I have a high-end home in High Desert in Albuquerque (800K price range). My husband and I plan to retire to

Asked by Jonny Johnson, Albuquerque, NM Wed May 21, 2008

a house we already own in Wisconsin within the next 3 - 5 years. Although I keep hearing that prices are appreciating in Albuquerque we have witnessed the houses in High Desert selling for less and less over the last 18 months. When I ask realtors about what they think will happen in the Albuquerque market they seem to already have the same scripted answer that they don't have a crystal ball, and therefore could not tell me if my house is going to keep declining in value over the next year or two years We are nervous about a price decline, this is what we are counting on for retirement. So while we recognize that nobody has a crystal ball, everybody does have an opinion. That is what we want, your opinions as qualified, experienced realtors. We could sell our house now and rent a small apartment, or we could wait for another year or two. What is your OPINION about what will happen in the market in High Desert in the short term? Please provide contact info for follow ups.

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14
B, , l
Thu Oct 9, 2008
I am someone who could buy your house in High Desert . Now, I will tell why I won't spend that kind of money as the financial markets all around the globe are crashing.

I would rather buy a cheap house and save/invest would would have been the rest of my mortgage payment. A house less than $300,000 would be from 8 to 10% of our income. We have a flawless credit rating and no debt. But, we are on the fence about buying a house any time in the near future. Last May when we moved to Albuquerque, we tried to buy a house. Sadly, we ran into several sellers who would only entertain full price offers. We bought nothing and rented in High Desert instead. After going to open houses in High Desert for the past several months, these are my observations.

There is no traffic. Nobody seems to be looking. I have never seen realtors work harder. They now have open houses on Fridays, Saturdays and two on Sundays. Some of these houses have dropped $100,000 or more in the past 12 months. They have missed the market. Those that bought in 2006 are in deep trouble because they are upside down in their house. (They owe more than what it is worth.) Some realtors tell you that this is a short sale and the house must be sold.

A gorgeous million dollar plus house on Zina is an REO--bank owned. Nobody bid at the auction and this is the last step in the foreclosure process. The house is beyond description--perfect. It has views that will take your breath away. Compare your $800,000 house to this one. Someone could make a cash offer for $800,000 and probably walk away with that house.

Another house that started at $850,000 last October is down to $699,000 and still hasn't sold. When is that last time that a house sold in High Desert? Banks want compariables that are no older than 60 days. Nation wide, banks are building in a 10% drop in the value of the house in their loans. They are looking for a 10% or more downpayment to cover them in case the houses continue to lose value.

Your pool of buyers have shrunk dramatically. How many people are willing to part with $800,000 cash to buy your house? How many sellers can afford to go over the magic number of $416,000 and into dangerous jumbo territory? Will any bank loan a jumbo mortgage these days? Someone whould have to come in with a down payment of $384,000 to avoid a jumbo mortgage. With that, they could buy a less prestigious house for cash and have no house payment.

In this crazy market, who are your buyers? They are executives that have been transferred to Albuquerque. They will either buy a house or rent like us. First time home buyers can't afford your house. At this time, few buyers and banks are willing to venture into jumbo territory. For most buyers, it's a mess out there to try and get a mortgage. Like our new neighbors from CA, we are going to sit on our cash down payment and watch the housing market. When our lease expires this summer, we may or may not buy depending on the financial crisis.

If I were in your shoes, I would set back, pay off my cars, credit cards and pay down my Albuquerque mortgage as fast as possible. Why? Because when you go to sell the house, the market may be a lot worse. You do not want to negiotate a short sale with the bank. The government considers the loss on sale amount of money to be a gift-- if the bank forgives that part of the loan. Then, you will be taxed on it. Although a lot of banks these days are no longer forgiving the short sale amount. They want the sellers to pay them back. No one has a crystal ball to predict what will happen in High Desert next Spring or in the next couple of years. Your best course of action is to plan for the worst case scenario and prepare. If the market picks up, you will have paid more on the house and will take more cash back with you to Wisconsin. Being debt free and a cash couple is the best defense in these uncertain times.

