Albuquerque Real EstateTalk Radio – July 11, 2015
Eddy Aragon: AM 1600 KIVA 95.9 FM – The Real Estate Hour. We’re getting kicked off with Tego and Tracy Venturi, my two favorite people on real estate. And if you meet them, they’d be yours too. Good morning, Tego. Good morning, Tracy.
Tracy Venturi: Hey great to be here. Thanks for having us today, Eddie.
Eddy: As always love the update. Hope you had a pleasant holiday celebrating America’s Independence and two hundred and wow thirty nine years. Can you believe it?
Tego Venturi: I know. Tracy and I kind of we’re kids in the 70s and remember that bicentennial thing that was such a huge deal in ’76. I was in elementary school and that was that long ago – 39 years.
Tracy: That seems like yesterday.
Tego: Yeah, I know.
Tracy: You’re doing the whole constitution thing. That was commendable.
Eddy: Well, I think it’s important that we talk about one of the most patriotic things that we can do or the best things about our system is that people can buy real estate. You can own your own home.
Tego: That’s right.
Eddy: There’s nothing more American than that. Think about that.
Tego: Exactly and we can shoot our fireworks, “Come on,” and all my fingers are still here.
Tracy: That huge bottle rocket, I don’t know what those are called that came into our backyard.
Tego: I know we had our neighbour shooting stuff over our house. Luckily it was wide enough that I wasn’t too concerned about it.
Eddy: To put it in context, I think this is important, you guys live close to work and the place where you guys reside right there along the Rio Grande has a lot of action but that’s kind of a growing area. It’s really fantastic in your new office, I guess, coming up here in just a couple of months?
Tego: Obviously we do residential real estate. Walt’s a commercial guy but we’re generally in that cut wood corners area, 550 or 528, Alameda, Coors, that whole area. I mean, it is going crazy, they just raised a building over there so to build another strip mall because there’s not enough strip malls in there. It’s amazing.
Eddy: The traffic and the growth in the area and the place it’s really essential in Central and it’s nice to see. Also, there was a slight up taking interest rates over these holiday weekend so we’re starting to see exactly what both of you forecasted which is an increase in interest rates so now is the time to release it. We’ve been waiting for it and we’ve been talking about it for two years but literally, it’s coming up right now.
Tego: You know what’s interesting Eddy and Tracy, I was talking with the lender yesterday about the things going on and there’s a lot of programs. They keep rolling out more and more programs.
Back in 2010 it was tough, there was limited programs available for people. But now there’s more and more, there’s more options for self-employed people. If you thought you are locked out of the real estate ownership deal just because the lending standards have been so tight, you may want to look at it again.
Tracy: Absolutely, and that was like the perfect intro because one of the things we’re going to cover today is the whole rent versus buy story. We do see that interest rates have ticked up a little bit but that doesn’t mean that you can’t afford to buy a home.
Tego: Steal a bargain. Hey, by the way this is Tego Venturi and Tracy Venturi with the Venturi team of Keller Williams Realty.
If you want to get a hold of us talk about real estate, if you’re interested and get a market analysis or anything going on, if you’re looking to buy a home obviously that’s what we do – you can reach us at 933-6881 or online at welcomehomeabq.com
Tracy: So Tego, let’s tap into your vast knowledge on market data. I know you just did a half yearly update on our website for what the real estate market has done the first half of the year. What are some of the takeaways?
Tego: I did. I did a video blog that we’re going to be sending out. It’s not ready yet.
Tracy: Not online yet.
Tego: You saw me record it but it’s not produced yet. Not that it’s some big high production but I thought it would be good, we’re halfway through the year. This has been the busiest year we’ve had since 2007 so far this year. So, the market is moving in the right direction.
Tracy: When you say, “the busiest year,” what does that mean? What are you talking about?
Tego: Let me give you some of the numbers.
Tracy: Is that a house that sold? Or house prices?
