Thursday, July 20, 2006

County housing prices up, market steady

Wednesday, July 19, 2006 Clara Garcia News-Bulletin Staff Writer; Looking for a home in Valencia County? You'll probably be paying more than $100,000. According to the Southwest Multiple Listing Service (MLS), there were 748 homes sold in Valencia County in 2005 at an average sale price of $154,880. In 2004, 655 homes sold at an average of $133,504. These figures do not include new houses being sold by builders or homes sold directly by homeowners. There are still bargains available, especially if you're willing to live a little farther from the freeways heading to Albuquerque. Valencia County's housing market remains steady as home sales and average sale prices increased during June compared to a year ago, according to figures released this week by the Valencia County Board of Realtors. Some 142 previously owned homes sold in the county during June compared to 108 for the same period last year, according to Phyllis Laureta, president of the Valencia County Board of Realtors. "The numbers are not changing all that much," Laureta said. "We've been pretty stable. When you look at the active listings, there's not a big change. In Valencia County, we're still in a seller's market. Overall, from last year to this year, our inventory has been pretty stable so we're still in a good and relatively stable market." According to Olinda Reneau, the chief appraiser for the Valencia County Assessor's Office, the number of new homes built in the county continues to grow at a rapid rate. In 2004, there were 241 homes built compared to 326 in 2005. There were 495 new homes were added to the property tax rolls for 2006, which run a year ahead. So far, 288 newly constructed homes have been reported for the 2007 assessments. The market is determined by supply and demand. The more properties for sale, the better for the buyer. "If we have less than six month's supply, then the sellers can be pretty firm on their prices," Laureta explained in an interview Monday. "They have to be reasonable, but they can be firm. So buyers aren't in a position where they can come in and offer $20,000 less than list price and expect to get it because there aren't a whole lot of homes out there for buyers to look at and choose." Currently, there are 295 site-built homes listed in Valencia County — a four month's supply, Laureta said. Therefore, buyers can't be really aggressive in their bargaining and sellers can expect to get a fair market value close to the appraised value on their homes. According to Laureta, Valencia County's housing market typically changes rather slowly. She said while the average sale price of homes has increased over the past several years, the county has been a market with gradually appreciating home values. "The average sale price doesn't measure appreciation. It only measures the ability of the consumer to buy," she explained. "Appreciation is measured by what homes in a neighborhood sold for several years ago compared to today. The average sale price indicates the ability of the consumer to purchase; and the very low interest rate made it possible for the consumers to purchase a higher price home because it kept the monthly payments low." The most important thing for buyers to know is how much their monthly mortgage payment is going to be, Laureta said. The market has been able to see a higher average sale price because of the lower interest rate. Laureta estimates that the appreciation rate of homes in the county increases between 3 to 5 percent every year. When interest rates averaged at 5.5 percent in 2004, the market experienced the largest increase in home sales in recent history. When interest rates go up, it puts a lid on the appreciation values because it slows down the buyer's capability to purchase. "Now, we're up around 7 percent," Laureta said. "Historically, that's still a very good interest rate." Laureta, who is a Realtor with Coldwell Banker in Los Lunas, said Valencia County's appreciation rate is slower than that of its neighbors to the north. Albuquerque has experienced a more rapid appreciation rate compared to Valencia County, but their market also has tended to cool more, she said. "They're seeing a fluctuation of homes staying on the market longer. I think stable markets are good because they're good for the economy, they're good for homeowners and home buyers. I think we're blessed when we have a more stable market." Currently, homes are selling, on average, within four months in the county. While there are properties that take longer to sell, it's not uncommon when homes sell the same day that they're put on the market. While the re-sale inventory has not fluctuated dramatically, site-built homes listed at less than $100,000 are getting harder to come by. In June, a total of 12 homes in that category were listed compared to 35 during the same month last year. "There's hardly anything left under $100,000," Laureta said. "We used to be able, in Valencia County, to find homes for less than $100,000 in the resale residential market. "In the resale market, I'd say that has been the biggest change," she said. "Right now, to buy a home ready to live in, you're going to have to look over 100,000. "If someone is looking for a house for less than $100,000, we may have to look at either a manufactured home or certain areas of the county such as Carson Park, Rio Communities or the Belen area. There are very few homes under $100,000 in Los Lunas. And a buyer will be hard pressed to get into new construction under $145,000." According to the June figures, there were 59 homes listed for resale in the $100,000 to $150,000 range, 68 in the $150,000 to $200,000 range and 54 homes in the $200,000 to 250,000 range. Thirty-eight homes were listed in the $250,000 to $300,000 range, 45 in the $300,000 to $350,000 range and 20 homes selling for more than $500,000 Reneau estimated that the average cost of the new homes being built in Valencia County range in price between $180,000 to $190,000. She also reported that 90 percent of the new homes, most of which are located in Huning Ranch, have been sold. "The county is growing rapidly," Reneau said when asked if the volume of new homes is increasing. "Most of it has to do with the subdivisions by the freeway in Los Lunas. A lot of people are buying for access to the freeway — it's an ideal area." Reneau said the overall cost of homes is on the rise because of the supply and demand of the local housing market. She said more and more people are moving into Valencia County. "We're seeing a lot of out-of-state money," she said. "There was one particular investor from California who bought a lot of the homes (in Los Lunas) to rent." Similar to the Albuquerque market, the price of property bought and sold in Valencia County varies from area to area. A home with an identical floor plan in a home in Las Maravillas is going to be thousands of dollars less than the same model located in the Village of Los Lunas. Easy access to the freeway is one factor, Laureta explained. People are willing to spend more for that convenience. Location definitely dictates value of the home. "If you look at homes in Meadow Lake and El Cerro Mission, those are our depressed markets and you can really buy a lot of house for your money there," she said. "But I always tell potential buyers who call on an (advertisement), if the price looks too good to be true, there's a reason. There is a reason it's priced the way it is and location has a big impact on how much a home will sell for." There are other things that impact the price of a home such as the amenities, the quality of the construction, the condition of the home. When Realtors do a market analysis, they choose homes of a similar age and condition sold in the past six months in a two-mile radius. This is how they can tell homeowners what potential buyers would pay this for their homes. So what time if the year is best to buy and sell a home? According to Laureta, in Valencia County, as well as in other areas across the country, the busiest time is during the summer months. "A lot of people, especially if they have to change school districts, like to do it before school starts," she said. "We tend to have stronger activity in late spring and early summer months. We do sell homes year round — in fact, we have had people move into their homes a week before Christmas." The need to sell or buy a home is usually dictated by the individual need of the consumer. Realtors sell and list homes all year, but the summer months are typically stronger. While the MLS listing doesn't provide numbers of newly built site homes, Laureta said there have been a large number of homes built and sold in Huning Ranch in a short period of time. The new construction has actually been positive for the resale market in Valencia County because often, people who are living in older homes are deciding to buy the new homes, she said. "That supports the resale market as well," she said. "It's actually been positive for us." Laureta projects that the population in Valencia County will continue to grow as people living in Albuquerque and other parts of the metro region seek a more rural atmosphere. "People in Albuquerque have already moved to the west and to the east, so I think we're going to see the population move out this way," she said. "I believe the commuter train will have a positive impact as far as having new people come in. It will make it possible for people to live in Valencia County and work in Albuquerque and as far away as Santa Fe. "Both Belen and Los Lunas are doing a wonderful job in trying to attract industry to provide employment. It seems to me that these two municipalities are working hard to keep people working and living in Valencia County," she said. "We have a lot of people living here and working in Albuquerque. Our prices here are still more affordable. A lot of people move here because they want a more rural lifestyle."
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