National Home-ownership Month: Surprising stats in the Albuquerque Housing Market

(Transcript Snippet): “Tego: Great. Couple of things that are really telling about what’s going on in the market. We just heard Eddie story about going to a house in cars, lined up around the cul-de-sac that that’s pretty commonplace right now in, in the market. I pulled out a couple of stats just to give you an idea of some things that are going on in May, 2021. We had our list price to sell price ratio was 101%. Okay. That’s a pretty normal, you know, stat that we look at that list to sell price ratio and you know, customer, I mean, it dropped as low as 95% something back, you know, when the market was really down, but, you know, traditionally is somewhere around 97, 98%, right there, a little bit of discount off of list normally. Well, we’re at 101% in may, but it doesn’t tell the whole story.
Tego: And so what I did is I went into the MLS extrapolated, a bunch of data and found that of all the homes that closed in may, which means these are homes that probably pended sometime in March, April, let’s say late March and April 50% of them sold for over list price. That is unheard of. It is unheard of. And that, that is very telling about what’s going on in our market. And then, so Tracy, let me ask you this because, so I’m sure some of you are going well, how, why don’t you just list them for more? Why are they, you know, why aren’t you just listing them at a higher price since they’re going to sell for a higher price? Well, why, why don’t we,
Tracy: Well, we could try, right. But what we have found is if we price them for the real market, people do pay more typically, but we don’t
Tego: Price it for the real market. What does that
Tracy: Mean? I mean, we’re looking at historical data, right? We’re looking at most recent sales in the area and saying, okay, a month ago, this house nearby was similar. It’s sold for X. So we’re pricing it based on what is showing up. But when we price them over that we have seen over and over again, even in the last two months, right. Tego that the houses that we start to high end up getting price reductions. And I bet you have a stat for that.

https://welcomehomeabq.com
Tracy & Tego Venturi
Venturi Realty Group
Keller Williams
1119 Alameda Blvd NW
Albuquerque, NM 87114
(505) 448-8888
info@welcomehomeabq.com

Is it a good time to buy or sell your Albuquerque home?

(Transcript Snippet): ” Tracy: What we hear regularly Tego, and I know you’ve been listening to these podcasts and we’ve talked about it. Is it a good time to sell? Is it a good time to buy?
Tego: Yeah, I heard, I heard somebody reframe this and it was just like, it was a, it was a light bulb, you know, it was just like, yes, of course the question. Is it a good time to buy as a good time to sell now if you’re a real estate investor, maybe that is a good, that’s a fair question to ask. I would even debate with that, that maybe it isn’t, but if th th the question you’re asking is where am I going to live?
Tracy: Right. Instead of, is it a good time to buy or sell? Where am I going to live? Might be the better question.
Tego: And so if you’re a homeowner and you’re saying, okay should I sell, well, where are you going to live when you sell? Right. And so what what’s, what’s a better option for, and I know people go through this, right? They, everybody goes through this exercise when they’re thinking about it. I just, I think this whole idea of when a time the market, oh my gosh, are we in a bubble? Are we gonna, you know, are we the top of the market? Is, should I sell now? Will the prices are high? Or, you know, are they going to go down next year, blah, blah, blah, blah, blah. It’s like, no, where am I going to live? Next is I think the question, right? Interesting.
Tracy: So I had a gentleman call yesterday and wanted to speak to one of the Venturis, which was cute. And he he had our number from when we were on TV with Barbara Corcoran, doing ads with Barbara Corcoran. And he had written down our numbers, our office number and ourselves numbers from that commercial. And I don’t know, I, he kept track of it. So he called yesterday and we talked because he’s thinking it might be time to sell, but he’s thinking maybe now maybe four months from now, maybe two years from now. And he wanted to ask that question, should I sell now? What’s the market going to do? And so, of course I was asking them, what, where are you going to live? And what are you going to do if you sell now? And what’s the motivation. And, you know, he feels like it’s a good time to sell, and he does have a place to live. And he said, there’s an active adult apartment complex nearby that he’s kind of curious about, cause he lives alone and he’s 60 years old now. And he thought if he moved into the apartment complex where there’s 55 plus active adults, that he might have more social going on. So that was interesting not. And so the question I asked him of course, was where are you going to live if we sell it now? And he had that all figured out and it sure made good sense, didn’t it?

