Forecast for 2014

I know everyone is wondering about how the real estate market is going to perform in 2014. Can you give us your predicted forecast?

My real estate crystal ball remains cautiously optimistic for 2014! I predict that we will see the Greater Albuquerque areas continue to slowly stabilize. We will continue to be in a price war and a beauty contest with realistically priced homes selling well. I expect inventory will increase dramatically in the first and second quarters, which may create downward pressure on pricing as supply and demand drives home values either up or down. Overall, 2014 should see a higher number of sales than the previous year. I predicted 2013 to increase over 2012, and the final yearend figures should show an increase of over 1,000 sales. I’m optimistic that we may even experience home value appreciation.

Stabilizing sounds good. What about all of these foreclosures we’re hearing about?

As part of the market stabilization, we expect to see a continued decrease in bank controlled sales in 2014. A bank controlled sale is a home that either is bank owned through a foreclosure action or bank controlled through their willingness to accept a short sale whereby they’re accepting less than the homeowner owes on the property. In 2012, 30-35% of sales were bank controlled. As I predicted last January, the 2013 bank controlled sales dropped to approximately 25% of all sales.

Your crystal ball tends to be really clear! Cheryl, tell us a bit about mortgages and interest rates in 2014.

When historically low interest rates are enjoyed for an extended period of time, the only way to go is up. Interest rates will continue to slowly increase. This is a great motivator to buy now, instead of paying more later! Momentum continues to build in the housing market and there are still many opportunities to take advantage of the past few years of lower home prices and unbelievably affordable interest rates. These favourable conditions will not last.

Overall, you’re prediction is positive?    

                     

Again, I’m cautiously optimistic about the Albuquerque real estate market for 2014. For many reasons, New Mexico is a great place to live and own real estate. Whether you are a seller, a first-time buyer, or a move-up buyer, there are great opportunities in this market to take advantage of. Call me today and let’s get started. 

Potent Pricing

It seems like, for the most part, our market seems to be improving, so how important is pricing? 

You know, pricing is one of the hardest issues to deal with as a Realtor, because, quite frankly, every seller feels like their home is better than the competition, and that it’s worth more. Many potential sellers want to believe that their home is an exception to the real estate market downturn we have experienced since 2008. And I hate to be the bearer of bad news, but the reality is that we are still very much in a “price war” and “beauty contest!” Your home has to be priced extremely well in today’s market conditions in order to be the one to have that SOLD sign put in front of your house.

How many homes are currently available?

There are currently almost 5,000 homes available in the greater Albuquerque area. The absorption rate can vary month to month from 10-20%. In other words, 10-20 homes sell per month of the 100 homes available. This means that 80-90 people out of every 100 who would like to sell their home this month are not going to. Supply and demand drive value and I am encouraged by the improvements in our market. Understanding these numbers clearly these indicates that pricing is still critical! I am here to help sellers protect their equity; I’m not trying to beat them up about their price. At the same time, it is my duty to tell my clients the truth, because in pricing the home accurately, it will sell at a higher price in a reasonable amount of time.

It seems like buyers are still being picky about homes to purchase?

Yes! To see that sold sign in today’s market, you really need to be number one, two, or three in the market in terms of your pricing, as well as how well your home shows. You absolutely have to be the best all-around deal! Buyers are far less emotional in today’s market. For years, a buyer would fall in love with a house that they had to have, and then pay a reasonable price for it. Today’s buyers make a value-based business decision when purchasing a home. An agent like myself, with 27 years of experience and over 3,700 home sales has a different level of insight in understanding both buyers and sellers in today’s market. This is critical in negotiating a win-win home purchase.

Why A Buyer Chooses A Home

I would like to visit with the listeners about why a buyer makes the decision to purchase their next home, the things they desire and missteps by sellers. I think this can be helpful information for both buyers and sellers. If you’re like most people, you probably think that practical issues such as the number of bedrooms or kitchen amenities control the home buying process, correct?

That would make sense, yes!

Nevertheless, this is not the case.  Financial and emotional considerations have taken the lead when buyers view homes. Over 60% of homebuyers say the “feel” of a home is important and 78% place more emphasis on quality rather than square footage. We are seeing that buyers will no longer tolerate purchases of “as-is” properties. In our marketplace, we have recently seen multiple offers  for nice properties simply because buyers don’t want to deal with a lot of “projects.” Remember, we are still in a price war and a beauty contest! Buyers want the best deal on the best house! This doesn’t mean that sellers need to spend a lot to sell their home; there are some tricks to get that necessary first impression on good standing.

What are a few things sellers can do to help showcase their home and make a good first impression?

Every home is unique and with 26 years of experience, I can easily point out the key elements to draw buyers’ attention to the best features of your home. Overall, however, sellers should keep up on curb appeal, even in the winter time. Your yards and driveway free are the first impression they will see upon arrival. De-cluttering your home so that buyers can picture their own belongings in the floorplan as well as keeping dirty laundry and dishes away is definite bonus! If you have time, boiling some cinnamon before a showing is a welcoming scent, and fresh cookies are always appreciated! And last but not least, sellers staying for the showing is a no-no; buyers want to tour the homes with freedom of discussing their options. 

Market Familiarization

What are ways our listeners can familiarize themselves with our current real estate market?

Depending upon your motivation to move, that will change the various ways that you could select how to keep an eye on the market. For example, if you’re looking to move within the next year or two, I offer free monthly market reports delivered straight to your inbox. These will touch base on statistics such as price points and areas selling the best, indicating the strength of the market. You can then make decisions with knowledge of how the market has been and is predicted to be.

