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Recently, the Greater Albuquerque Association of Realtors (pronounced “real-tors” not “real-a-tors”) released its June 2021 Market Statistics. The report, which should come as no surprise, highlighted continued and unprecedented growth in the Albuquerque real estate market. Driven by historically low interest rates and limited inventory, the report shows that the price for median detached homes in Albuquerque rose 25.8 percent when compared to June 2020, and reached an all-time high of $305,000.
Real estate in Downtown Albuquerque, which covers Old Town and West Downtown has seen similar trends. Just in the month of June, 27 residential properties have been sold, with an average sale price of over $291,500. Compare that to the same time frame last year, 28 properties sold for an average of over $238,800, a 19 percent difference.
Albuquerque is not unique in experiencing a housing market boom. The National Association of Realtors (NAAR) announced that nearly every metro area they track recorded year-over-year price increases in the first quarter of 2021, with 89 percent of metro areas seeing double-digit price gains. In Albuquerque, according to the NAAR report, those gains were 16 percent between Q1 2020 and Q1 2021. Additionally, while existing home sales nationally were down slightly in May (by 0.9 percent), the median existing-home price for all housing types saw a record year-over-year increase of 23.6 percent. “I have been blown away with how much cash has been injected into our market,” said Michael Schlichte, owner and qualifying broker of Absolute Real Estate & Property Management. “Regular retail buyers and large scale investment groups are placing large amounts of cash down, sometimes over 25 percent. They’re covering a seller’s customary costs and, oftentimes, paying above the appraised value. These elements were virtually nonexistent during the market boom of 2005 to 2007.”
As positive as this news may seem, however, there is always another side to the story. Low inventory, price increases and quick turnaround often lead to bidding wars between buyers. “If you’re coming in at list price … it’s considered a lowball offer right now,” said Belinda Franco, GAAR president in an interview with the Albuquerque Journal. Many prospective buyers are now finding that they are priced out of their ideal home and oftentimes have to settle. “I was not expecting homes to be sold so quickly and well above asking price,” said Tong Savath, a Washington state transplant, regarding purchasing his first home. “It can be devastating to learn that sellers have accepted another offer without having an opportunity to counteroffer.”
While the market has shown just the slightest uptick in residential inventory, real estate brokers feel that this is just seasonal exploration by homeowners simply “testing the waters.” The issue with putting your home on the market, however, is that you had better have someplace else to live. There is no significant slowdown in sight and most brokers expect to be very busy through the end of the year. “If you want your offer to be taken seriously, highest and best offers are currently what the market is dictating, and a licensed real estate broker can help you to identify that,” said Schlichte.
*Business writer Muhamed Abdel-Hack is a licensed real estate agent with Weichert Realtors-Image in Albuquerque.