Where are all the Albuquerque homebuyers coming from?

(Transcript Snippet): ” Tego: Yeah. So one thing I wanted to get to Tracy is this whole narrative. I, you know, I’ve been interviewed now a couple of times by the journal about the Albuquerque journal. And I appreciate that. I mean, I, you know, I, I hope I’m adding some, some value to the stories we’re doing on real estate here. And one of the questions that always comes up and I heard it again on a podcast, I know I drove to grants and back the other day, and both directions, I listened to podcasts from housing economists and people like that. That’s what I do for fun. Anyway. That’s why I was able to do it. But you know, th this whole idea that, oh, that’s the Californians came, you know, where are the buyers coming from? We keep hearing that all these people coming from?
Tracy: Everybody says, oh, the Californians are all coming here and buying our, built our houses with cash, especially luxury.
Tego: And we hear that from our friends, at our agents in Austin. We hear that from, I mean, it’s everywhere. It’s everywhere in the country. You know, the, the one person I was listening to there in Sacramento, and they’re saying, well, it’s all those bay area, people coming to Sacramento. Well, it’s partly that, but the little, the dirty little secret, it’s not even really a dirty little secret. It’s just the, the reality is most of the demand that we have in our markets is coming from within, right. It’s, it’s not, you know, people coming from elsewhere, it’s just households getting formed people, not wanting to live stacked on top of each other, in apartment buildings anymore. The lack of, of rentals. And we’re gonna talk about that in a second. And, and so, you know, it’s, it’s whole narrative that it’s, oh, it’s, it’s those other people coming in and stealing our affordable homes. It’s like, well, no, I think you need to let that go because yeah. Okay. There’s always going to be people coming in and out of markets, but you, you can’t say because it doesn’t, it breaks down when you realize that this is happening in every market, around the country, except New York, and except San Francisco,
Tracy: They’re all saying something else because people aren’t flocking there, right? Yeah, exactly. Everybody else says, oh, the new Yorkers are buying all our property, or everybody from California is coming and buying our property. So yeah. We’ll have to do a poll of our most recent buyers Tego at certain, and just kind of see where they’re found. I mean, we know generally have a pretty good idea of a pretty good idea. I would say probably 90%, 85, 90% at least are local. Yeah. Yeah. Or there, they were in New Mexico and are coming back to New Mexico for some reason.

Albuquerques’s luxury Real Estate market: Things you should know

(Transcript Snippet): “Tracy:  Say that not every house with a pool is luxury. We just in the last couple of weeks, we’ve had two transactions going where the houses were under 300,000, had a pool. I went to an inspection on behalf of one of our agents, who’s out of town for the holiday and I happened to go and meet her clients and let them in their house. And it’s a $250,000 house with an in-ground pool with an automatic cover. And it was two 50. So, you know, you think of a pool as a very high end luxury item, but there are pools on, on homes around not, we’re not like some markets, right. Pools are not common here. The high desert, it gets cool at night. Yeah,
Tego: It’s not like Phoenix. When you look at a Phoenix, satellite aerial and you look down and every other house, or maybe every, maybe two to two out of three. Yeah. Obviously depends on the neighborhood.
Tracy: Most of them have pools the majority. Yeah. Yeah. So
Tego: One of the stories I saw last week and I was sitting there reading it when you walked into my office the other day tracing it. And I think the headline was, I might not get this just right. But it was basically, you know, the new status symbol in the country is, you know, outdoor living spaces, you know, glamorous, outdoor backyards or outdoor spaces, you know, and of course here in New Mexico, it’s great. Cause we do have, you know, almost really almost four seasons, but let’s say three seasons where you can really, where you can be outside if you do it. Right. Yeah.
Tracy: And you know, I also saw an article. So you were, I walked in on you with an article and I had just read one in a, in a travel magazine. And they were talking about all the movie stars and actors and actresses doing outdoor living. And that was a huge thing. And how over the top they were. And it was kind of interesting, but we see a lot of beautiful outdoor spaces here in New Mexico. One of my favorite outdoor spaces in New Mexico is at the Hyatt, Tom. I 
Tego: Yes, it’s pretty nice. That’s such a great, if you haven’t been out there, it’s like going to a different world. You know, you just go a little bit north of, of the city here and you’re kind of in a different place and you’ve got that beautiful view out there.

