Ten homes sold in the UNM area’s Pueblo Alto neighborhood during the first half of 2016. That’s one more than sold in the first half of 2015, but with such a small number it represents essentially a status quo selling period. We also saw a price drop, with the mean selling price of a home down 2.31% from $226,489 in 2015 to $221,247 in 2016 and the median price down 11.11%, from 247,500 to 220,000.
The median, half the homes sold below and half the homes sold above, is often used in large areas like the whole Albuquerque market, because it’s less influenced by the highest or lowest prices and focuses on the middle of the market. In a smaller area like Pueblo Alto, the mean, what most folks think of as the average, may be just as useful. Whichever is used, it looks like prices have dropped in PANA this year compared to last, but selling price is only part of the story.
Another part is the size of the homes that have sold. Over the first half of 2015, the average home sold in PANA was 1840 square feet and the median 1785 square feet. Over the first half of 2016 those homes shrank to an average size of 1532 square feet and a median size of 1610 square feet.
I should note here there that, according to the tax roles, there are about 490 single family homes in Pueblo Alto and the median sized home is 1,652 square feet (with 490 homes and some serious size variations on the fringes, the median is the better number to use). So in the first half of 2015, larger than average homes sold. In the first half of 2016, somewhat smaller than average homes sold.
So while buyers paid a hair less for a PANA home on average this year over last, they got a much smaller home for their money. That’s reflected in the sharp increase in price per square foot (psf) paid. First half of 2015 the mean psf was $129. In the first half of 2016 that psf increased dramatically to $150.
However, keep in mind the small sample size. When we’re talking about less than a dozen sales, just one or two homes can make a big price difference. That brings us back to the median price, which still rose from $138 in 2015 to $148 in 2015, a 7.25% increase. Since both the mean and the median are close, it’s safe to say that right now sellers are getting about $150 per square foot for an average home in Pueblo Alto.
The high sale of the neighborhood, a home sold in the 700 block of Adams Street at $298,800, was pretty close to the high last year of $299,900, a home in the 900 block of Truman. The low this year, a bank owned home in the 700 block of Manzano, was $139,000, about 7% less than last year’s low of $150,000, also a bank owned home which sold in the 700 block of Truman.
The list to sell ratio was 95.87%, meaning buyers got just over a 4% discount. In the first half of 2015, the list to sell was $96.39% so buyers were taking a bit less than a 4% discount. So far this year, sellers have had to drop their prices in negotiation a bit more than last year. The overall Albuquerque list to sell is running closer to 97%, a 3% discount.
For the first six months of 2016, the difference between the selling price of sold homes and the asking price of all homes in PANA, sold or not, was wider. The market to sell ratio was 93.83% or just over a 6% spread. That gap was only 4% in 2105, suggesting sellers may be a bit overconfident this year.
Homes in Pueblo Alto are definitely selling faster – twice as fast as the first half of 2015. The mean time on market is 60 days so far this year and the median 33 days. That’s a critical number for sellers. A wise seller will price their home to receive an acceptable offer in that one to two month time frame. When a home sits on the market longer than that, it risks being stigmatized as overpriced or worse, damaged goods.
Doesn’t mean you can’t take longer to sell a home, just that your eye should be on that time frame. Sellers who are not seeing lots of showings and at least an offer or two within that 30 – 60 day window should be rethinking their price or the way their home is being marketed. Any broker can put a home on in the multiple listing service and put out a sign. Good brokers do more than that.
Nineteen homes were available for sale in Pueblo Alto during the first six months of 2016, and 15 of those came on the market during that time (the other four were on the market prior to January 1st). In the first six months of 2015, 23 homes were available for sale and 17 of them hit the market in that period. Like the rest of Albuquerque, inventory is tighter in Pueblo Alto this year. The “absorption rate,” the theoretical amount of time it would take to sell out the market if no more homes became available, dropped from 6.71 months in the first half of 2015 to 3.97 months in 2016.
An absorption rate of 4 months is considered a seller’s market. Typically, seller’s markets see price increases due to tight inventory and buyer demand and arguably we’re seeing that in the higher price per square foot buyers are paying.
Some of the trends seen in Pueblo Alto are also seen in Albuquerque overall. Less inventory and higher prices per square foot being paid. Albuquerque has seen slightly rising prices – close to 3% both mean and median – compared to PANA’s drop, but the square foot price is more telling. And here comes a slight Feel the Bern Moment…
While that says seller’s market, it also suggests there’s an economic factor keeping buyers, in essence, close to what they’ve paid over the last year or so. In Albuquerque there is strong buyer demand, but limited buyer ability to pay above what they’ve been paying. The result is strong buying activity while at the same time, buyer’s buying smaller homes to keep their paid price down. The economy of Albuquerque seems to have a ceiling, keeping most buyers at a specific price point, and the stronger market is favoring smaller homes.
If you’d like more information on Pueblo Alto or are interested in the value of your own home, drop me a line. If you’re a buyer looking at Pueblo Alto and want an opinion of value on a home you are considering, I’m also happy to help –
– Joe LaMastra, Realty One of New Mexico, July 8, 2016