ALBUQUERQUE, NM REAL ESTATE UPDATE FOR DEC, 2008

RATES DROP AND BUYERS FLOCK

The 30-year mortgages have dropped steadily as efforts are made to stop the national housing crisis. The Feds are talking about increasing the cap for jumbo loans which will free up buyers for those homes over $600,000 that sit for a long time in our market now. Fixed 30-year rates are below 6% for the first time in months and 15 year rates are hovering just over 5%. Listing prices continue to come down as sellers become more realistic in what the market sees as the worth of their home. The high assumed appreciation dreams have become realistic gains. We have and will continue to see actual home sales go up so no one is really losing value here unless the house has not been maintained. Whereas buyers used to see price reduction as a red flag indicating something was wrong with the home, now they see it as a positive indication that the seller is getting more realistic. What a great time to buy--- lots of inventory, low rates and realistic sellers! What else could one ask for?

It’s actually a good time to sell to because buyers are out there looking with access to good loans and the inventory has not ramped up as it does in Spring. The number of homes that went under contract in January here was significantly increased over the last several months. As other parts of the country begin to show sales, we expect even more out-of-state buyers to come here.

The new home market in ABQ has yet to sort out. Nationally the sales of new homes plunged by a record amount in 2007 and builders have huge backlogs of unsold homes. We are not much different here. Builders have pulled back and I would like to see them target the first time homeowners again. We’ll see.

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