Interest rates: Its connection with Home buyer demand in Albuquerque

(Transcript Snippet): Tego: Can’t talk about home buyer demand without talking about interest rates in 2020, you know, Eddie, as you know, interest rate dropped to sub 3% for 30 year mortgages at the beginning of the pandemic that was driven by a lot of reasons. We won’t go into, maybe Chris can go into that, but you know, the, the whole, the whole thing is interest rates drop, which really drove demand. People went well, shoot, I’m going to take advantage of this, you know, and of course, refi, there was a refi boom at the same time because of that. So affordability, although prices have been climbing now since, since about 2012, affordability is still very good. When you account for the interest rate. Eddie: I think the affordability, as we’ve mentioned, we’ve had a discussion is one of the things that is at an all time high, despite the rocket, if you will escalations in year over year prices, we saw 18%. If I’m not mistaken in Rio, Rancho Albuquerque, I think it seems somewhere around 11, 12% year over year, even during the pandemic, you look at these numbers and that’s driven by those interest rates, but they’ve created a level of affordability that we didn’t have in the aughts. And even in the nineties
Tego: Here, get this. So just a side note, I posted this on my Facebook. You know, I post a lot of housing stats on my Facebook feed, just because that’s what I like to do. But I, I took a quick look at may so far and last year may again, of course, last year may was pretty weird time, as we all know that we all live through it, but may of 2020 was kind of crazy, but the average price back then, this is average. Now this is not appreciation, but I just, just for, for perspective here average price was 252,000. This year, same time is 316025% higher. The average price of 25%. It’s a very small site slice. Don’t say, please, don’t call me and say, Hey, you said home prices went up 25%. That’s not what I said. What I said is average price for may went up 25%.
Tego: And, and what happens? I do get feedback sometimes from the radio show, people are like, well, you said this, and you said that we’ll look, these are general numbers, right? Every home is different. That’s one thing that’s very unique in real estate is every product is unique into itself. It’s not like buying a car where you can get the exact same thing over and over and over and over and over again, right? Every home is different. These, all this data that I put out there, it just, you know, it, it’s going to be specific to your home, your neighborhood, your side of the street, even right. Obviously condition, all that stuff matters. So just kind of keep that in mind. I’m trying to give general ideas of what’s going on in the market, which I love to do. Eddie: If anybody looks at Zillow or any of those other places, people will see the huge price discrepancy and two houses across the street from one another. By the simple nature of the fact that the two houses one has age, the other one doesn’t
Tego: Yep. Okay. Eddie, it could, you know, views, right? Think about Albuquerque on the west side, certain sides of the street on the west side, you’ve got the, the east mountain views from your back patio, same house, same house across the street has got the Western sun on their back patio in the afternoon. And, and it’s just, you know, there is a difference between those two properties. They could be identical in every other way. So again, it’s it’s you got, you just have to, you have to look at, or not a house by house basis.

The demand side: Why there are so few homes in the Albuquerque’s Real Estate Market?