Tego: Unfortunately not necessarily prices. If we look at houses sold this year, we’ve sold – when I say, “we” what I’m talking about the metro – the greater Albuquerque area.
There’s been 5,300 homes sold in the first half of this year. By comparison last year was 4,700, a year before that 4,800; 2012 – 4,100; 2011 – 3,700. If you go back to 2009 that was 3500 that was really the slowest time we substantially had versus the last 10 years.
Tracy: So 3,700 in 2010 versus 5,300 year-to-date this year?
Tego: Exactly. The other thing that’s happened the first half of this year is the supply has declined below that six months inventor. And that’s the number we always look at – month supply of inventory, number of homes available versus the number of buyers and how many month supply that we have if no other homes come on the market.
We dipped below at the beginning of this year, that six-month number. And the average for this first half of the year we’re right around five and a half months, we’re actually lower than that right now here in July.
Tracy: Great. So one of the things that kind of correlates to that is, “Where do we have really what we would see as a shortage of homes and not statistically, so to speak?”
We have several people that specialize on our team working with home buyers and they’re out every day showing houses so they really have the pulse to the market.
And when we sit down weekly and just kind of talk about the market with the team, what we’re noticing is there are certain neighbourhoods, there’s certain price plans, certain types of houses where they just can’t find them or when they come on the market they’re selling quickly.
Tego: Tracy, you deal with that more than I do. So what do you see as the hot areas and the hot type of home right now on Albuquerque?
Tracy: Sure. If you’re thinking of selling and you are in the North East anywhere near North East or whatever, you have a house that’s in nice condition around the 175,000 or below, we need that house on the market right now if you’re thinking of it.
If you’re in the far North East, you have a single-storey maybe $300,000 to $500,000 house, that’s also in-demand. We’re seeing a big shortage of that.
Tego: You said single-storey and that brings us back to this discussion we’ve been having over the last months here about the change in demographics and there does seem to be a demand for more single-storey less two-storey. Would you say that’s fair?
Tracy: It’s true and the less steps are better. I have some folks coming in to town next week that are going to be working with Anna Marie. They want not a step, they don’t want it at the front door, they don’t want to step down into a living room – nothing. And we’re seeing a lot more of that.
Tego: Tracy, let me go back to the June numbers. We kind of talked about what’s going on. And the short of it is for the first half of the year, the market is trending up. Prices have increased slightly but we’re talking about average price.
An average price could reflect the fact that more homes at a higher price point are selling than the lower priced homes and of course we know that Tracy, right?
Tracy: We do and so when you say that, what you’re really saying is the same house last year versus the same house this year could still be the exact same price or market value.
Tego: I mean there’s so many different ways to look at those numbers. I think if you go back to last year, we were tracked in somewhere around two and a half or three percent appreciation. I would say we’re probably about there right now.
Certain areas, certain homes, certain parts of town is probably better than that – certain price points the higher end. I don’t think there’s a whole lot of appreciation right now in those real expensive homes because we do still have quite a bit of supply.
We’re at the event the other day, Tracy, talking with the New Mexico Select Group which is a group of realtors that generally does higher end homes. And some of the properties that are being presented is there’s some bargains out there in that higher end.
Tracy: There really are and Gary Tonjes was there at our meeting this month.
Tego: With Albuquerque Economic Development.
Tracy: Right just this week. It was interesting because you asked him a question and it was kind of surprising.
He said when they’re talking to out-of-state companies and trying to recruit them to come to New Mexico or specifically Albuquerque in his case, they don’t tend to look at the availability of housing or the cost of housing as one of the main factors when they’re thinking about why to relocate to our area.
Tego: I found that surprising because Gary Tonjes and that whole group at AED, they do amazing work.
Eddy and I were talking about this before we came on is they worked so hard to bring businesses here. And I find it surprising that housing isn’t one of the check marks because we talk about all the check marks and like right to work. We don’t want to get into that one Eddy, do we?
Eddy: No, we don’t want to politicize anything.
