Housing inventory in Albuquerque and Rio Rancho

Often, people will ask me "How is the Market?".  They have read about the national housing marketing, but they want to know about their house, and their neighborhood. 

While I can't cover every neighborhood in the Albuquerque and Rio Rancho market, I can give you a general idea in this blog.  If you want a more specific look at the market related to your home, please call me at 505-350-0911 and I will be glad to run the numbers for you.

As the chart below states the market is considered a sellers market if there is less than 5 months of inventory of the market.  Sellers will see appreciation, and buyers will see the price they need to pay for a house going up.

 

If the market has more than 7 months of inventory, it is considered to be a buyers market, and prices will generally be going down.

So where does Albuquerque and Rio Rancho stand at the end of March:

• Albuquerque has 4.6 months of inventory (SELLERS MARKET)
• Rio Rancho has 5.03 months of inventory (NORMAL MARKET, MOVING TOWARDS SELLERS MARKET)

 

What's happening with New Home Construction

2013 should be a record year for home sale with interest rate so low, and the only thing that is standing in the way of making this a record year in the level of inventory.  Meaning we don't have enough houses to sell to satisfy the thirst of the people who want to purchase a home. See the chart below for an example of what is happening with housing inventory.

 New home construction is starting up again with an increase of 28.9% over January 2012. Movement in the new home construction industry will provide good jobs for construction workers who have been struggling for the past six years, and a boost for the economy.

So if you want a new home, now is the time to start looking - it takes time to pick your lot, and your floorplan, and make all your selections.  Remember interest rates are going up so you want to select your home and get the process moving.

If you need help finding that perfect home please call me at 505-350-0911. 

I appreciate all the comments I receive on my blog, so please keep posting them.

Why a Real Estate EXPERT?

You need to work with someone who is an expert in the Real Estate field - you are making probably the largest investment you have ever made.  You need a person that understands the market, understandings how all the pieces it together, and can simply and effectively explain it to you so that you can make the best decision for yourself and your family.

I am ready to be that expert.  Carol Skees www.albuquerquenmhomesearch.com

Move Up Buyers - How to Save $100,000 over the Life of Your Loan

According to the Mortgage Bankers Association, interest rates that have been bumping against the bottom for awhile - are projected to rise to 4.4 percent by the end of the year, compared to 3.4 percent right now.

If the Buyer delays the purchase of the home until the end of the year, the price will be 3.1 percent higher.   Which along with the higher interest rate means that the buyer will be paying $262.09 more per month, or $3,384 more per year, or $101,520 over a 30 year mortgage.

Those a pretty massive savings for buying a home today verses waiting until the end of the year.

Financial Considerations for the Move-Up Buyers

Let's look at a scenario for Move-Up Buyers.  If we take a look at the 2006 price right here on the table - back in 2006, their house was worth 300,000.  They were thinking about moving to that house down the block - that really beautiful house with the built-in pool with the extra accrage.  But that house was $450,000 and they couldn't afford to buy it back in 2006.

They bought the $300,000 house instead.  Well now both of those house have dropped 20 percent. As the chart shows while their house dropped $60,000, the other dropped $90,000.  

So making your move now to the home of your dreams, you saved $30,000 by buying the house now and not in the crazyiness of 2006. Buyers know that prices have bottomed out, this is the time to move up.

Remember the recent Home Price Expectation Survey, 105 of the leading housing analysts call for a 3.1 percent increase in home values by the end of 2013.

Move Up Buyers

There are studies out there that Move-up buyers are entering the market, they are now saying "You know what? I have some equity in my house".  Negative equity is shrinking as prices are going up.  I feel a little bit more confident about housing right now.  They are thinking "Maybe I shouldn't wait to move up to that house of my dreams.

Why are these people moving forward? Well we can see that 49 perce say that they want a significently bigger house.  17 percent say they want the same size, they just want to live in a different neighborhood in the same town.  8 percent want the same size, but a nicer home.   Three percent are looking for a same size but more affordable.  Some of these sellers are moving across the country for a different job.

 Next we are going to the financial considerations of the move up buyer.

I appreciate any comments on this or my other blogs.

Finances - The Cost of Waiting to Purchase a Home.

We already know from the Home Price Expectation Survey that prices are going to go up 3.1 percent between December 2012 and January 2013   Looking at a house that costs $210,000 now, that means by year end that same house will cost $216,510. That is the 3.1 percent price increase.