(Transcript Snippet): Tego: Speaking of, of misinformation. I hear a ton of people going, oh, but the foreclosures are coming, the forbearance, the everybody’s going to be, you know, all these homes are going to flood the market. Well, one of the supply challenges has been that we’ve had this foreclosure moratorium since the beginning of the pandemic, which is great. I get it. I understand, you know, help people out that, that, you know, were basically unable to work for stuff out of their control. Right? We’ve got these forbearance plans, which are keeping people in their home that, you know, maybe would have been selling, but you know, on a forbearance plan, they’re not paying their mortgage. They’re able to stay in their home without a monthly payment. Now that’s going to catch up to them at some point, there’s going to have to make good on it at some point, but there are a lot of people that have been, been not making a payment for a year in or more so again, that’s another COVID related reason for the short supply as this, again, these foreclosures distress sales not coming on the market.
Tego: There’s been a few, but it’s, it’s very limited, very, very limited it’s any of the mortgages that were backed by any of the, the government plans. Those homes are not being foreclosed. Okay. Let’s talk about demand. Homeownership rate dropped to a, a pretty big, low back. I’m going to pull up this chart here from the the fed they’ve do some great charts. And, and so in, just give you some perspective here in 2004, 2005, this was an all time high home ownership rate in the United States was 69%. That was a really high number. However, what happened was it dropped to a low in 2016 of 62%, which was really, it was a historic low. And I remember back at that time, there was all those stories, oh, these millennials, these young people, they are not going to want to own a home.
Tego: They’re going to want to live in, in the city. They’re gonna want to commute to work in the Uber and they’re never gonna buy a house and they’re never gonna buy a car and they’re going to get their door dash delivered and all this. Well in 2016, we saw reversal and ever since then, we’ve had this increase in home ownership rate. People started to come into the fact that home ownership is great. You know, there’s tons of advantage, not just the financial, but it, you know, there, there is a lot of other reasons just American dream, that, that, that whole conversation, I won’t go into all that right now. But so ever since 2016, we have seen an increase in buyer demand around the country. Another part of this demand story is something I just mentioned, which is the demographics, the millennial generation is the largest demographic generation ever in American history, bigger than us boomers on what do I call myself? Uh, I’m a tailing boomer. I’m a little older, a little younger boomer, but anyway, they are the biggest generation ever. And they’re right now in their prime home buyer, first time, home buyer years. And there’s a Logan Mashami, who’s one of the, uh, economists housing economist. I follow. He’s been, he’s been talking about this for two years, that it’s coming come to 2020 through 2024. We’re going to have all this big, this big demographic of people coming into home by an age. And, and that’s, what’s happened. They’ve moved into home by an age, and that has driven demand a lot faces. Okay, let’s get back to this demand thing. So, um, I, the demographics thing I hit on that let’s talk about, um, the fact that there’s a lot of people that were on the edge of buying had kind of been on their list.

The supply side: Why there are so few homes in the Albuquerque’s Real Estate Market?

(Transcript Snippet): “Tego: So let’s go through this. Why do we have so few homes on the market? Let’s just talk about the supply side in the last 10 years. Well, let’s put it this way. There’s been a 10 year plus years of under building new constructions. There just haven’t been enough homes built to take up the, the demand plus future demand. And future is now here. I’ll get into the second, but we’re going to talk about the whole millennial thing and why that, that demand is there. So the future is here and there’s big demand, but there’s been 10 years plus of underbuilding. There’s a lot of reasons for that. Just give you some statistics to back that up from, in the seventies, in the United States, there are 11 million homes built in the eighties. There were, let’s see, 9.8 million home built in the let’s say the, the, the 2000, right.
Tego: There were 12.6 million homes built. And then in the 2010 to 2019, there were 6.5 million home built. So, so you see about, you know, we’ve had this huge decrease in the number of homes built, and so it’s really affected and just what’s available. Couple of things have created that. Why were there so few homes built over the last 10 years? Well I will say that it’s, it’s partly just being conservative, the people, I mean, a lot of people got hurt in the housing bubble builders, developers, contractors, obviously. And, and they they’ve been much more conservative, but the ones that made it through, and then there were a lot that didn’t make it through. Meaning there just were less home-builders in, in the entire country.
Tego: One of the things that happened was the cost of lots, meaning finished, ready to build lots. So what happened was at the end of the pandemic, we had all this oversupply, a vacant lot ready to build lots. Well, now those all have been used up and they’ve been used up now for a few years and th the process to bring new lots new building sites out of the ground. It’s a slow process. Think a year, two years, three years permitting construction investment, and again, millions of dollars of investment to get these subdivisions built out. And you know, people are being conservative on their investment. Interesting thing that that happened in the mid let’s say 2013 to 2018, there were a lot of stories about the lack of skilled trades people. And it, you know, people that follow the news, you probably heard this well, that trend really caught up to us.
Tego: What happened was at the end of the, the housing boom. And while at the beginning of the housing bust, let’s think 2009 those jobs just kind of went away. A lot of people left the trade, the skilled trades, electricians, plumbers, framers, you refer to all, all those things. And I mean, there’s a story from 2013 here I have here from Forbes talking about let’s see. So the, the headline is, and this is from 2013, but think about this American skilled trades dilemma, shortage, loom as most in demand group of workers by ages and most what happened is over the years here, the trades people just were getting older and older and there were less trades people coming into the industry. When I talked to home builders or any of the groups that do surveys with home builders here, locally myself, or nationally with some of these other folks, when they talk to home builders and say, okay, what are your challenges right now? How come you’re not building more homes, right. We’re all saying, why aren’t you building more homes? We need more homes there. They’re just saying, well, costs let’s put cost aside. That’s a whole other conversation. Their costs have gone through the roof, but, but labor that just skilled construction labor is in high demand. And so they’re, you know, they’re, they just can’t basically get people to build the homes as fast as they would like. So that’s one part. Okay.

