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Metro homebuyers picking up the pace

ALBUQUERQUE, N.M. — Homebuyers were active, but price sensitive, in the Albuquerque metro area in 2015, driving

single-family home sales to the MAP MASTERhighest level since the housing bubble, but keeping prices close to where they were during the bust that followed.

The 10,730 single-family homes sold in 2015 represent a nearly 16 percent jump from the 9,255 homes sold in 2014 and the most for any year since 13,092 in 2006, according to the Greater Albuquerque Association of Realtors’ annual report on market statistics.

Improved consumer confidence at the local level and purchases by so-called mom-and-pop investors are likely contributing to the strengthening sales pace, said Paul Wilson, GAAR president last year.

“I think there’s more hope and optimism that things will be getting better,” he said.

On the supply side, the average number of single-family homes listed for sale in the metro was 4,154 a month in 2015, the lowest level in 10 years and about on par with average monthly listings before the 2004-07 bubble, based on an analysis of GAAR data.

By most measures, single-family housing looked more healthy and balanced in 2015 than it had since before the bubble. The one exception is an apparent stagnation in home prices.

These neighboring homes in Albuquerque's Northeast Heights were on the market in February 2015. Buyer demand has recently been for houses at lower price points. (Marla Brose/Albuquerque Journal)

These neighboring homes in Albuquerque’s Northeast Heights were on the market in February 2015. Buyer demand has recently been for houses at lower price points. (Marla Brose/Albuquerque Journal)

The average price of single-family homes, both detached and attached, edged up by 1.3 percent – or less than $3,000 – from $204,760 in 2014 to $207,499 in 2015. Average annual price falls in 2015 were more than $26,000 short of 2007’s average of $233,661, which was the metro’s historic high.

The typically slower-moving median price increased by a solid 2.9 percent from $170,000 in 2014 to $175,000 in 2015. The median price, which means half of the homes sold for more and half for less, is more than $16,000 below its 2007 average of $191,350, also an historic high. It’s roughly where it was in 2004.

Corelogic’s monthly Home Price Index tends to show more robust home-price increases in the Albuquerque metro than GAAR, noted Janice McCrary, the association’s executive vice president. Tracking a huge database of homes, Corelogic’s index is based on repeat sales of the same properties.

The year opened auspiciously for home-price appreciation when Corelogic reported a year-over-year increase of 6.1 percent in January, the biggest jump since 2007. The increase also marked the first time in five years that the metro registered a year-over-year home-price increase better than the national average.

The most recent HPI showed a far more modest 0.6 percent increase in average home prices during December, the Irvine, Calif.-based real estate data and services provider reported last week. For comparison, the average increase nationwide was 6.3 percent in December.

The comparatively stagnant local prices reflect buyer demand for houses at lower price points, which serves to suppress average and median prices. For example, three out of every four homes sold in 2015 were sold for less than $250,000, McCrary said.

“Lower-priced homes are going to sell, but it’s a relative thing,” Wilson said. “In some areas of town, there’s less than two months of inventory of homes priced under $250,000.”

A home purchase is described as the single biggest financial investment for most families. McCrary said the home-price stagnation likely reflects more price sensitivity among buyers, stemming in part from the national phenomenon of marginal growth in middle-class incomes and conservative mortgage-lending.

Only two Multiple Listing Service areas have seen home prices return to the peak levels of 2006-07, Downtown and the Southeast Heights, which is the area south of Central Avenue from San Mateo east to Tramway. The metro has 42 MLS areas, which are basically submarkets.

Home prices are typically a function of neighborhoods, which are small scale compared to MLS areas. The fact that some neighborhoods see more sales activity and price appreciation than others is often a sign of a demographic shift, such as older homeowners moving out and younger buyers moving in.

Given the accelerating pace of sales and the decrease in for-sale listings, increases in average home prices are almost bound to return to the Albuquerque metro’s historical range of 2 percent to 4 percent a year, McCrary said. Changes in home prices tend to be a lagging indicator of the overall market, she said.