Tego: We don’t want to go into the whole “right to work” thing but that group has done a great job.
Actually there’s been some great progress in the whole making New Mexico way more competitive to businesses coming here. But I found that it was interesting because in Albuquerque our housing is reasonably priced and we still have good supply unlike other markets.
Tracy: Right. He was talking about one company that we lost out to the Dallas area. Now, they’re there and their people they’re recruiting that need to move into the area because they’re relocating their world headquarters there. They cannot find houses for all the people they’re trying to relocate because of this shortage of homes.
Tego: That highlights a really good point as we get these national stories a lot of time on housing that come from the AP or whatever. They talk about the big picture, boy, real estate is so local.
And just between Dallas, in Denver, in Albuquerque – if you do the comparison, they’re totally different worlds. Both of those markets, Dallas and Denver even Phoenix in some areas – they have a shortage of homes to sell.
Tracy: Our time flies so after the break we can get back to the rental topic that we’re going to talk about, “Should I be buying or renting?” And what it costs to buy versus rent.
Also a little bit more on the market stats and then we’re going to talk a little bit about rain, I assume, because that’s on my agenda this week.
Tego: There’s a whole lot of that going on this week and it’s been great. I looked at the numbers for elephant view, it’s filling up.
Tracy: If you’d like to talk real estate with us, call our realtor on duty line 933-6881. We’d love to talk to you if you’re thinking of selling or buying.
Eddy: Elephant view – those numbers were over the top, weren’t they? It wasn’t like double, it was nearly triple when it was two years ago. You think about that.
Tracy: And they had record people there too.
Tego: We live near the Rio Grande like we talked about earlier and driving across the Alameda Bridge and you look down there go, “Holy cow that’s a lot of water flowing down that river.”
Eddy: The state overall was a huge growth in Tourism, “Hey you need to start locating some of those people from Dallas [0:12:11].
Tego: I know, I know.
Eddy: Waiting for some of those dog and pony shows.
AM 1600 KIVA 95.9 FM and 107.5 FM and worldwide in ABQ.FM back in a moment.
AM 1600 KIVA 95.9 FM Fox News ABQ – Tego and Tracy continue with the Real Estate Hour.
Tego: Eddy, we start to talk about this and now we’re going to go back to it as the June numbers. We just ended the month and it was another strong months. Lots of homes went pending, average prices are still around that $200,000 range and we’re just continuing seeing good activities.
There are some frustrations in the market though right, Tracy? Certain areas maybe Westside Rio Rancho although those markets are up. There still more supply than other parts of town, right?
Tracy: Right. Homes there aren’t selling as quickly as another parts of the city for sure. Of course it all depends on the presentation, the price, the location – all these stuff we talk about all the time.
Tego: Exactly of course. We want to talk about renting versus owning, Tracy. We’re getting a lot of calls for homes that we have listed for sale. People say, “Hey are they willing to rent it?” Because there seems to be a demand for rentals and there’s not a good place to go to find homes for rent, right?
Tracy: It is hard in our market. Some cities like Phoenix, they have a database where all the rentals go on and they compensate realtors to go show rental houses. Here we don’t have a single database where our renter can just get on and find every rental available and then find someone who will actually show it.
Here it’s a lot more difficult to actually see a rental so it’s tougher. But we’re in the businesses selling houses and so we’re going low. And if you’re having trouble finding a house to rent, why don’t you think about buying, right?
Tego: And we of course always talk about that and right now there’s always different rent versus buy calculators online.
Tracy: Totally. Just getting ready for our show today I got online and I’ve got a couple my own from some title companies and I did, “What’s this scenario if I want to rent and I’m willing to pay 1200 a month or 1300 a month? What is that equate to in a house?”
Tego: What does that equate to in a house? Let’s say rental raise or somewhere for a nice average – three bedroom, two-bed house just kind of standard home there in that 11, 12, $1300 a month rent right now.
Tracy: Unless you’re in the far North East in which case there even more.
