Coldwell Banker Legacy Real Estate - Blog

Housing Market Turns a Corner

janet.bishop@coldwellbankerlegacy.com — Tue, 12 Feb 2013 00:00:00 GMT

Housing market turns a corner

By Richard Metcalf / Journal Staff Writer on Mon, Feb 11, 2013

The market for existing home sales in the Albuquerque metro area appears to have finally turned a corner in 2012. These homes are located on near Layton and Academy NE. (ADOLPHE PIERRE-LOUIS/JOURNAL)

The volatile housing market turned the corner here in 2012, with data from the Greater Albuquerque Association of Realtors showing the first dramatic movement toward a balance between supply and demand in five years.

The upshot is the average sales price for a detached single-family home eked out a modest 1.7 percent gain, moving from $201,513 in 2011 to $204,513 in 2012, which is the first real improvement in home price since Albuquerque’s comparatively mild housing bubble burst in 2008.

“2012 was the first time I’ve had multiple offers on properties in years,” GAAR President Julie Greenwood told the Journal. “I was floored. I hadn’t expected it.”

(Journal)

The average home price rose despite one out of every 10 home sold in 2012 being the short sale of a distressed home, often in foreclosure. Short sales are usually priced to the market in Albuquerque, said Peter Parnegg, co-owner of Coldwell Banker Legacy.

CoreLogic, a real estate analysis firm, has said that given strong demand from investors and others, the number of distressed properties is unlikely to drag the market down this year.

Key to the Albuquerque market improvement was a reduction in the supply side of the housing equation. Data from the Southwest Multiple Listing Service, a GAAR subsidiary, shows on average the number of homes for sale each month dropped by one-third from 6,579 in 2008 to 4,334 in 2012.

“The inventory is going down,” said GAAR Executive Vice President Janice McCrary. “That can only be good for the market.”

The 6,579 home listings in 2008 is easily the highest monthly average of homes for sale since 1996 and, possibly, in the history of the metro’s residential market.

Remarkably, before the housing bubble began to show itself in 2003, the metro averaged 4,344 homes for sale each month during the preceding seven years — almost identical to 2012 average of 4,334 homes for sale each month.

‘Through the backlog’

“We’ve worked through the backlog of listings,” Greenwood said. “We’re getting back to normal right now.”

The demand side of the housing equation has remained more stable, pre- and post-housing bubble. The 8,387 homes sold in 2012 is close to the 8,774 homes sold in 2001, which was the first year that sales surpassed the 8,000 threshold in the metro.

In addition, a post-bubble average of 657 homes were sold each month from 2008-12, close to the pre-bubble average of 683 homes sold each month from 1998-2002.

Realtors are saying the local home sales market has stabilized. These homes are located on Moon near Comanche NE. (ADOLPHE PIERRE-LOUIS/JOURNAL)

The ratio between home sales and home listings can be used to determine whether it’s a buyers’ market or a sellers’ market. Dividing average monthly sales into average monthly listings provides the number of months it would take to sell of the backlog of homes on the market.

As a general rule of thumb, six months is considered a balanced market between buyer and seller. Higher is a buyers’ market, while lower is a sellers’ market. Here’s a look at the last 15 years:

♦ During the pre-bubble years of 1998-2002, there was an average 7.1-month supply of homes on the market, tipping it in the direction of a buyers’ market.

♦ During the housing bubble of 2003-07, the average supply was 3.5 months, getting as low as 1.9 months in 2005 — the peak year of the bubble and a sellers’ dream market.

♦ During the post-bubble years of 2008-12, the average supply jumped up to 8.3 months, well into a buyers’ market.

Balanced market indicated

Most significantly, the ratio for 2012 was a 6.2-month supply of homes for sale, due largely to a sharp drop in listings during the first half of the year coupled with a steady increase in sales throughout the year. The supply of homes last year points to a balanced market.

As another general rule of thumb, home prices tend to increase in both a sellers’ market and, to a lesser extent, a balanced market. Prices decrease in a buyers’ market.

Here’s a look at the direction of average detached home prices over the last 15 years:

♦ During the pre-bubble years of 1998-2002, the home price increased at an average rate of 1.8 percent a year, which was on the low side of the metro’s historical range.