BJL
1 vote
Eloise Gift, Agent, Albuquerque, NM
Wed May 21, 2008
I think the answer of not having a crystal is appropriate. It is similar to observations about buying stocks and bonds; somtthing to the effect that past return is no guarantee of future performance. Having said that, I think that with your timeline of 3 to 5 years for relocating, you should continue to live in your house and enjoy it, maintaining it wel so that you could take advantage of any positive changes in the market. Looking at the more recent high / low cycles of real estate, if we are already 18 months into a decline, as you say, in 5 years, we will have had nearly seven years of decline If we had not already done so, we should by then be ready to start growing again. All the predictions I have heard, suggest that the turnaround in the economy will come in 2009. But keep your eyes on job growth in ABQ. People with jobs are able to buy houses. The prognosis for job growth in Albuquerque is great, and real estate is local. So enjoy your home, take care of it, and when you are ready to sell, call me. I love marketing well-maintained homes. Eloise Gift, Keller Williams Realty, Albuquerque, NM 87120 Ph: 505-897-1100
Web Reference:  http://www.eloisegift.com
1 vote
Marie McMill…, Agent, Rio Rancho, NM
Wed May 21, 2008
Hello Jonny,

Just as other Realtors have said to you, I don't have a crystal ball either. But my gut feeling is that 3-5 years is a long enough time for the market to recover. I'm already seeing some good signs in the Albuquerque market.
1 vote
AQM Property…, Other Pro, Albuquerque, NM
Sun Dec 1, 2013
Hey Jonny,

Do not know if you already sold your home in high desert or not.? Since you have posted this ad, the market has only gotten better, however, I feel as the next few years go on it can only get better. High Desert is a desirable area - I do not know the stats on your house, or what you're looking to get for it? But if you cannot get what you want for your house now - have you ever thought about renting the house out? There is a booming rental market now in Albuquerque and Broadstone has even constructed a new construction high end apartments that are currently renting. Knowing that you are looking to move to the midwest a good option is to rent and hire a quality property management company in to manage the property, which is a nice hassle-free option, if you wish to move sooner than later - and if the market is not at the ideal place your hoping it to be right now for your home sale, having a good property manager while managing your tenant, can keep you up to date on the market conditions on when selling is ideal.
Web Reference:  http://www.aqmabq.com
0 votes
Brandy Thomp…, Agent, ABQ, NM
Sat Nov 23, 2013
As a listing broker, this issue comes up frequently. It has its own number on a list!!

Mistake #9 Don’t sit it out waiting for the market to improve. The market is not going to recover quickly and may even dip again slightly. Those who wait will have to make even more drastic cuts in the price to lure buyers in.

It is true, none of us have crystal balls to foresee the path in value your home will take. However, historically speaking, real estate values tend to almost always appreciate and ABQs market is recovering quicker than others and we were not hit as hard as cities of a similar size. If you are not motivated to sell and have the option of waiting it out, then wait it out. It is hard to sell a home if the sellers are not 100% committed to moving within a specified time frame. To be clear, there is nothing at all wrong with waiting to sell, but it seems like you are hesitant so maybe now is not the time you should be selling.

My opinion is High Desert will recover, there have been and continue to be homes sold there. Also, when looking at home sold prices in the area, keep in mind New Mexico is a non disclosure state and a site like Zillow cannot report accurate sales prices for homes sold here and often under estimates all prices, both estimates and sold listings. I would also request a current CMA of High Desert, maybe quarterly, so you can track what activity is going on there and get accurate pricing data of sold, expired, and active listings. If you like I can prepare one for you, simply contact me at BthompsonCBL@gmail.com. I will not spam you or pressure you in any way. I grew up here in ABQ, specifically in the Uptown area but am fully familiar with all of the Duke city. Have a great week.
0 votes
Claudia Brown, Agent, Albuquerque, NM
Mon Oct 7, 2013
Hi Jonny, Did you sell your house in 08?, I hope not, as our market has improved. I am a realtor who lives in High Desert, and yes we suffered like everyone else did in this market, the whole nation was touched by the down spiral of our economy, not just the real estate market. I hope that you have watched and enjoyed our market rebound. During the last 12 months we closed 15 homes in HD between $725 and 1.2M with an average price per sq. ft of $213 and an average of 180 days in the market. Currently we have 4 actives homes between $725 and 1.2M. Maybe is a good time to get a Market Analysis and see where your home is at, give me a call or email me.
0 votes
Way to go Claudia.
This is an incredible example of 'heads up' marketing.
Keep the market news comong.
Flag Mon Oct 7, 2013
Joshua Chris…, Agent, Albuquerque, NM
Thu Sep 23, 2010
Good afternoon Jonny, Great questions about the High desert area of ABQ. As you already know, no one has a crystal ball, but Real Estate is local, down to the neighborhood. The other agents on this forumn have provided some great advice about working with an agent who specializes in your neighborhood. I couldn't agree more with pricing the property well.