I just look at what’s a nice house in Albuquerque like let’s say 200,000. Can I find one for 160? Yeah probably in the North East, have to search through them a little bit. Let’s say you want to get a $160,000 house – that would equate to a down payment requirement of $5600.
Tego: We’re talking about 160 right?
Tracy: Hundred and sixty thousand dollar purchase price.
Tego: And down payment is three and a half percent.
Tracy: Three and a half percent which is $5600 and that would equate to with insurance and taxes on the house so not just the house payment itself, about a thousand dollars thousand fifty a month.
Tego: Okay. And then if you figure in the tax savings on that because you can write off that interest, right? You get a little bit of bonus there.
Tracy: Right. When you do your taxes every year so you’re going to have some interest deductions for owning a house.
Tego: So why would somebody want a rent versus owned?
Tracy: Well they may have low credit or maybe they’re not planning to live in our market or in that area for more than a year or something.
Tego: And to me that seems like that’s the big one, it’s a short-term commitment. When you purchase a house it’s a little bit more long-term commitment, right?
Tracy: It is because there’s closing cost involved in selling a house. If you’re not going to be in it for very long, it doesn’t make sense to buy.
But it certainly makes sense if you’re going to be in the Albuquerque area for a couple of years or more that now is the time to buy to lock in your monthly housing expense for the next 30 years.
Tego: Thirty years.
Tracy: Let’s talk about the $200,000 house, I mean you can get a really nice house.
Tego: You can.
Tracy: Almost any part of the city whether it’s Rio Rancho Westside, North East South East Four Hills, Mesa del Sol, you can get new or resell homes. So for $200,000 house with an FHA loan which would be three and a half percent down payment that’s $7,000 down. And the monthly payment with interest I mean insurance and taxes roughly is 1300 a month.
So that’s a really nice house – you own it, you get to decorate it how you want, you get to make your kids rooms the way they want them, you can remodel, you can change walls if you want, you can do things in the backyard that are more permanent that are yours.
Tego: So I want to go through some of the advantages and disadvantages of home ownership and let’s be honest there are some disadvantages okay.
One of the things you hit on advantages-wise is it’s yours. You own it, you get to do what you want to do. You don’t have to ask a landlord if you want to paint the rooms or do some thing or get a pet or whatever.
The other thing is some privacy, it’s yours. You do have some gain privacy. And in home ownership usually is a good investment. Obviously that we had above all and that that create us some problems back 10 years ago almost now, “Wow it is almost 10 years ago.”
But then you also stabilize your housing cost so just because you bought at a peak time in the market eventually even if the pricing goes down eventually it’s going to come back and then you get the tax exempt if you can write off the interest in most cases to find your home.
Tracy: In which helps you pay a lot less in your taxes every year to the federal government.
Tego: Exactly. And you know what one of my favorite one is about home ownership is it’s forced savings in the sense that instead of spending that money and you’re paying your landlord and paying your landlord’s mortgage, you’re paying your own mortgage and you’re building equity overtime so it’s a forced savings.
Tracy: Right, which many people wouldn’t do otherwise.
Tego: Some of the disadvantages Tracy is it is a long-term commitment. I think if you’re going to only be here a year so it probably doesn’t make sense to buy.
You got to realize that you’re going to be now responsible for the maintenance and repair and that’s just part of ownership – the pride of ownership. And we’re going to talk about that with roofs, aren’t we?
Tracy: We are. We’re hoping to get to that here before we run out of time.
Tego: There’s a upfront cost; you need a down payment. But with the programs we have in the state, there are some down payment assistance programs as well as the FHA program that’s only three and a half percent.
Tracy: That’s right and you can’t get a loan for your down payment. If your parents or your siblings or somebody wants to give you the loan for that – you can’t but you can get a gift for that down payment so it’s very doable. We’re not talking about 20% down, we’re not talking about 32,000 or whatever but like in 7,000 on a $200,000 house.
