2021 Challenges for Albuquerque’s Real Estate Market

by | Feb 2, 2021 | Podcast, Radio | 0 comments

Tracy:

So new topic. Well,

Tego:

It kind of ties into, you know, the trend, right. Tracy and into this. So we were talking about the cloth office, but some of the things that have kind of come out of 2020, and now going into 2021, what are some of the challenges that our market, the real estate market as a whole is going to have? So realtor magazine did, did some surveys of realtors from around the country. And so they come up with seven things and we can just talk about this really quick, Tracy clearly inventory shortage. We’ve already hammered that in today’s show. You know, again, it’s, it’s everywhere. The number of homes in the market is, is much lower than, than what we would, we would like to see. W do you want to go through

Tracy:

Widely distributed vaccines to boost confidence of the population,

Tego:

Right. There, there are definitely people that have not put their home on the market because they’re just, they don’t want to live. They don’t want to move around. They don’t want people in their house. So, yep.

Tracy:

Interesting though, I think in New Mexico, we’re, you know, we’re on a, a couple of different Facebook groups with top agents across the country that are from all brokerage at bulk brokerages, not just Keller Williams Realty, as well as the top realtors around the country and world with Keller Williams. And it seems like here in New Mexico, a lot of people are getting vaccinations. And in other States they don’t even have a registry yet. They don’t even have a place to get in line. Whereas we do it, it sort of feels like we have, we know a lot of people around us that have already had their first shot and some their second this week. So maybe we’re ahead of the curve on getting those.

Tego:

Yeah. It does seem that way. Just based on the, the, the, a little bit of evidence we have, but that is true.

Tracy:

Yeah. It isn’t a lot of evidence. Yeah.

Tego:

Let me speak to this one, obviously it’s right up. My alley is, you know, the third thing they’re saying is that the homes will be lost to foreclosure. Obviously, you know, there’s still 5.3% or 5%. I don’t remember exact number. It’s like five, 5.2% of homeowners are delinquent, right? But most of those people are in a forbearance plan. Some people are going to come out of the forbearance plan and just start making their payments. But some people will have to sell their home. The good news is delinquency does not equal foreclosure. Thank you. Yes. Delinquency does not equal foreclosure delinquency means that you can’t make your payment and you either have to sell your home. Or if you can’t sell the home and pay off the bank, then the bank ends up taking it back. The reality is though that the people are in such a super strong equity position, especially when you compare it to 2008 back in,

Tracy:

They can sell the home and pay off the loan and probably still walk away with some cash in their pocket. Whereas in 2008, they couldn’t sell the home for a price high enough to pay off the loan, which is why there was so many foreclosures. Yeah. We’re not in that position right now.

Tego:

The fourth thing that people are talking about are interest rates. We talked about that briefly. There’s no indication that interest rates are going to get pushed up any substance,

Tracy:

Even if they went up a point, right? It wouldn’t make a difference in buyer’s ability to buy, but there’s still, still exceptionally low. When you look at the history of 50 years of interest rates for residential real estate,

Tego:

You hit that one, Tracy number five,

Tracy:

Permanent shift to remote work could encourage more moves. So we, we know about this very firsthand, right? We know several people who are working remotely and they don’t have to stay where they’re living and they can move to where they want to. So they’re living in another state, they’re from Albuquerque. They might want to move home and continue to work at that developer job or that, you know, graphic design job that they used to have to go into their office for. But their company has now said, we have a permanent ability for you to work remotely. They don’t want you back at work right there. They’re downsizing their offices and going, Hey, this kind of is nice. We’re getting good productivity and we’re not paying for office space or all of that. So we’re seeing a lot more of that.

Tego:

Yeah. And, and, and there’s no doubt that’s going to continue. There’s definitely going to be a shift in the work from home idea. So the sixth one on this list here, and again, we’re going through the list of some, you know, survey of real estate agents, some of the biggest housing issues, seven of the biggest housing issues. So number six was, is that, that, you know, surges in the virus. If we see surges and the virus, again, that for the most part, let me say it this way, people are over it, and it’s not going to panic people as much, obviously, as it did back, you know, at the beginning of, of, of last year,

Tracy:

I’ve gotten more accustomed to, Oh, they’ve surged this week.

Tego:

Yeah. People have, you know, it’s, it’s the whole psychology of it, right? Everybody’s much more used to it and not as freaked out as we used to be.

Tracy:

So the last reason where, what we believe will be concern is affordability challenges. And, and you know, that persists because house prices are going up. Although if we can keep interest rates low and you can afford more house with a lower interest rate. So,

Tego:

Well, let me, let me just say that when we talk about affordability, okay, we’re talking nationally. However, if we look at Albuquerque, we are, we are much more affordable than most, any other Southwestern city, maybe El Paso is more affordable. But, but Tucson’s more Phoenix areas, more Colorado Springs. I mean, all, all these cities, you know, a lot of the ma I think San Antonio is very similar. But San Antonio has much higher property taxes. So, you know, it it’s, you know, our affordability here. I think we’re in a good place, even though home prices went up somewhere eight to 10% is what, I’m, what it’s looking like last year.