Is this the right time…to buy an Albuquerque home?

(Transcript Snippet): ” Tego: Can we talk about this whole, is it a good time to buy question? Cause it’s it’s you know, obviously it’s, it’s a tough question to answer because we don’t know, you know, nobody knows the experts don’t know what is going to happen with the overall economy of this country. And I know there’s a lot of opinions out there, right? You can jump on YouTube and you can get as many opinions or get on Twitter and get as many opinions as you want about the overall economy. And, you know, consensus, when you, when you listen to the experts, I do my air quotes, experts, you know, the economists and other people that are, you know, the pundents on the economy, everybody, you know, is saying there’s, doesn’t appear to be anything. You know, this is going to slow this down right now. Now, now in of course you, you know, you just look at the stock market, which is always the, the kind of the leading indicators. It’s a leading indicator of what the economy, at least how people feel about the overall economy. Right? And so, you know, right now everybody feels good about it. Now, now inflation is the big topic these days, right? Inflation is, is very  Tracy: It’s very inflationary,
Tego: Good answer. And I’m glad you laughed with me. Yeah, no, I know. I, and, and, you know, to be honest with you, I’m just going to give my opinion on this. If inflation is going to get, jump up, which it appears it is, or we’re in the middle of it right now, we don’t have the data yet, but you know, inflation is going to run up hard assets. Aren’t what you want. Right.
Tracy: Which is real estate a hard-ass correct. Right. Because you’ve already locked in the value of it. Correct. And your money won’t buy as much with an inflation. Okay.
Tego: To replace that asset is going to cost a lot more than it did today in the future. Right. And so to highlight that, I’ve got that story that I put on. Where’d I put that, I put that on Facebook about the cost of lumber, right. That’s been a big conversation in our industry and, and actually it’s kind of funny. It’s kind of been all over the place. Lumber’s kind of like this whole Canary in the coal mine thing about, you know, what’s going on with, with housing, but you know, you talk to home builders. It’s not just like, no it’s
Tracy: Windows in stores. It’s light fixtures, it’s facets. It sinks, it’s bathtubs, it’s it’s everything. But lumber is a big pack part of the cost of construction.

https://welcomehomeabq.com
Tracy & Tego Venturi
Venturi Realty Group
Keller Williams
1119 Alameda Blvd NW
Albuquerque, NM 87114
(505) 448-8888
info@welcomehomeabq.com

How affordable is housing in Albuquerque?