As a mortgage professional, I help home sellers and buyers buy and sell using a strategy that doesn't lower the price but rather benefits both the buyer and the seller. It's the ultimate win win scenario. The seller gets their asking price and the buyer gets the best deal. Sounds counter intuitive, but the math never lies.

In terms of your retirement, a great up and rising strategy lots of retirees are using is the Reverse Mortgage option. AARP has some great information on their website about the program. It is helping a lot of people retire in comfort without the concerns of a home mortgage payment and in many cases it actually pays them monthly. I'm happy to help if you have questions about it.

Joshua Christensen
Branch Manager | Southwest Funding - Integrity
505-250-1944
NMLS #315873
0 votes
CHINN TONG, , Albuquerque, NM
Tue Jul 20, 2010
Hi Jonny,

That is an excellent question & a very legitimate concern. You're not alone in your inquiry. I'm quite active in the High Desert market and have seen many beautiful highend ($800k+) properties sit on the market and become stagnate. Only a few of these properties have sold in the past 6months. My experience and feel of the market tell me that the worst is yet to come. We're seeing alot more foreclosures & short sales coming on the market in High Desert. If you must sell, price it to sell! You no longer can afford to price it high & wait for the buyers to come. If you don't need to sell in the next year or two, just sit tight. Maintain your property to the best of your financial abilities so that when the time comes for you to put your house on the market, it'll be nice and ready. Don't need to spend a fortune, just a few nice little things. (email me, I have lots of tips that won't break your piggy bank). Work with an experienced High Desert realtor to really scrutinize the comps and make sure you fully understand how the right pricing works. Price it right & sell it fast, price it wrong & sit on it.

Chinn 505-321-0410
0 votes
Maria Morton, Agent, Kansas City, MO
Sat Jun 5, 2010
Here's someone who can help you decide, if you have not already:

Laura Warden

Albuquerque, NM

More about me…

Choices Real Estate

Office Phone: (505) 263-0665 begin_of_the_skype_highlighting (505) 263-0665
0 votes
Mgfabq, , Albuquerque, NM
Fri Jun 4, 2010
I also own a home in High Desert. When first moved in 2004, newly built,etc. , strangers came to the door and offered 850 on the spot. Our appraisal was steady at 700k , the started decreasing. The home across the street from us is smaller, but beautiful. It experienced the same strangers and realtor agents wanting to buy at a price well above appraisal to decrease in appraisal and in the end sold at 150K lower than first on the market 11 months ago.

I think this property will come back up, maybe not for awhile, but I'm staying put for awhile
0 votes
Alyce Martin, Agent,
Mon Feb 9, 2009
Jonny,