Before the bubble, Greenwood said, “You could almost predict the price of your home. You’d get 2-3 percent (appreciation) every year. It tracked with wages.”

♦ During the housing bubble of 2003-07, the home price increased at an average rate of 8.9 percent a year, a sustained rate of high appreciation in value that hadn’t been seen before in the metro and quite likely will never be seen again.

♦ During the post-bubble years of 2008-12, the home price dropped at an average rate of 3.3 percent a year, due entirely to price drops of 4.3 percent in 2008, 7.7 percent in 2009 and 6.9 percent in 2011. Price drops like those were unprecedented in the metro.

The tiny 0.6 percent gain in average price in 2010 is considered an anomaly, driven by the federal government’s intervention in the housing market with the First-Time Home Buyer Tax Credit. The credit, in various forms, was available for qualified home purchases until expiring April 30, 2010.

Artificial bump

“We artificially pushed people into the market at that time,” McCrary said.

With the supply-demand ratio moving toward equilibrium, 2012′s 1.7 percent increase is just short of the pre-bubble 1998-2002 average of 1.8 percent.

Based on previous cycles in the metro housing market, Parnegg said the average sales price will likely be in the 2-3 percent range in the next two to three years, with potential for a 9 percent increase in 2016.

Albuquerque’s apparent housing recovery still could be derailed by any number of economic and government variables.

The White House Office of Management and Budget warned federal agencies last week that sequestration could lead to furloughs, hiring freezes, early retirements and release of temporary employees if lawmakers fail to reach a comprehensive debt-reduction deal by March 1.

“If sequestration hits, we will really be hurt,” McCrary said. “It will be detrimental to housing.”

Threats remain

Just the threat of sequestration has kept some potential homebuyers on the fence, added Greenwood.

A debt-reduction deal could reduce or even eliminate the mortgage interest deduction, a uniquely American tax break to encourage homeownership. McCrary said any curtailment of the mortgage interest deduction would hurt home sales and home prices.

Albuquerque’s employed labor force has shrunk to the level of 2004, which many observers believe discourages household formation — young people moving out on their own, out-of-state workers moving here for jobs — and, in turn, homebuying. A vibrant housing market requires job growth.

Photography Makes a Difference in the Sale of Your Home

janet.bishop@coldwellbankerlegacy.com — Mon, 11 Feb 2013 00:00:00 GMT

Professional Presentation

Albuquerque Journal, February 10, 2013 by Glen Rosales

When Becky Farley put her Rio Rancho home up for sale last summer, she expected it would take a good half a year to sell because similar houses in the area took six to nine months to move.

Instead, the home sold in 20 days.

She attributes that quick turnaround to the use of professionally shot photographs that displayed the house to its best advantage.

“It made all the difference in the world,” she said. “With all the windows in our house, you could get a really good idea of what it looked like.”

Using professional photos is just another marketing strategy real estate agents are using now to move houses quicker, said Sean L. Hellman, an associate broker and team leader for the Re/Max Elite Asset Management Team.

“I started doing them in 2008 when the market shifted and houses started staying on the market longer,” he said. “It’s an effort to try to get to better exposure.”

Betty Blea of Marie Enterprises, who is both a builder and an agent, said she’s been using professional photos since she’s been in the business.

“You can’t give a good presentation without good photographs,” she said. “It shows your work better and it shows the quality of the work.”

It’s becoming something that’s almost absolutely necessary in marketing a home, he said because using a point-and-shoot camera just doesn’t cut it.

“Been there,” Hellman said. “We’ve made it strict policy for all of our listings for the past four or five years.”

Using a professional photographer is an integral to the process, said Sharon Knowles, an associate broker with Coldwell Banker.

“We have one on staff,” she said. “Photographs are very important. We use them in brochures and on the Internet. It’s all part of the presentation because that’s what’s important.”

Good photos “are pretty much the doorstep to the house,” Hellman said. “If you have maximum, professional photography, your house is going to be put at the top of the search list versus the bottom of the search list with a house that has less photos and it doesn’t have very good photos or dark photos.”

