their homes for $50,000 less than they paid for them. Right. I mean, we saw some of that. I just do not see that in the card anytime in the next few years, I just don’t. I mean, we’re going to have a slowdown. Absolutely. I just don’t see a big decrease in home prices anytime soon.

Tracy Venturi: Right. So it’s a big myth, 20% down for buying a home is a big one.

Tego Venturi: I really took that off track time. Yeah. Yeah. Getting back to where we were getting back to what we were actually talking about. So this study, Tracy want to talk about that it was a profile of home buyers and sellers that the national association does. And they said, you know what, actually people really put down

Tracy Venturi: And what they really put down first time, home buyers, about 7%, which is interesting because three and a half percent down is an FHA borrower loan minimum. And a lot of first-time home buyers are FHA borrowers with 3.5% down. But that means there’s a bunch of them that are putting 10% or more down, which is great. And hopefully, hopefully families are helping them if they don’t have more than three and a half percent down and they’re gifting them that money so that they can have more equity in their homes. Because yeah, I’m saying if you’re in a position to give to what a better gift you can give your child than to build wealth through you know, through real estate all home buyers though, it’s a average of 12% down, down payment. So the 20% hasn’t come in yet 20% doesn’t even come in with repeat buyers they’re at 16%.

Tego Venturi: Yeah. So it’s interesting. And you know, the reason and just to clarify, why somebody would want to put 20% down is because of mortgage insurance, right.

Tracy Venturi: For some loan programs. So mortgage insurance is something that’s insurance, that’s money that’s paid. Every time you pay your payment, that’s given to a company that’s insuring to your lender, that if you default and stop paying there, they’re responsible, not the bank or the lender.

Tego Venturi: Right. Right. And so, you know, that financially, that does make sense. Because you, now, you’re not having to pay that if you have the wherewithal to come up with the 20% down payment.

Tracy Venturi: Right. But there’s the great VA loan, right? The, the VA loan is the best loan out there. And there is no mortgage insurance on that. And that, and there shouldn’t be no, it’s a benefit to our veterans that qualify for a VA loan. There is no down payment required and no mortgage insurance. So it’s a great loan. Great, great. Yeah.

Tego Venturi: That, that is by far the best program out there and not everyone qualified, not everyone qualified to do your time side note, Tracy, what other, I’m going to do this as a, as a, as a, as a jeopardy question test. What other program in New Mexico is available for zero down payment and they are out there.

Tracy Venturi: I know the answer, it’s the USDA for rural areas in some rural areas are in Sandoval County are in Valencia County are in Torrance County. Yep. I don’t know that there’s any in Burnham,

Tego Venturi:

Bernalillo County, but Santa Fe County. So you get out to Edgewood. If you go to the East mountains, Moriarty you know, down South, like you said, there’s, there’s areas where you can get those USDA programs in there

Tracy Venturi: Might be better to do the FHA though, versus that, you know, it just kind of depends, but getting a great lender to help, you know, the difference and pick, help you pick which loan program, you know, a lot of times buyer buyers have no idea, you know, that there’s all these different loan programs and it takes a really good lender to talk with them, to find out what product is going to be right for them.

 

Tracy Venturi: Housing stats. Tego

Tego Venturi: I know. Well, it’s the first week of February, 2021. And here we are. And, and I’ll go through a couple of things. I know it’s a little more difficult on radio. You guys can’t see this, but let me just give you a couple things, Tracy. So the number of homes sold in January this year is up 14% versus January last year.

Tracy Venturi: Incredible. Isn’t it? Considering that if we had more houses on the market, think how far up it would be?

Tego Venturi: Well, that, that goes right into what I was going say next, which is the number of homes for sale. So again, set that in your mind, 14% increase in sales in January, that was with a 64% decrease in the number of homes on the market versus last January. So give me an idea. Last January, you had 1,752 homes on the market. This January 630, you know, that was just for the Metro Albuquerque. Currently there’s about 850 or so in Metro Albuquerque single family homes for sale. And as I keep saying, you know, we could easily have three, four, 5,000 homes in the market and still be in a quote balanced market, you know, with the, with the current demand that we’re seeing in, in the market. And I, I know there’s a lot of people talking and I was on a training where I was talking to some other realtors about, you know, what’s going on, doing what I do here, which is talking about the market. And some people are concerned that the prices are gonna tank and 21. And I I’ll just say I’ll put my, you know, I’ll put my name on it, that I don’t see it. I just don’t see it in,

Tracy Venturi: I don’t either prices can’t tank that fast. It moves slow. So I’m sure you have some other stats for us from January before.

Tego Venturi: The one thing I wanted to talk about was the the, yeah, let me go back to that one. Sorry about that is the luxury market Tracy, because that’s one place where we’ve really seen a huge move in the last year. And just to give you an idea homes over 600,000, if we look at closed sales,

Tracy Venturi: So did you increase that from 500,000? We always talk about homes over 500,000,

Tego Venturi: The stat I’ve got it set up as 600 and above, but just to give you an idea, there was a 45% increase in the number of homes over 600,000 that closed in the last 12 months. Okay. If you look at it just for January, there was, Oh, I’m on the wrong chart. We get this in January of 2020 homes. Over 600,000, we had 18, or excuse me, had 18 sales this year, 41 sales in January over 600,000. That’s 128% increase. Yup. So that market’s really strong. Yeah, I mean, we don’t need to beat this to death. The reality is it’s, you know, the market is very strong. It’s a very strong seller market in all segments of the market, all parts of town. And, and I don’t I don’t see that changing anytime real soon.