If I'm hearing you correctly, you are trying to decide whether you should cash out your current home now instead of waiting 3-5 years (in anticipation of declining home prices). This is a legitimate concern. And while my gut tells me we will see more activity in the years ahead, no one can truly forecast with 100% accuracy. That said, you are at a higher price point and your pool of qualified buyers is shallow. Homes in this price range are currently selling very slowly. If you do not have a compelling reason to sell at this time, my advice is to stay put, ride out the market, continue the the tax benefits of home ownership and enjoy your beautiful home. I would maintain the home but avoid overimprovements. Hope this helps. Alyce Martin, Keller Williams Realty
Web Reference:  http://abqhomehunter.com
0 votes
None, , Albuquerque, NM
Tue Oct 14, 2008
Overall the Albuquerque Real Estate Market place has maintained its value. Albuquerque as a whole has a diversified economy, one out of every four employees in the state is employed by either the federal, state or local government. this allows for a very stable market, although we are not suffering from the mortgage crisis like other states (yet), High Desert is not immune from foreclosure or I would not have an REO bank Property listing there at the moment. The Crystal ball is a fantastic analogy, think back 3 years ago to November of 2005 your home in High Desert was apprieciating at a higher rate than the rest of Albuquerque and with the limited quantity of land like High Desert that isn't going to change. While like other Realtors said past performance is no guarantee of future results, overall the Albuquerque real estate market has increased in value by about 3% for the last 30 years and has a strong and vibrant economy that is still showing signs of prosperity. You should should sell the home if it is an amount you want to have for retirement now, if not only you can decide if selling the home is a good idea. I grew up in Wisconsin, do you really want to retire up north with those winters???
0 votes
Maria Morton, Agent, Kansas City, MO
Thu Oct 9, 2008
If I were you, I would ask a local realtor to do a CMA for me. That will show you how many homes have sold recently, for what price, in your neighborhood. Then you can compare what you owe on the home to what you might sell for. If you are satisfied with that amount, you could sell now. If you are not satisfied with that amount, youcan wait. No one knows what will happen in 3 or 5 years. A local realtor will be able to give you a better informed opinion for your particular area and situation.
0 votes
Keith Sorem, Agent, Glendale, CA
Tue Oct 7, 2008
Jonny
Thank you for a great question. Let me polish up my crystal ball here!

While I do know work in Albuquerque I would like to share some economic news that may have a bearing.
First, you might want to refer to Trulia's link below regarding general market trends.

Second, the heart and soul of residential real estate is the secondary financing market. There is an excellent program on Foxnews about the causes and mechanics of the secondary home market, I am sure they will be running it a number of times this week. The bottom line is that the underlying economic problems with Fannie Mae and Freddie Mac are going to have a far more serious impact than some of us first realized.

Tighter lending requirements coupled with higher interest rates (due to investors requiring a greater return on their capital when they buy mortgage backed securities) means that the pool of buyers will be smaller. Lower demand, coupled with homes forced on the market due to mortgage and other economic problems will increase inventory, which will probably result in lower prices. The Keller Williams Realty forecast is for this current market to remain as it is (and may get worse) for the next 2-3 years at a minimum. What would happen to you if the market never rebounded?

Lastly, although I do not possess the ability to forecast future events, I would suggest a couple of actions you might want to take now:
1. Interview a few Realtors and discuss your situation. You need to have face to face contact to be able to determine if you trust one of these Realtors to guard your retirement nestegg, Compare their answers.

2. Talk with your CPA regarding tax consequences. This is a serious move and you only are going to do this once. Selling now and renting is an option, however might another idea be to purchase a single level condo. Again, tax implications may have a role here. I don't know New Mexico law but there may be some tax-related reasons why this might make sense.

3. Develop a strategy with some contingency plans in place. If you have a financial planner I would recommend taking the conclusions from your interviews with Realtors and have them analyze how this affects your retirement funds and planning.

Jonny, a great question. I would be honored to provide you with a referral of a top REaltor in your area that you could interview. There would be no obligation, the plus side is that I would pre-screen this expert so at least you would be starting off on the right track. (No obligation of course). You can contact me through my Trulia profile.

Good luck
0 votes
Hi Jonny, Did you sell your house in 08?, I hope not, as our market has improved. I am a realtor who lives in High Desert, and yes we suffered like everyone else did in this market, the whole nation was touched by the down spiral of our economy, not just the real estate market. I hope that you have watched and enjoyed our market rebound. During the last 12 months we closed 15 homes in HD between $725 and 1.2M with an average price per sq. ft of $213 and an average of 180 days in the market. Currently we have 4 actives homes between $725 and 1.2M. Maybe is a good time to get a Market Analysis and see where your home is at, give me a call or email me.
Flag Mon Oct 7, 2013
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