Inventory Rising in New Mexico Housing Market

Fewer homes sold in July than a year ago in Las Cruces.

With all the talk about the mortgage crisis in the United States, many have wondered what the effect would be on the southern New Mexico housing market. So far, the evidence appears to be mixed.

Homes, new and previously owned, are still selling at a decent clip in Las Cruces, but certainly not as fast or in the same numbers as years past.

“My take is that good houses are still selling fairly quickly,” said C.J. Pierce of Steinborn Realty.

Still, he said, there is a lot less room for error in today’s market. Houses will sit “if you have the wrong price, in the wrong place in a competitive market.”

Stacey Melzer has had her house on the market in Las Cruces for more than six months, looking for a New Mexico mortgage borrower.

“I did not think it would take this long (to sell),” she said. An interested buyer, who was close to purchasing the house before the deal fell through because a contingent sale did not pan out, is once again on the scene.

“I’m keeping my fingers crossed,” Melzer said.

Pierce and fellow real estate agent Annette West of New Mexico Apartment Advisors looked at the Multiple Listings Service for the Sun-News to garner an idea about the home market in Las Cruces.

West reported that 173 homes sold in July, an improvement over the 162 sold in June. That squares with the national picture. The Commerce Department reported Friday that new-home sales rose 2.8 percent in July, after falling 4 percent in June. The increase in July lifted sales to a seasonally adjusted annual rate of 870,000 units.

Still, that’s off significantly from last year’s pace. West reported that 246 homes sold in July of 2006.

“There are a lot of homes on the market giving buyers more to choose from so it’s made it more difficult to commit to a purchase,” said Las Cruces real estate agent Karen Trujillo. “In 2004 there were fewer homes to choose from in a particular price range.”

Las Cruces is on par with the rest of the state. The Realtors Association of New Mexico reports that home sales are down in 13 out of 18 markets.

Pierce said the average price of homes in Las Cruces has declined slightly. Houses that sold after less than a year on the market did so for an average price of about $229,000 compared to $237,000 a year ago. The price for a home that sold after spending more than a year on the market actually increased slightly from last year. This July the average was $200,336 while last year that number was $192,792.

West pointed out that the overall average price is down from $212,921 in July 2006 to $199,872.51 in July 2007.

With the pullback in the mortgage loan industry, some wonder if there are loans to be had for home buyers. There are, as long as you have good credit.

Louis Sauceda, owner of the Official Mortgage Team of New Mexico in Las Cruces, said that adjustable-rate mortgages and no-money-down loans have gone away.

“We’re back to mortgage lending 101,” he said. “People who have good credit and good jobs and incomes can still get loans.”

That does not mean people should stop shopping for loans or houses.

“It’s probably as good a time right now as any as far as [mortgage interest rates] are concerned,” he said.

Rates on 30-year mortgages sank last week to their lowest point since late May.

Mortgage company Freddie Mac reported on Thursday that 30-year, fixed-rate mortgages averaged 6.52 percent. That was down from 6.62 percent the previous week and was the lowest rate since the week ending May 31, when rates stood at 6.42 percent.

“There’s a great opportunity to refinance because rates have come down,” Sauceda said.

Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 6.18 percent, down from 6.30 percent last week.

As to foreclosures, numbers from RealtyTrac Inc. show a slight decrease in the number of properties in foreclosure or preforclosure in Las Cruces. In January, RealtyTrac reported 148 such properties, while last week there were 134.

Christopher Erickson, professor of economics and international business at New Mexico State University and executive editor of the New Mexico Business Outlook, said that Las Cruces will be touched by the slowdown in the national economy.

“The [bad credit mortgage] crisis will almost certainly have a spillover effect on Las Cruces,” he said.

“Commercial and residential construction is likely to see a downturn. This is already showing up in the construction permit data issued by the city, which is down sharply compared to last year.”