What if someone wants to buy within the next couple of months?

Now is the perfect time to buy! Last week I spoke about interest rates, and their potential and likelihood to reach 6% interest. This goes back to your motivation to move or buy a home. For those buyers that have a higher motivation level, we also offer a free, personalized, up-to-the-minute search that you can interact with. This is called a portal, and you can view a slideshow of property pictures, rate how you like properties, and save homes that you’d like to visit within the system. This system will notify you of price improvements/reductions on homes you’re keeping an eye on, and when new listings come on the market. This information is valuable because, as I’ve previously reported on, sites such as Zillow and Trulia are often inaccurate.

After someone has found a home, how is the offer price determined?

A Realtor with experience is extremely valuable in such an important transaction in your life. Part of the reason why that is the case, is that with my 4,000 homes sold, I am an expert on determining the value of a property. Knowledge of the areas in town, which affect value from one street to the next, comparing condition and upgrades, projecting resale potential, and many other factors are taken into consideration when analyzing the value of a home.

Election Affection

What are you seeing in our current market, and how the housing market will be affected by our upcoming primary election?

As we’ve seen in the past, interest rates will likely rise after the election this year, no matter which party is instated. Right now, the housing market is a buyer’s paradise. In virtually every major city in the United States, it’s now less expensive to buy a home than rent one. I quote, “Washington and the housing market are never far apart. Experts ranging from real estate professionals to the members of the Federal Reserve have reported that the state of the nation’s economic recovery relies heavily on a housing recovery.”

As you’ve been reporting, Albuquerque seems to be experiencing positive momentum.

We are experiencing positive momentum and I predict that we will continue that positive trend, with activity slowing after the election. In election years, we don’t typically see as intense of a seasonal slowdown until the dust settles. November, December, and January will be slower, however it is still a great time to sell as there is less competition during these months.

How big of an impact do interest rates play?

A raise in interest rates affects affordability; so if you wait, you may spend the same money for less house. Here are some surprising numbers: at today’s rates of 3.5% on a $250,000 mortgage, your principal and interest would only be $1,122. If rates increase by only ½ of a percent, that payment is $1,193, and a 1% increase to 4.5%, which is still low, would be $1,266. That is $144 more than today’s cost based on only a 1% increase, not to mention the long-term cost of a higher interest rate, and the equity building advantage of a lower rate.

3.5% interest is definitely a reason to buy now!

Bingo! Now is the perfect time to look at obtaining your dream home!

82 Villacitos Rd Tijera

Do-It-Yourself Homebuying

11700 Beringer in Sauvignon

Can you tell us why it's not a good idea to buy a home without using a Realtor?

Absolutely! Buying without using a Realtor can definitely be a risky choice. A buyer might think that they're making a smart financial decision in trying to cut expenses by not enlisting the aid of an expert in the real estate industry, but in reality, they could be making exactly the opposite.

Why should buyers elicit the help of a Realtor?

It's simple. Realtors, like myself, are experts in their profession! Buyers who try to represent themselves in a real estate transaction may have knowledge based on previous experience with buying or selling, or reading some real estate know-how books; Realtors, however, live and breathe real estate. And while books are great (I, myself, read up constantly), they don't represent all of the complex rigors and rules of our current housing market. It's our job to know all of the ins and outs of every real estate transaction, as well as to make all aspects of the sale as smooth and swift as possible.

Can you give us some examples of times when a Realtor is a necessity in a real estate transaction?

Though I believe a Realtor is necessary through every step, let me provide those examples. First of all, the biggest thing we are needed for is to help clients weave their way through the many dilemmas that plague current market-loan qualifications, appraisals, and renegotiations. Second, buyers and sellers hire agents that know the process and understand market value so that they don't pay too much or sell too low. When it's your life or your money, you need to hire the absolute best professional with the most experience available. The skills required to succeed at a high level are no different from the skills that you would expect a great doctor to have when caring for you. you would never knowingly go to a doctor for surgery who you knew only did three operation a year. As a buyer or seller, would you consider selecting a real estate agent that is not as skillful as the best doctor?

Tips for Homebuyers

Whether you are a single home buyer or a family, there are probably few things in life that are as exciting - or nerve-racking - as looking for a home. If one has organized a home buying plan, one can minimize a great deal of the emotional impact. By determining your buying bower, your wants and needs, and have an organized search plan, your chances of a stress-free experience are much better.

What is one of the most important factors in utilizing organization?

A mortgage pre-qualification is the second step after calling me. This will not only give you an exact price range, a pre-approval will add a great deal of strength to an offer you present. We have several quality lenders we work with to obtain the best loan programs personalized for our buyers' needs.

How about finding the "perfect" home?

I hear about this, and having sold over 3,000 homes, I can tell you there is not a perfect home. There are many people that make the mistake of thinking that they will, if they look around long enough, find a home that has 100% of their needs and wants. Determine the most important of your needs, and the most desired of your wants, and select a home that meets the majority of them. Ideally, if you can find 80-85% of your requirements, you should jump on it before someone else does.

Any other tips for home buyers?

An important thing for single individuals: don't over-buy the first time. A large and beautiful home with little or no furniture tends to be empty and cold. A life where almost every dime of your earnings goes to the support of your home wears thin very quickly and is a frequent cause of stress. Also, certain types of homes may possibly appeal a bit more to some single home buyers, such as townhomes and condominiums that help with maintenance, are a good place to start. 96% of people start their search online, and many internet sites offer inaccurate housing information. Our team offers a competitive edge to this with completely accurate information, and a personalized, professional search sent straight to your inbox!