My New Blog

ABQ REAL ESTATE TRENDS – 2010

1. FORCLOSURES WILL INCREASE, FNMA will permit more foreclosures. Bank owned inventory will grow significantly. Increasing unemployment (10.5% national and 7.9% in NM) is creating the flood of foreclosures. OPPORTUNITY IS KNOCING for both owner-occupied homebuyers and investors!
2. SHORT-SALES WILL INCREASE. More sellers will make application for sort-sales. However, due to the major challenges in getting short-sales to closing in a timely manner, savvy buyers will prefer to pas on the short-sale inventory and go after bank owned properties.
3. FEWER ABQ REAL ESTATE BROKERS. More real estate brokers will leave the business in 2010. The remaining stronger & experienced brokers will be serving area buyers and sellers.
4. STABLE INTEREST RATES. Qualified buyers will continue to take advantage of low interest rates. Low rates makes for affordable homes.
5. DECLINING PRICES. Although price stabilization may be real close in the ABQ market, home prices may continue to decline slightly during 2010.
6. INCREASING UNIT SALES. Due to the extended and expanded buyer tax credit (through 4/30/10), low interest rates, and affordable p4ices, more buyers will purchase homes in 2010.
7. THE “SHINY PENNIES” WILL SELL. Sellers absolutely MUST have their homes in top shape in order to attract a buyer. Professional home “staging” services will be in high demand.
8. CHANGES IN LENDER, APPRAISEER & TITLE COMPANY REGS. Major changes have already taken place in the mortgage, appraisal and d title insurance industries. The new regulations are comprehensive, complex and confusing. The benefit is that buyers should better informed regarding home value and acquisition /closing costs. Predatory lending practices will be significantly reduced. Some “bad” lenders will go out of business.
9. AFFORDABLE HOMES WILL BE IN DEMAND. Sharp homes priced in the $150 to $250 range will continue to sell. Demand for homes priced over $4000 will continue to fall. Opportunity will continue to knock loudly for qualified buyers over $400 price range.
10. TAX LIGHTNING. Property taxes can double for some new owners upon transfer of ownership in Bernalillo County. This negatively affects the affordability of homes in Bernalillo County. Wee cannot predict the outcome of this ongoing issue. As of 1/12/10, there are over 225 lawsuits pending, and we may even see a class action lawsuit initiated soon.
                     It’s A Great Time To Buy A Home In ABQ!

DON’T SELL LOW - JUST SAY NO

This year marks my 31^st year in the Albuquerque, New Mexico Real Estate business and my 18^th year working with buyers, sellers and builders in The Knolls of Paradise Hills. While many buyers are waiting for the national and local media to call the bottom of the housing market, I am announcing the bottom now. Not the entire market, not the entire Albuquerque metro area, but prices in The Knolls of Paradise Hills have dropped enough and we need to call our own bottom despite pressure to act otherwise.

All housing markets are local, but in reality they are micro in scope. Each area, subdivision and, in some case streets and addresses bring different prices. The area defines the pricing. Lately we have lost site of this phenomena and many sellers have bought into “I have to give my house away to sell it.”

Consider the facts; the last quarter of 2008 we only had four closed sales in The Knolls. Contrast this to the fact that there are approximately 500 occupied homes in The Knolls of Paradise Hills. Four sales have not reset the fair market value for the entire subdivision. Extremely low volume of sales motivated by fearful selling has distorted the real picture. Four sales are an event, not a trend. You need much more volume to confirm a trend.

So how do you price your home if you need to sell? Just one word, REALISTICALLY. If you own a production/non-custom home your competition is both in and outside the Knolls. If this is your situation you need to price accordingly and recognize the reality of the market.

If on the other hand you have a custom or semi-custom home on a good lot, JUST SAY NO to giving your home away. There are no other areas like the Knolls of Paradise Hills. Reproduction and replacement costs are astronomical. Excluding Rio Rancho there are very few custom homes available for sale on the Westside in comparable locations.

The bottom line is we need to hold the line on discounting. Next time a real estate agent talks to you about lowering your price, tell him or her you want to raise it!

Chip Muenze
Proud Property Owner in
The Knoll of Paradise Hills

By Cheryl Marlow

     Many buyers and sellers still ap­pear to be sitting on the fence waiting for the market to reach a new high or reach a new low to their favor. What are they waiting for? The market to bottom out so prices stop falling? Are they waiting for the media to announce the "all clear"? For the Fed to stop tin­kering with the interest rates? Or just waiting for the neighbor's house to sell? The truth is that all real estate markets are local. Albuquerque is much better when compared to many of the markets that have made the news. When everyone is reading the Wall Street Journal and listening to the national news and gimmicks on how to purchase a home 50% below market value, it creates a "sky is falling" men­tality. This then becomes an unrealistic picture of what's really happening here on the home front. Remember, news­paper and television is designed to ob­tain high ratings. They are not designed to sell homes. One headline screamed "Prices Plummet!" When I read the ar­ticle, the prices were down 1/2 of 1 %! Hardly what I would define as a plum­met!

     I just want to be a voice of reason. Here's a local perspective--   Even though Albuquerque was never hit by the worst of the real estate bust that began last summer, the chill­ing effect was felt here, true. Inventory of homes available is higher than I've seen in twenty three years in the business. Sellers must be more realistic about pricing their home and how their home truly compares to the other prop­erties available. Most sellers truly be­lieve that their home is the best in the neighborhood. On the flip side of the same coin, many buyers are trying to find that "50% below market price home' they heard about on late night TV. Interest rates are still very low and that creates real savings for buyers in the long term.
    
     In cities like Las Vegas and Phoenix, the record number of foreclo­sures created a glut of inventory. Albu­querque foreclosure rates rank low in the national statistics. In fact, a closer look at individual markets shows that smaller cities like Albuquerque, Okla­homa City, and Austin have solid prospects for 2008.
    
      Housing Predictor ranks Albu­querque 21st in the Top 25 Appreciat­ing US Markets for their 2008 projection. Interestingly, the top mar­kets for 2008 are scattered throughout the U.S. with no geographical region stronger than another. Instead the fac­tors are evidence of a strong trend that is developing in the United States. There's no doubt of a trend that people are moving to smaller cities. The fore­cast...more people are moving to smaller less-urban cities seeking a bet­ter quality of life. Albuquerque is posi­tioned to gain from this trend. This is great news for both buyers and sellers!

What is a Tax Defered Exchange?

Tax deferred exchanging is an investment strategy that should be considered by any­one who owns investment real estate. The IRS's regula­tions make exchanging easy, inexpensive, and safe.

In an ordinary sale trans­action, the property owner is taxed on any gain realized by the sale of the property. But in an exchange, the tax on the transaction is deferred until some time in the future, usually when the newly acquired property is sold. These exchanges are some­times called "tax free exchanges", because the ex­change transaction itself is not taxed.

Tax deferred exchanges are authorized by Section 1031 of the Internal Revenue Code. The requirements of Section 1031 and other sec­tions must by carefully met, but when an exchange is done properly, the tax on the transaction may be deferred.

In an exchange, a proper­ty owner simply disposes of one property and acquires another property. The trans­action must be structured in such away that it is in fact an exchange of one property for another, rather than the tax­able sale of one property and the purchase of another.

Today, a sale and a rein­vestment in a replacement property are converted into an exchange by means of an exchange agreement and the services of a qualified intermediary, a third party who helps to ensure that the exchange is structured properly. New Homes of Albuquerque can refer you to a qualified inter­mediary.

Please contact us if you would like further information.