Home Fixed interest Las Cruces house inventory increases by 240%

Las Cruces house inventory increases by 240%

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According to an Aug. 28 report from the Las Cruces Realtors Association, inventory of new and existing homes, townhouses and condominiums in the Las Cruces area increased 240% between mid-March and the end of august. Inventory, which stood at 133 units on March 19, increased to 320 units over the 5-month period. The increase in the number of homes for sale is just one data point illustrating the shift from a strong seller’s market to a more favorable buyer’s market.

Another indicator of change is the decline in our local rate of year-over-year home value appreciation, which fell from 28.6% in March to just 5.1% in July. However, one of the most significant changes affecting the bid/ask supply and demand pattern is the increase in mortgage interest rates that has occurred since the first of the year. According to an Aug. 25 report from mortgage giant Freddie Mac, the rate on the 30-year fixed-rate mortgage has risen 72.4% since Jan. 1. The effect of higher rates on buyers’ ability to qualify is significant.

Take, for example, a home buyer looking for a $350,000 mortgage. If this buyer had applied for a mortgage on January 1, his monthly principal and interest payment would have been $1,517 at the then rate of 3.22%. A buyer applying for that same $350,000 mortgage today would pay $1,998 a month at the 5.55% rate Freddie Mac quoted on Aug. 25.

The annual income required to support that $350,000 mortgage also increased significantly to $98,318 at 5.55% from the $77,713 required to qualify for 3.22%, a difference of $20,605. . The most telling statistic, however, is the amount of mortgage the initial monthly payment of $1,517 would support at the current rate. If our fictitious buyer’s maximum eligible payment were indeed $1,517, he would only be eligible for a mortgage of $266,000 at 5.55%, which represents an $84,000 drop in his mortgage power. ‘purchase.

Gary Sandler

So what effect might the loss of purchasing power have on house prices? An analysis of sales activity in the Las Cruces area in the $400,000 to $500,000 range over the past 60 days may provide a clue. A total of 78 homes were listed for sale in the price range on August 28. Thirty-eight were priced below $450,000 and 39 were priced above that number. The number of pending sales in the lower half of the range was 86.7% higher (28 vs. 15), while the number of closed sales below $450,000 was 76.2% higher (37 vs. 21) . Homes in the lower half of the range also sold 15.6% faster than their more expensive brethren.

Ultimately, landlords are starting to realize that they need to be more competitive to attract buyers to their properties. To that end, many are reducing prices, adding incentives such as closing cost credits, or sprucing up their homes. Some do all three.

Meet at closing time.

Gary Sandler is a full-time realtor and president of Gary Sandler Inc., real estate agents in Las Cruces. He loves answering questions and can be reached at 575-642-2292 or [email protected].

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