(Transcript Snippet): “Tego:  Tracy. You said something and I wanna, I wanna cause you corrected me the other day w you, you hardly ever do that. So, so I was talking with our team about the market and what’s going on and just going through some data. And I was talking about how, you know, these homes under the median price of two 60 are selling really quickly. Right. And, and you made a really good point. You said, look, you keep saying, it’s like the lower price point. Well, we’ve seen, you know, million dollar homes come on the market and have multiple cash offers right away as well. So it’s, it’s really every price range. It is. Now the thing that’s curious about that as you look at the MLS and there’s six, 700 homes, all that’s on the market at any given day right now in our MLS. And there are a fair amount of homes that have been on the market for 30, 40, 60, 90, 180 days. Well, obviously there’s something going on there, right. And maybe, maybe their price is still just too high or maybe that’s a condition issue or the old, you know, location issue.
Tracy: It’s some, some combination or one of those things for sure in this.
Tego: Yeah. The, the, the point is that demand is there and maybe the product just isn’t fitting, you know, for the people that are out there. But yeah, it’s every price range is,
Tracy: Do you have any stats for that? Well,
Tego: Like in the, in the higher end, you know, we’ve basically seen double putting it on the spot. Oh no, that’s fine. I can, yeah. I, you know, in the higher end, what we, somebody asked me, he said, well, what’s considered a luxury in Albuquerque. And it used to be just under 500. Now. It’s probably over, I haven’t calculated it in, in the last couple of months.
Tracy: I think it’s not necessarily by the numbers. This is not where a statistician makes it make sense, but it’s what is our perceived luxury price? There is a definition I know there is, but you know, in my mind, I’m not the stat person. So in my mind, it’s the perceived, it’s like a half a million and above is what we consider luxury generally what people think. But yes, there’s a stat for it. And the number is different from that.
Tego: Well, the stat is it’s the top 10%.
Tego: Okay. You know, this okay. Of, of all the homes that sold, what are the top 10%, you know, of all those homes, what prices, you know, in above. And, and so, yeah, right now it’s right around 500,000 and above. And so if you look at that price range, 500 and above the number of sales, it’s not quite double, but almost doubled versus versus last year, you look at the, what I consider like the ultra high end, maybe a million, 1,000,002 it’s, it’s more than doubled.

https://welcomehomeabq.com
Tracy & Tego Venturi
Venturi Realty Group
Keller Williams
1119 Alameda Blvd NW
Albuquerque, NM 87114
(505) 448-8888
info@welcomehomeabq.com

Albuquerque forbearance updates

(Transcript Snippet): “Tego: It has to do with, with what’s going on with the forbearance world. Right. So if you’re not familiar with it, when the pandemic started there were a lot of these programs that came into place to help people with mortgages 
Tracy: Couldn’t afford to pay them, could
Tego: Couldn’t make their home mortgage payments enter into a forbearance program, meaning they’re, they’re basically putting their mortgage payments on hold. And, and of course, you know, now we’re, we’re past a year out. And and so there’s been a lot of them that expired because, you know, I think initially it was what six months, or maybe it was three months and it extended and, and a lot of them, you know, are up on a year now. And so, so there has been a lot of explorations in, in what what’s happened is as they’ve expired, meaning the plan most of these people have come off the forbearance plan,
Tracy: Right? When you look at the numbers, the decline was pretty significant of people in the program. Okay. Yeah. So people
Tego: Exiting the program. A lot of those people came, you know, did a workout plan with their, their mortgage per, you know, their mortgage servicers. We call it and meaning like, okay, we’re going to, you know, set up some sort of repayment plan so you can get back on it. Some people didn’t, and that’s a really small number. And then some people extended again to that may, that may not have so, but, but the, the point is it’s about half, I think from a year ago, shoot, I saw it earlier and I read the data on it, but substantially less number of people on those forbearance plans. And every month it keeps declining and the point is, it’s going in the right direction. It’s not looking like we’re going to have a flood of foreclosures for, you know, people that, that have gone into foreclosure.
Tracy: And typically what we’ve seen Tego for people that have come out of a forbearance program that maybe didn’t pay their monthly mortgage for a year or some number of months during that year is a lot of times they took that amount that they should have been paying. And the lender put that at the back end of their loan. So it’s not like now they owe 10 months or 12 months of mortgage. Right. They just added it onto the end of the loan. So now they’ve got a 30 or 31 year loan instead of a 30 year mortgage. Right. So it, th the, you
Tego: Know, again, the takeaway is it’s positive news for, for that situation. I know there was some really big, scary numbers, you know, last year on the number of people that weren’t paying their mortgages, but every month it gets better and better.

https://welcomehomeabq.com
Tracy & Tego Venturi
Venturi Realty Group
Keller Williams
1119 Alameda Blvd NW
Albuquerque, NM 87114
(505) 448-8888
info@welcomehomeabq.com