When it comes to buying a house, Albuquerque first-time homebuyers have a serious problem. Despite an easing in acceleration, home prices continue to rise at record levels.
This trend is likely to continue for several reasons. Motivated buyers are plentiful, housing supply is limited, and mortgage rates are low. Prices for almost everything, including homes, are rising due to inflation. In a low-interest rate environment, buyers can buy more than they would ordinarily be able to, and this can result in heated bidding wars.
Additionally, sellers are staying put since they don't want to jump into a highly competitive buying market, further limiting the supply of available homes.
It's hard for homebuilders to get the materials they need, and if they do, labor is in short supply.
What are the implications of this for first-time buyers or anyone buying a house in Albuquerque?
Priced Out: What Does It Mean?
When you're priced out of the housing market, you cannot afford even a starter home. First-time buyers are often priced out for a variety of reasons, many of which are currently converging.
Your hard-earned down payment isn't going as far as you planned if you are trying to buy a house right now. You may not be able to pay for a house even if you save 20% of what you were planning to pay.
What are your options?
Although it may seem logical to keep renting, rent prices are increasing due to inflation and wages aren't keeping up, so renting isn't always the best option.
Although none of your options might be perfect, when you're priced out, your choices are limited.
Depending on where you live, you might have to keep renting and add to your savings if the market isn't currently affordable. At the same time, this allows you to wait a little longer until the market improves. If you want to re-enter the market successfully, you may have to be patient since it could take a couple of years.
It's better to think about your monthly expenses instead of the sales price when you're considering what you can afford.
If you want to wait out the market and put more money aside, don't just put it in your regular savings account. Some of your savings may need to go into riskier but higher-earning options, such as stocks.
Changing your expectations is another option you have when you're priced out of the market. In the current market, limited inventory and other factors may make you give up some of your wish list items, or even more than a few.
Perhaps you'll end up buying a fixer-upper that fits your budget. The key to being a first-time buyer in today's market is to be humble.
Geographically broaden your home search
Likewise, you may have to give up some of your wish list as far as home features, and you may also need to broaden your geographic search. Prices for homes can differ considerably from one neighborhood to the next or from one suburb to the next. Have you considered buying a home in surrounding Albuquerque communities such as Rio Rancho, Placitas, Corrales, Bernalillo, or Sandia Heights, just to name a few?
Choosing the Right Real Estate Agent
Finally, as a first-time buyer, you will have a hard time navigating the current market without the help of a great real estate agent. Despite your ability to find an affordable home, you may face stiff competition.
Having a real estate professional who knows about properties before they hit the market will give you an advantage. As well as helping you understand your local market, they can help you adjust your expectations.
You can cut some of the stress out of the buying process by hiring a real estate pro to negotiate on your behalf. Contact Sandi Pressley and her team today to see how they can use their years of experience buying homes in Albuquerque to help you realize your home owning goals.