December saw a decline in the number of homes sold in the Near North Valley area of Albuquerque, but for all of 2014 sales were up nicely over 2013. More of a concern is the decline in selling prices, dramatic for the month of December and significant for 2014 over all.
This December saw 7.79% and 18.86% declines in average (mean) and median home prices respectively. December also saw declines in both metrics for price per square foot, from $136 to $112 on average and from $121 to $111 on the median. The year saw only a 2.42% decline in the average price per square, from $124 to $121 and actually saw a slight bump in the median price per square from $118 to $119.
One thing that may be influencing those drops are the number of foreclosed homes (REO) that sold. While Albuquerque as a whole saw an almost 10% reduction in the number of REO sales in 2014, the Near North went from 32 REO sales in 2013 to 42 REO sales in 2014. That’s a 28.13% rise. That alone was likely a big factor in the year’s lower sales numbers. Not only do REOs sell at lower prices than equivalent owner sold homes, they also tend to sell at the bottom of the market in general. Nine more REO sales in 2014 could easily drag both the average and the median down by loading the bottom of the range.
December is a little trickier, since there was no change in the number of REOs (2). That would bring us to the second possible factor and that’s simply buyer choice. By the end of the year, most home buying in Albuquerque was at the bottom end – likely investor buyers snapping up the best deals at the lowest prices before they wrapped up their tax year. In fact, Albuquerque as a whole also saw declines in both average (-3.27%) and median (-.91%) prices for December, though clearly less dramatic. The Near North looks to have followed suit and “outperformed” ABQ.
The strong 15.29% uptick in sales for the year also supports the idea that buyers were looking for deals. It’s very possible that we’re going to see prices climb after the first of the year, especially if bargain hunters cleaned out the bottom of the bins.
Also worth noting is we’re talking about a fairly mixed housing stock in this area. Everything from small, outdated homes on less desirable streets close to heavy commercial and industrial spots, to elegant homes on well kept streets deep in the Bosque. The Bosque neighborhood of Thomas Village, for instance, saw a reasonably solid 2.5% gain in both average and median home prices for the year, while the neighborhoods closer to 2nd Street saw price drops that exceeded 7% and often closed on 10%.
If you’re thinking about selling or buying a home and would like a more specific analysis of a particular area, neighborhood or home, drop us a line and we’ll put one together for you.
– Joe LaMastra, January 26, 2015