We also know that the Mortgage Bankers Association projects that interest rates are going to inch up to 4.4 percent by the end of the year.

As the chart below shows, what that means to a buyer purchasing a $210,000 home today, that the purchase price of the house will be $216,510 by the end of the year.  And if they buy now their monthly principal & interest charge will be $931.31; but if they wait until the end of the year to purchase a home they will be paying $1,084.20  for their housing.

Buying now verses later is going to save them $153 a month; or a savings of $1,800 a year.  Over a 30-year mortgage, they will save over $55,000.  Yes that is right, the difference between buying now and buying a year year from now is $55,000 to the buyer.

Buyers - this is the impact on your pocketbook, and your financial future.

Tomorrow I am going to talk about MOVE-UP Buyers.

All comments are appreciated.

Do Generation X & Y Believe That Owning is Financial Better than Ranting

The  question is do the Generation X & Y believe they would be financially better off rent or buying.  For a answer to that question, I turned to the Joint  Center for Housing Studies at Harvard University.  According to their report, seventh-nine person of those under 25 years old believe owning a home is financially better than renting a home.  That number jumps to 86%  when they surveyed 25 to 34 year olds.

 

So  let's not get caught up in what people are talking about or what people are prophesying on.  Just look at the numbers.

Your comments are always appreciated on any of my blogs.

How Does Generation X and Generation Y Feel About Homeownership

Let's first talk about the Generation X and Generation Buyer and their belief in homeowners and whether or not they are going to jump in.  There has been way too much written about the fact that, well that generation doesn't believe in homeownership. That generation wants to be much more mobile.  That generation had too much student debt.  That generation likes living with their parents and theirs parents love have them living there.

There are all sorts of people writing beautiful essays on the fact that homeownership is dead in the country, because that Generation has decided that homeownership isn't important.

Well, let's look at the facts.  Let's not look at what people are thinking. The facts are number ONE - 43 percent of the X and Y generating are already homeowners.

Seventy-two percent say that homeownership is part of their personal American dream.  Not a part of the American dream, part of their personal American dream.

Ninety-three percent of those generations that are currently renting plan to purchase a home.  

So the people telling you that they don't plan to purchase a home, well the problem with this is every survey out there, including this one, shows that over 90 percent of the Generations X & Y plan to purchase a home sometime in the future.

Bears and Bulls Forecast of Home Pricing

Let's divide the Home Price Expectation Survey between what the top one quarter, the most aggressive people, the bulls of the market, what did they think?  This is the green line on the chart.  Then the purple line is the average of all one hundred.  Than take the bottom quarter, the bears, the  people who think most negatively about pricing going forward, of those hundred - the red line.

We could see that there are some  people, the bulls that think by 2017 we are going to see a 33.6 increase in prices, cumulatively, over those years.

The average is 23 percent.  But even the negatives, even the bears to the market, the people who are looking at pricing most negatively, are still seeing over the next five years an 11 percent increase in pricing.

Buyers are starting to understand the important of these numbers. Here is a survey done by Redfin.  What they ask is what percentage of buyers who believe that prices will rise in the next twelve months.  We can see just in the last year, the first quarter of 2012 to the fourth quarter of 2012, the number is climbing.  Meaning that just a year ago now, people were saying, "Well there is a 34 percent chance that prices are going to go up in the next 12 months."  That number had more than doubled to 71 percent going into 2012.

That is creating an urgency in the buyer.  If a buyer knows - if they are sitting on the fence and they believe strongly that prices are going to go up, guess what they are doing?  They are jumping off the fence.  That is why I believe very strongly that there is going to be continued demand for housing going through 2012.

The next series of my blog will breakdown the Buyers down into two groups:
       Generation X and Generation Y Buyers
       Move-Up Buyers

Home Price Expectation Survey

Yesterday I told you that we would look at the forecast of home prices on a broader basis than a few individual analysts.  "Home Price Expectation Survey" done by Pulsenomics talks to over a hundred of the leading analysts in the country. People who know what they are talking about.  Then they mesh their answers together.  So it is not one person saying, "This is what we think." Or one organization saying, "This is what we think.".  What they do is take over a hundred of the leading analysts in the country and say, "What are your guesses going forward over the next few years?" Then they take all of those hundred plus projections and mesh them into one number.