Hellman has two different photographers on call for photo shoots, paying anywhere from $75 to $300, depending on the size of the house.

“Especially on the bigger, higher end homes, it’s better to have professional photography because it helps give the buyer an idea of how the home is laid out,” he said. “It highlights some of the features better.”

Blea said she pays anywhere from $700 to $1,500, depending on the scope of the project.

It’s particularly important, she said, when showcasing kitchens and bathrooms.

For Knowles, the photos can act as a tease to get somebody to look at the house, or as a reminder of some of the highlights for somebody who has just been through it.

“They’re not meant to be a comprehensive overview of the house,” she said. “But it’s a nice sampling of the house.”

Hellman said he’s found it important for an agent to go along on the shoot to make sure of the unique features are captured. But for the most part, he lets the professionals do their thing.

“Those guys blow my mind away with what they decide to shoot and include,” he said. “The sky is the limit as far as photography goes and how you’re going to capture it.”

But it’s important that the photographers bring out the home’s attributes.

“If you have views, any of the upgrades, some of the better features of the property like if there’s a kiva fireplace or a tongue-and-groove ceiling, that’s what you want to show,” Hellman said. “You want to highlight or accent the key features or key

upgrades of a house, especially if it’s a house that has a lot of architectural style and design. You want to accent those pieces.”

Even proper lighting and showing off the home at night is an important aspect, said Barbara Griego, an associate broker with Re/Max Elite.

“I was just looking at homes in the North Valley and lot of the pictures were at dusk when there’s light coming and the yard is beautiful,” she said. “It just captures a different feeling.

With the housing market still sluggish, it’s important to take advantage of every marketing tool available, he said.

“I think you’ll find that there are more agents doing that now, today, than they were three-four, five years ago,” Hellman said.

What is the most important feature of a real estate website?

brandonwells1@gmail.com — Wed, 19 Dec 2012 00:00:00 GMT

Many real estate professionals will give you a variety of answers to this question, but the true answer sits with the real estate consumer. Every year the National Association of Realtors sends out a survey to home buyers and sellers asking a variety of questions. These surveys help shape the annual "Home Buyer and Seller Profile Report. This report has a wealth of information, and it serves as our guide to help improve the real estate process for our customers.

The 2012 Home Buyer and Seller Profile was recently published, and the number one most valuable feature a real estate website can have according to home buyers are photos! (84% said photos were very useful, compared to 79% saying property descriptions) This may come as a surprise to many, because the thought has been that video was where the industry has been headed for quite some time. (Virtual Video Tours 45%) We do not dispute that video has climbed the ranks of valuable features, but photos still trump all.

We pay very close attention to the data that is pooled in these reports, and that is why we offer Property Showcase. A high resolution full screen photo tour of select Coldwell Banker Legacy listings. Most websites provide grainy, low resolution, and small image thumbnails that can make it difficult to really get an idea of how a home feels or flows. With a better photo experience, a potential home buyer can get a better feeling for a home from the comfort of their Internet search. This helps them in the elimination process, and can certainly impact whether your home is seen by potential buyers.

If you want to see an example of one of how our Property Showcase works, and you can judge for yourself if you think the feature adds value to a real estate listing. Here is an example, simply click the Property Showcase button above the property thumbnail images to view the full screen tour.

Our local MLS now allows for 99 photos to be added to any listing. The ability to tell a story in photos is certainly helpful to those interested in writing their next chapter in life.

Thank you Don!

brandonwells1@gmail.com — Thu, 20 Sep 2012 00:00:00 GMT

Don Bowen has served as the Coldwell Banker Legacy courier for nearly 13 years. He has recently decided to retire, and we just wanted to thank him for his years of service. Don always had a smile on his face, and you have almost certainly seen him a time or two in his CBL van.

Don wanted to share this letter with everyone announcing his retirement.

"After 12 1/2 years, 350,000 plus miles, 500,000 plus Welcome Home Magazines, countless inter-company envelopes, i've decided to retire. It has been fun and I will miss all of you."

- Don "The Courier & Sometimes Sign Guy" Bowen