But finding a house to buy still can be a bit tricky given the inventory of homes listed for sale is at the lowest point in more than a decade.
There are simply fewer homes on the market from which to choose.
In the Albuquerque metro area, there were 3,676 single family detached homes on the market in February, just more than the 3,668 a year earlier and well below the 4,823 in February 2011, according to data released last week by the Greater Albuquerque Association of Realtors.
In fact, the total available for sale this past January was the lowest inventory in the previous 26 months except for two months, association data showed.
The same is true for condos and townhomes for sale in the Albuquerque metro area. GAAR data showed that there were 386 for sale in January compared to 421 the same month in 2012 and below the 511 for sale in February 2011. The 386 for sale is the lowest in the past 26 months in the metro except for December 2012.
“Tight inventory is a major factor in the market today,” Realtors Association of New Mexico President Cathy Colvin told the Journal.
“The National Association of Realtors reported 28 percent of transactions in January were all-cash sales. Investors are making up a bigger share of buyers. The lending market continues to be tight. That means a typical buyer looking for a home must be prepared and know what it takes to succeed,” she said.
Be sure to consult a pro including your local Realtor for shopping and mortgage tips, but getting a loan lined up is among the best advice, she said.
“Buyer pre-qualification is the first step in the process. Buyers should obtain a pre-qualification prior to shopping for homes. Being able to make a quick decision if buyers want a certain school district or subdivision is essential with inventory tightening.
“Having the pre-qualification document in hand can also be the difference in an offer being accepted or rejected by a seller,” Colvin said.
Housing economist Mark Fleming thinks one reason why more properties aren’t coming on the market is because many homeowners just owe too much to comfortably sell.
Fleming, chief economist for housing and mortgage analyst CoreLogic Inc., said, “These people aren’t supplying their homes to the market because they are underwater or under-equitied.”
Even though home prices are increasing in most markets, it will take a while before homeowners can net enough from the sale of their current home to have a down payment for another purchase. CoreLogic estimates that 22 percent of mortgage holders nationwide owe more than the value of their properties.
Rising home values will eventually cure the situation.
“There is a natural correction going on in the market now,” Fleming said. “Inventory will hopefully come on line because house prices are rising.”
In the Albuquerque metro area, average and median sales prices in February increased over the previous month and previous year, the Greater Albuquerque Association of Realtors reported last week.
The median sales price of single-family detached homes was $168,500 in February, an increase of 4 percent from the same month the previous year and almost a 7 percent increase from the previous month.
February’s average sale price was $203,514 a 9 percent increase from January 2013, the group reported.
“These numbers reflect a simple economic premise; when inventories get low, price starts to react,” GAAR President Julie Greenwood said in a statement.
CoreLogic reported that U.S. home prices jumped in January – its latest available data – as the spring selling season approaches. Home prices rose 9.7 percent in January from a year ago, and up from an 8.3 percent increase in December.
In New Mexico, home prices increased 4.6 percent, less than half the average year-over-year increase nationwide, but still fairly strong, according to CoreLogic. New Mexico had the 30th-highest rate of price increase in the country in January.
Even if distressed property sales are removed from the equation, home prices still rose 4.6 percent in January in New Mexico. In fact, distressed property sales – mostly short sales and bank-owned sales – helped drive up average home prices in 21 states.
Rising demand combined with fewer available homes is pushing up prices.
The statewide Realtors Association of New Mexico reported 970 home sales in January 2013, a 19 percent increase from January 2012 and a 23 percent bump from January 2011.
Colvin called it a “great way” to start the year. “Inventories are still low in many markets, but the pent-up demand for homes is creating activity in markets around the state,” she said in a statement.
In the Albuquerque metro area, home sales rose 17 percent when compared to January 2012.