I've had a good year selling Albuquerque Real Estate, much better than last year, but I've seen many others struggling to survive.
I've been hearing a lot lately about how the $8,000 tax credit for first time home buyers is having an effect, so I though I'd pull some numbers to see how much of an effect it has had.
Here is a comparison of Closed Sales in Albuquerque for 2008 and 2009:
Be careful, if you didn't read the legend you might have misunderstood. The red line is not 2009, it's 2008! Closed sales for most of this year have been down from last year.
However, if my personal sales history this year are any indication, the tax credit has had a big effect on the number of first time homebuyers who have bought this year.
What this means is disturbing. Without the tax credit and without the influx of first time homebuyes where would we be? The number of closed sales would be even lower. Yet people are talking about a housing recovery.
The last two months show an increase in closed sales, so this begs the question has it effected average sales price?
Here is a history of average sales price for this year:
The increased closings haven't led to an increase in average sales price. Average sales price data doesn't necessarily mean the value of your house has declined as significantly, since a higher than usual proportion of sales have been to first time homebuyers who are buying smaller houses, and this effects the numbers. In fact, real estate is local, to get an idea of your home's value you need to look at recent-very recent-sales in your neighborhood.
What this data says to me is that this is the next housing bubble. Sales are artificially propped up, and when the stimulus disappears this bubble will burst.
How long can our country afford to subsidise housing by offering the tax credit today? We're just doing more of the same- borrowing from our children's future. But if you have a smaller house and you want to sell over the next two or three years, I think you should do it now!
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Albuquerque Realtor Rich Cederberg works for RE/MAX Finest in Albuquerque New Mexico. Previously Rich worked for RE/MAX Elite and the Vaughn Company Realtors for 5 years. He specializes in Albuquerque Real Estate, Northwest Albuquerque Real Estate, Rio Rancho Real Estate and Los Lunas Real Estate. He especially enjoys working with First Time Home Buyers. Call 505.803.5012 or email Rich Cederberg if you need a Albuquerque REMAX agent.
Hi Rich,
Regarding the tax stimulus for first time home buyers, it closed four deals for me, that might not have happened. I have not tracked any other sales, many of the local agents have told me they were involved in one or two transactions that qualified for the stimulus. We are in a Military Town and Fort Benning is a great part of our community. I have heard from agents elsewhere that it had not worked in their regions.
Rich, I hear your forcast, but I'm wondering about employment. If we see some improvement there and interest rates don't take off we could see recovery without the economic CPR programs. Just thinking out loud. I know, I know that can be dangerous,LOL
Erika, Half of my business this year has been first time home buyers, so it's had an impact for me. W/o those buyers my business would have really been hurting. My point is the total sales for the year are not going to reflect a big boost in sales, but rather a decline in sales. So I guess you could say the tax credit was not really a stimulus-my market hasn't been stimuated, but a subsidy instead.
Steve, Yes, that would be great. Unemployment here in NM was 8% or so last time I heard, so we're pretty lucky here. It's hard to say how much effect the credit has had. Like all things real estate it's hard to measure results accurately. Don't think too hard. When I do smoke comes out my ears....
Hi Rich, Interesting graphs and thoughts on the first time home buyer stimulous. We have not been helped by that too much in our market, still overall I think it has been a benefit for many home buyers.
Very good analysis Rich. The great news is that people are taking advantage of the $8000 tax credit right now. The true story about the heist has not been told. It will take awhile for the recovery to materialize. The regulators should mandate the banks to diaclose all the bad and questionnable loans on their books. Then we will get a better picture of how bad it really is