 

Tego Venturi: I want to talk about this whole idea of selling and selling in this market. And are you leaving money on the table as a, as a home seller? The reality is this is the strongest seller’s market that I think we’ve ever seen in the Albuquerque area. And it’s not just Albuquerque it’s across the country. I mean, there’s a select few markets that aren’t that way, but it is a strong seller’s market, which means you put a home on the market it’s most likely going to sell. Right? Obviously price matters. But you know, you could get a let’s say a lower price point home that’s in fair condition, take some cell phone photos, throw it in the MLS and you’d get some offers right away. The question is, are you leaving money on the table? Are you leaving money behind when you do that? So just Tracy, can you talk to folks that are thinking of selling of the things they need to be thinking about?

Tracy Venturi: So, you know, we know from years and years of doing this, that our website gets people from all over the world, right? We’re seeing people buying houses here that haven’t stepped foot here to buy that house. We’re seeing people from all over the United States, we’re seeing people from actually in the last month or so we’ve had several that are international. They might be PCs’ing coming back to Kirtland air force base, or for some other reason or out of the country and coming back.

Tego Venturi:

And you said it real quick, you guys say with PCS’ing and if people don’t know, I mean, anybody in the military knows what that means.

Tracy Venturi: PCS’ing is a permanent change of station. So military people, when they get assigned to a new base, they PCs permanent change of station to the new one. Yeah. So that happens. But we know that there’s a lot of people online, shopping and choosing what houses they’re interested in. And even though it’s a great time to be a home seller, we feel like it’s a disservice to our sellers to not present it as professionally and high quality as possible. We’ve seen some houses that are getting cell phone photos or really crooked, you know, they’re not good. And you know, we feel like perhaps money is being left on the table sometimes. Plus the negotiating skills.

Tego Venturi:

Yeah. Well, that’s what I wanted to ask you because obviously presenting the property, merchandising it, making it show, well, you know, be the model home. That’s going to get you the most from the presentation side. But what about, you know, you get multiple offers, what’s important there and what should your agent be talking to you about your real estate agent that’s helping you?

Tracy Venturi: Right. So multiple offers it’s lovely, right? From a seller’s perspective, being able to choose among a few of three or four or five offers. But the highest priced offer is not always the best offer. And you know, just this past week with our team, I can think of at least two instances where there were multiple offers and the highest priced offer was not the one selected. So all the other terms are very important. Closing timeframes, inspection deadlines, the quality of the financing or the cash, even sometimes cash without any documentation to prove that your buyer has the cash available or ready cash. So to speak something that can be converted into cash quickly might mean that there’s not faith, that, that cash exists.

Tego Venturi: And we know, you know, I’m going to say, we know all the tricks right on, you know, when we’re representing a seller, we’re looking at more than just the bottom line price, because there’s so much more to it. You know, the pre-qualification, you know, have they actually been pre-approved or that a lender just kind of take a phone call and get some basic information said, Oh yeah, it looks like you qualify. Or they actually approved for the loan. They’re ready to go.

Tracy Venturi: So that’s a really good sidebar. Right? So there’s pre-approval and pre-qualified. So a lone letter that comes to us along with the buyer’s offer that says they’re pre pre qualified. So a lot of times the language in those letters says based on the information you’ve given and given us, you appear to qualify. However, we have not checked your credit, we have not verified your employment. We haven’t checked your taxes. This does not mean we will lend you that money. So you’re going, what’s the point, right? Why would we give much credibility to that type of letter when it says it’s only based on what you told us, you haven’t even filled out a loan application to give us all your data. We haven’t even pulled your credit yet, versus pre-qualified where somebody actually has already pulled their credit and done some of the due diligence to verify some of the information.

Tego Venturi: And I want to just make something clear here. We’re not, we’re not throwing lenders under the bus. You know, what happens is the buyers call up and say, well, I don’t want to do all that. Now just give me my prequalification. Well, the buyers are doing themselves a disservice by doing that. I assure you that lenders want to do the due diligence and give you as a buyer, a very strong pre-approved, you know, qualification letter that you submit with your offer. And so buyers need to not try to shortcut that step because it’s going to make a big difference in them winning or losing when they make, make offers right now, when you get multiple offers. Right?

Tracy Venturi: Right. So the other part of that is, you know, having an experienced agent that does a lot of transactions in this market right now that really knows the ins and outs of how to look at one offer over another for a seller is pretty important, to really give good advice and help the seller make a good decision based on what we, what we have and the relationships we might have with other realtors and with local lenders, because obviously with a local lender is preferred in our market over out of area lenders.

Tego Venturi: You know, we we’ve talked about this many times, but I’m going to say it again, local lenders that have an office that have a reputation to protect in town. They want to make sure that they’re keeping that reputation strong and doing the right thing. And unfortunately, we’ve seen it. And I, again, I’m not trying to like slam anybody here. I’m just saying we’ve seen it when you have these kind of out-of-state online lenders. They just don’t have quite as much skin in the game to make sure that everything’s good to go. And that the the buyers are taken care of.

Tracy Venturi: Well, and that’s oftentimes the out of area lenders don’t know about some special programs that might be available here. They don’t have a down payment assistance program for first-time home buyers, right? Yeah. They’re just more limited on the products that they can offer to home buyers. So that’s, that’s things to consider when I’m wondering if you’re leaving money on the table. So who you choose to sell your home with you does matter

Tego Venturi: Again, it’s not just about price. It’s about, you know, working those offers and negotiating the best deal for you

Tracy Venturi: And preterm and presenting the proper property in the best light possible.