Albuquerque Home Sales Year End Summary 2014

Albuquerque finished out the year down 2.12% in sales of existing homes with this year’s 6,645 homes sales slightly off the 6,789 homes sold in 2013. (Note I’m talking about the city of Albuquerque, not the entire metro area.) That may look like a poor showing, and we’d like to see better, but it’s quite similar to the nation as a whole. Consider also that December saw an increase in sales, with 519 homes sold in Albuquerque, a 6.79% increase over the 486 homes that sold in December of 2013.

That December jump in unit sales followed a 2.92% increase in sales this past November over November 2013, which slightly exceeded the November national sales increase of 2.10% year over year.

Back to the year as a whole, ABQ’s 2.12% decline in unit sales is less than the national decline of 3.14% and far better than the decline in sales numbers for the western states, which as whole saw a 7.56% drop in home sales from 2013 to 2014.

(It’s somewhat of an apples to oranges comparison to look at Albuquerque compared to the nation as a whole, or even the western states collectively – an urban area against an entire country or region – but as long as we recognize that, it’s still a reasonable bit of perspective. And heck, Mom, everybody else does it…)

December saw a .91% decrease in the median sold price of a home in Albuquerque, from $176,605 in December 2013 to $175,000 this December. On the other hand, for the year the median selling price of a home rose 2.34%, from $171,000 in 2013 to $175,000 in 2014. That may sound bully for Burque, but if we compare those numbers to national and regional trends, not so much.

The median price of a home sold in the U.S. rose 5.78% in 2014 over 2013. For our western states that price rise was even stronger at 6.92%. Albuquerque tends to lag the rest of the U.S. and even the west in most housing trends. Inventory for the year declined nationally, while Albuquerque seems be exceeding 2013 at this point in inventory. That’s a big price driver and until ABQ tightens like the rest of the country, we’re lacking that engine.

It also looks like ABQ is still holding more foreclosures (REO) than the rest of the country.  The U.S saw a 14% decline ion REO sales while Albuquerque saw only a 9.58% decline. REOs also keep prices depressed and as ABQ’s inventory of those drops, prices should rise.

Economic factors also play a big role, obviously, and the folks you and I have voted into office over that last decade or so have done a poor job of managing the New Mexico economy. Smarter work in that area, which, of course starts with smarter voting by us, can help. We did see some changes in our political landscape and we can only hope they’ll result in smarter policies.

This is a Table View of Albuquerque Real Estate Sales Statistics for December and the year ending 2014

REO sales may also factor into the slight decrease in December home sale prices. While over the course of 2014 we’ve seen month to month declines in bank owned homes on the Albuquerque market, we did see an equal number of sales this December over last. That tells me buyers, particularly investment buyers looking to spend money before the end of the tax year, spent the last months of the year looking for bargains, found them and spent December wrapping the deals up.

Regardless of what happened in December, both REO sales and short sales have declined this year as I’ve mentioned. In 2013, Albuquerque had 1002 bank owned homes sell while we saw that number decline 9.58% to 906 sales in 2014. Short sales fell a whopping 37.43% from 513 sold in 2013 to 321 homes sold in 2014. That’s still way too many properties. REO and short sales accounted for 18.47% of all home sales in Albuquerque. For perspective, the percentage of REO and Shorts that sold in 2013 was 22.32% and in 2012 it was 26.72%. Clearly the trend is improving so far.

If it does that’s great news for sellers. As problem properties drop out of the market, prices will rise. I think we’ll see just that scenario in 2015 – fewer distressed or problem homes on the market and related upward price pressure. That’s not great news for buyers, but with mortgage prices still at historic lows and the very slow increase to date of home prices in our region, there are still many, many good deals to be had. Buyer’s who get in now will be in very good shape over the coming years and decades.

The median asking price for a home in Albuquerque rose 6.47% over last December and the yearly median asking price, the average of the median home price on the 15th day of each month over the course of the year, was up 2.70%. That indicates a certain degree of seller confidence. We’ll find out in coming months if that confidence is misplaced or not.

The below chart shows how homes sales in Albuquerque spread out over price range. If you look through it you’ll see weakness in the lower price ranges and at the very top. The only consistent area of strength seems to be in the $250,000 to $700,000 price range, with the sweet spot being in homes sales between $300,000 and $500,000.

This is a Table View of Albuquerque Home Sales by price range for the year ending 2014

I expect there’s a few factors there. One, those low range prices are where the vast majority of distressed sales are and as they’ve dried up, it’s having an effect at those price points. A second factor is buyers in those ranges are having more difficulty getting loans because of tightened lending criteria. Add to that a real lack of confidence by buyers in those ranges – buyers who are not ready to try home ownership and are renting a bit longer. Finally, investor buyers may have snapped up what they think are the best of the deals in homes that cap out well for rentals or flips.

The chart below shows asking prices for homes this year and last. This is the total number of homes that entered the market during the year in each price range. It’s a little screwy because if a home drops from one price range to a lower one, it’s counted more than once and if a home expires unsold and re-lists, it’s also going to count more than once.

Regardless, it gives a picture of asking price trends, and shows a trend similar to sold homes – fewer homes listed in the lower price ranges.

This is a Table View of Albuquerque active home listings by price range for the year ending 2014

The chart below shows asking prices for homes this year and last. This is the total number of homes that entered the market during the year in each price range. It’s a little screwy because if a home drops from one price range to a lower one, it’s counted more than once and if a home expires unsold and re-lists, it’s also going to count more than once.

Regardless, it gives a picture of asking price trends, and shows a trend similar to sold homes – fewer homes listed in the lower price ranges.

– Joe LaMastra, January 31, 2015