homes

Sunday, June 14, 2009

Looking for value

By Michael Hartranft
Journal Staff Writer
          Still thinking about that dream home?
        To be sure, there are plenty on the market to dream about, especially if your ideal domicile is of the upper-end, luxury variety.
        "When people hear dream home, they think luxury houses which tend to have higher prices," said David Murphy, who analyzes home trends for SalesTraq of New Mexico, a database of new housing. "And right now, the market is very much overloaded with dream homes."
        Murphy said glancing at recent resale data for the Albuquerque area, there were 160 homes valued at $1 million or more.
        "But in the first quarter of 2009, there was one sale in that price range," he said.
        One reason for that, of course, is that buyers don't have the access to credit they once had, he said. But Murphy also is among those who thinks the concept of a dream home is changing, becoming perhaps "more or less a home you can be happy with and live within the means you have."
        "People are just looking to basic housing anymore," said Jim Folkman of the Home Builders Association of Central New Mexico, noting that he has seen more demand at the lower end of the market. Whereas the median price for a home was $212,000 three years ago, it has slipped to about $175,000 "and will probably inch down in a year or two," he said.
        "High-volume production builders are offering homes under $150,000 and I think that trend will continue," Folkman said. "In the case of more expensive homes — in terms of over 3,000, 2,500 square feet, semi-custom, I think you're going to see fewer features, (like) granite countertops, few extras and less total cost. That trend will continue some time into the future."
        Folkman said carpet is being used more often now for flooring instead of tile and wood, and appliances are "pretty basic." Folks are apt to be more interested these days in what's "behind the walls," he said.
        "There is a very strong focus on green features and energy conservation," he said. "And there is an increasing amount of code and legislation that is driving the industry in that direction."
        Over the past seven or eight years, he said, there has been a trend in the industry to accommodate a still-emerging market: aging baby boomers with lots of equity looking to move into smaller homes with nice features and less maintenance, and somewhat insulated from the downturn in the economy.
        "It will continue after the economy starts ratcheting back and continue into the future," Folkman said.
        To be sure, Albuquerque builder Scott Bealhen, owner of Bealhen Construction Inc., began building subdivisions targeting buyers fitting that description eight years ago, building four in the Northeast Heights and the 37-lot Candelaria Village being developed near 12th and Candelaria NW.
        The market at the time, he said, didn't offer much by way of a move-down product for people with two-story homes and children who had moved out of the nest.
        "They want to a place to go outside and read the paper, but don't really want to maintain a large yard, a large house with utility bills and taxes that are going to eat not only into their retirement funds, but their time because of the maintenance necessary on a traditional home," he said.
        Bealhen builds what are called courtyard homes, featuring side entries that allow better use of space in the home and patios with privacy, he said. Homes in Candelaria Village are three-bedroom, single-story and range in size from 1,600 square feet to 2,000 square feet and in price from $380,000 to $417,000. So far, it has 17 residents, he said.
        "Our sales did slow down, but they did not stop. Typically the buyers we have pay cash for their home or take a very small mortgage," Bealhen said.
        Nowadays, he avoids labeling his potential buyers as boomers, or anything else, for that matter. In fact, another group of folks buying homes in the subdivision are single professionals, he said.
        "People don't like (labels), " he said. "They don't want to be baby boomers, they just a want to be normal, like you and me."
        And it is normal to desire that dream house.
        For now, though, "The best dream house for many is the one that is paid for," Murphy said.
        This is part of a series the Journal is producing in partnership with the N.M. Mortgage Finance Authority, Home Builders Association of New Mexico and the Realtors Association of New Mexico.
        Tax credit deadline looms
        The deadline to take advantage of the $8,000 tax credit for first-time homebuyers expires Dec. 1. For buyers building a new home and planning to use the tax credit, that deadline is now.
        "It generally takes 120 days to break ground and complete a house. If you add on an extra 30 days to get the plans approved by the city ... June is your deadline," said Don Padilla, chairman of the Board of Greater Albuquerque Association of Realtors. "If you're considering a new home but plan to hold out until August or September, you'll miss out on the tax credit."
        New-home builders are well aware of the impending deadline.
        "New-home construction continues to expand, especially eco-friendly construction, and now would be the time to consider the incentives being offered by new-home construction companies," Padilla said.
       

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