The analogy I like to use when talking to you is if we had a jar of jelly beans in front of a room of a hundred people, if any one of those people guessed how many beans were in the jar, some would guess way too high, some would guess way to low.  But if we asked all hundred people to guess and then we averaged out all of there answers, we would come up with a number real close to the number of beans in that jelly bean jar.  That is what the Home Price Expectation Survey is.

Pre-bubble, the normal appreciate in real estate was 3.6 percent a year.  During the bubble, from the first quarter of 2000 to the second quarter of 2006, appreciation shot up to 10.4 percent - triple what is normally would be.  Well obviously, that was an anomaly.

What happens after an anomaly? A correction. So during the bust,  prices dropped on an annual basis of 5.7 percent. But according to the Home Price Expectation Survey, prices over the next couple of years are going to go back to a 3.3 percent appreciation on an annual basis.

Tomorrow I  am going to be talking about the bulls and bears in this survey, and their projections.

All comments are appreciated.

Professional's Price Increases Forecasts

There are a lot of people, especially at the beginning of the year, like to make their projections - where they think housing is going to be at the end of 2013. JP Morgan thinks prices are going to be up 9.7 percent. Barclay's Capital thinks they are going to be up 5.5 percent. Capital Economics, 5 percent.  Freddie Mac thinks there is going to be a two to three percent in pricing.

Now those are individual entities that are taking a guess based on what their analysis of the market and the market data as to where prices are going to be at the end of the year.  Now people could get caught up into that.  We could love - like the JP Morgan projection.  But let's not take any one group and say they are right or they are wrong.  Tomorrow I am going to blog about the Home Price Expectation Survey.

When is the best time in the annual cycle to purchase a home?

The chart below shows that year over year,  prices are going down at the beginning of the year then by mid-year that start to creep up over last year's prices.  So the year over year comparisons are continuing to mount.  I think that we will continue to see that to a certain degree.

Under $250K Four Bed home for sale - NW Albuquerque w/three car garage

Under $250K Four Bed home for sale - NW Albuquerque w/three car garage.  I have this beautiful four bedroom home for sell in Northwest Albuquerque, near Cottonwood Mall, and Paseo Del Norte.  There is a living room, family room, formal dining room, and eat-in kitchen.  One of the bedrooms is on the main floor, right next to a full bath.

Upstairs you will find a massive master bedroom, with two walk-in closets.  Master bath has a shower and a soaking tub, plus double sinks.  There is a deck off the master bedroom that has absolutely beautiful views of the Sandia Mountains, and the valley. For complete information click here.

Come see this Four Bedroom home for sale in NW Albuquerque with a three car garage for under $250K.

Four Bedroom home for sale in NW Albuquerque with a three car garage for under $250K

Large Family Room Immediately off the Kitchen

Large Master Bedroom with two walk-in closets

This is the view from the upper level. Imagine watching the balloon fiesta from here.

Forecast that 30 year mortgage rates will rise in 2013

The reason I believe that demand is going to keep on coming very strong is a look at mortgage rates.  We are now going back two years on interest rates and we can see almost every single week - because this is a weekly look - it is a little lower than it was the week before.  It seems like we are bottoming out right now at that approximately 3.5%  And there are projections, which I will talk about tomorrow that interest rates might tick up, inch up over the next year through 2013.

But right now there is a demand there.  Home affordability, prices verses interest rate is really in a beautiful place for people.   You can see that prices, whether it be the ten-city composite or the twenty-city composite, are bouncing - bouncing along the bottom there.  They are no longer in free fall.  Again, I think in most of the country right now, we are going to see some nice price appreciation over the next year.  We will get to that latter.

All comments on my blogs are appreciated.  Thank You

Return on Investment on Real Estate over Time

So what is the return on investment of real estate compared to other investments like the Dow, the S&P, and the NASDAQ. Now after the fiscal cliff has been averted, we are going to probably see some jump up in the Dow, S&P, and the NASDAQ.  But we can still see - if we go all the way back to January 2000 and compare it to January 2013 - thirteen years later, we can see that the investment in real estate, in this country - through these crazy time - was better than investing in any of the stock markets.