Tego: I want to reiterate one thing, there are some great down payment assistance programs here in New Mexico. The New Mexico Mortgage Finance Authority has some great programs and they’ve got hero programs for teachers, fire fighters, policemen, that kind of thing. There’s military; there’s FHA; there’s the VA. VA loans are the best loans out there right now, zero down.
Tracy: And there’s [0:20:04] program as well. Just call our hotline for questions. We know the resources, we can get you connected to the right people to help you find out what program would work best for you. The number is 933-6881.
Tego: So Tracy let’s segue way into this whole maintenance thing. We’re just talking about that one of the disadvantages of home ownership is home maintenance. I think some people like myself kind of like doing maintenance.
Tracy: That’s what I was just going to say. Let’s talk real here so you like those projects around the house.
You like to have a room that needs to be painted or whatever. You like to be able to build a deck on the house which you’ve done so a lot of people do. And we get to choose to have three dogs if we want them because we own the house.
But one of the things that comes up and I kind of think of it as a good thing is every year for those people that have flat roofs and tar gravel and just most roofs.
Tego: Well any roof, you can pitch the roof.
Tracy: Everything resealed around [0:21:04], around roof penetrations, wherever there’s a vent pipe coming out of your roof – every year or two you should get up on the roof with that black tar or whatever and seal everything.
Or hire somebody, it’s like 80 bucks to have somebody to go do it for you. But I kind of like it because you always put on really old jeans that you shouldn’t have around in the closet anymore, right?
Tego: Yeah and I climb up there.
Tracy: And you climb up there.
Tego: Oh I thought you were talking about you like this in Tego up on the roof.
Tracy: Tego goes up on the roof but it’s a good reason to get some clothes out of the closet that are going to get black tar all over them and then you get to throw them away.
Tego: Obviously with all the ring we’ve had, people are discovering roof leaks that they didn’t know they had. And that just happens of course because we get these real long dry spells and certain things dry out and then when we get these heavy rains obviously it all happens at once.
Tracy: The other thing you’re noticing is all the roofers are really busy and they don’t have time to come out and handle your roof so it’s one of those things to be proactive about.
Tego: Absolutely. And that’s one of the things I’ve talked about every year is getting up on your roof if you’re comfortable doing them. I know some people are not comfortable getting up on their roof well I get that.
Just take a look at it, go around, make sure it looks good or get a roofer to come out and look at it. Because of course if you wait until it’s raining like it is now, you’re not going to be able to get a roofer out there. It’s just one of those preventative maintenance things you should be doing.
And of course in New Mexico with our semi flat or flat roofs and the tar gravel roofs, they can be a little more susceptible to it. Although it’s our gravel, as long as they’re maintained they were great obviously.
Eddy: Get a place to be a roofer.
Tego: Well at least right now.
Eddy: And April.
Tego: We can’t get them out at the moment. We got a few go-to people that do us favours but it’s a little bit tough right now to get a roofer out.
Eddy: Don’t forget always get a roof inspection before you even decide you’re going to go. That’s part of the inspection, is it not Tracy?
Tracy: It is. When you’re buying a home, the full-home inspector does look at the roof and if they’ve see things they might say, “Hey let’s get a licensed roofer to inspect it further.”
Tego: Again going back to the whole home ownership, part of home ownership is preventative maintenance. And to certain extent it give you that pride of ownership, you’re taking care of something – it makes you feel good. Eddy you know, right?
Eddie: The best way to love something is spend time with them. Not pay somebody else to do it but learn about it.
Tego: For sure. Well thanks again for having us, Eddy.
Eddie: As always.
Tego: This has been Albaquerque Real Estate talk, if you want to catch us we are at 933-6881. That’s the Venturi Team Realtors with Keller Williams Realty.
Eddy: Back again with these guys again next week. Thank you both and we’ll see you next week here on the Real Estate Hour here on AM 1600 KIVA 95.9 FM and 107.5 FM.