The Rate of Return for Major Stock Markets January 2000 to 2013

Annual Appreciation of Homes January 2000 to 2013

Know that over time in this country,  real estate has always been a great investment.  Maybe not short term - from 2006 to 2012, but over the long term real estate has always been a great investment.  Any we are starting to see prices picking up.

Demand is up and supply of homes is down

The one thing that I think that could be standing in our way—and this is going to sound funny to some 

of you—is the biggest challenge in most parts of the country is inventory. This chart  shows you the month’s inventory of homes for sale from the NAR existing homesales report. A normal market 

is that yellow line going across. That is five to six months. 

The reason we have had challenges over the last two years as you can see that the inventory was well 

above normal levels. That said that we are in a buyer’s market. There is too much inventory for sale 

compared to the amount of demand there was for that inventory. 

And pricing is all about supply and demand. Supply was way up and demand wasn’t.

 

Well demand is starting to increase. Just take a look at this slide.  And at the same time, inventory is decreasing below normal levels in many parts of the country.  As a nation overall, what does that mean?  Well if demand is up and suppl is down, prices are going to go up and that is exactly what has taken place.  We will address that issue going forward.

I would appreciate any comments on this post.

Placitas NM Banks, Grocery Stores, and Restaurants

Placitas NM Banks, Grocery Stores, and Restaurants. Placitas NM is a community approximately 10 miles north of Albuquerque NM, so if you are looking for the Banks, Grocery Stores, and Restaurants serving this community of primarily custom homes, the map below will help you.

View Placitas NM Banks, Grocery Stores, and Restaurants in a larger map.

Placitas NM is a wonderful, friendly village of approximately perhaps 500 homes, located 10 miles north of Albuquerque, and when I first settled in this area, there were few services.  We had one restaurant, one grocery store, no coffee shops, one local bank, and no drugstore.  But in the last nine years Placitas NM has added Banks, Grocery Stores and Restaurants, a Starbucks, and drugstore, and the surrounding area has expanded the services available to the local residents.

Placitas is about wide open spaces and beautiful views of the Sandia Mountains and the Western Mesas.  I have to say, that I never get tired of these views because they are always changing.
There are various types of homes available in Placitas, from the new one story custom houses with tile floors, granite counter tops, wood ceiling, vigas, and tons of outdoor living space.

To two story homes that are partial ADOBE with grassy courtyards.  Adobe construction is unique today, but was a standard long ago when dirt, water, and straw where the building blocks of construction.  Adobe walls are at least 14 inches thick, and are a great means of absorbing and holding the solar gain, which the walls will release in the cool of the evenings.

If you would like to discuss the Placitas NM Banks, Grocery Stores, and Restaurants, and the other services available to Placitas residents, please give me a call at 505-350-0911 or check my website.  Carol Skees
Placitas NM Banks, Grocery Stores, and Restaurants

Comparison of Pending Sales 2012 to 2011

I want you to see how the last twelve months, the immediate twelve months prior to December, how it looked compared to the twelve previous months to that. So we can look down at the bottom—November 2010 to November 2011 is the light green on this graph. The dark green is November 2011 to November 2012. We can see that 2012 totally destroyed 2011 as far as sales are concerned. And I think we are going to see another big jump up again in 2013.

Now again, are we going to see 2006 levels? No, not any time soon. But 2006 was a little bit of an anomaly. What we are is back to normal levels.

NAR, who puts the pending home sales report out, and has tracked these numbers prior to the bubble what is the historical healthy level of the real estate market. They put that at a hundred. That is the gold line going across the graph. We could see we are super. We have been bouncing off the level over the last couple of months. Now we have definitely jumped above that in a big way. We think we are going to continue to see very strong pending home sales through the next couple of months, which will be a little bit of an anomaly, because that doesn't normally take place during the winter months. But I think we are going to remain strong this particular year.

I would appreciate any comments about this blog, or any other blogs.

Homes sales are going up!

Pending Homes Sales November 2011 to November 2012

Pending home sales continue to go up over last month and over the last year.  Looking back twelve months now and we can see that there is a tidal wave of people coming into the real estate home ownership field.  They have decided that this is what they are going to do now.  It is now time because of home affordability, interest rates being where they are, prices being where they are, and people starting to project increases in both, they are jumping in and saying, "You know what? Now is the time for me to be a homeowner." Checkout the chart of pending sales.

Let me know if you want to know what you happening in your area.  By the way, comments on this post are greatly appreciated.