Newsletter

November 1, 2010

It may seem that confusion is the only thing we can count on in the real estate market, but we think we can make sense of it for you – at least to some degree and at least in our market.

There’s no question that buyers want to buy at the bottom of the market.  Sellers want prices back where they were at the peak of the housing boom.  Smart buyers know that they can’t “time the market.”  Smart sellers know that they can’t time the market either.  We can’t predict the market, but we can help you understand where you are – at least in our local market.

On the following pages, you’ll see statistics comparing the first three quarters of the past three years.  What you’ll see in general is a continued decline in prices per square foot but, in most cases, an upswing in the number of transactions.  We see the increase in the number of sales as the result of three things:  First, we have a number of sales that can be attributed to the tax incentive in the earlier part of the year.  Second, buyers have begun to see the incredible values now available in our markets. Third is the feeling that we’re no longer in an economic free fall.  We believe that if the trend of increased numbers of sales continues, prices will now level off.  This is a pattern we’ve seen time after time in past housing downturns.

At this point, our absorption rate remains very challenging, with a low of 15 months of inventory for homes under $500,000 to a high of 48 months for homes above $1,000,000. Foreclosures and short sales in Santa Fe certainly account for some of this inventory.  There are currently 90 bank owned properties and 120 short sale properties throughout the county.  In comparing median prices for just the third quarter of this year with the third quarter of last year, prices in the city have actually risen and prices in the county has remained steady.

An anomaly in this picture has been Las Campanas, where the number of transactions is down.  In that market, we feel that there has been a delayed reaction to the uncertainties of the turnover of the Club at Las Campanas to the Members.  Now that the turnover is complete, with the Club having been turned over debt free to the members, plus the assurance of the domestic water supply, we anticipate that this market will stabilize also.

A clear bright spot in the picture is the number of sales in the Southeast sector of Santa Fe.  The number of sales in this area is up by 50% from the first three quarters of last year!

 Lot sales throughout Santa Fe continue to be very soft.  We expect that this will continue until there is some upward pressure in prices of existing homes compared with building costs. That upward pressure is unlikely as long as the amount of inventory of homes on the market remains this high.

What we know for sure is that we are selling houses.  We’re pleased to say that we’re once again #1 in sales throughout Santa Fe.  We owe this to your referrals, your loyalty, and your confidence in us. THANK YOU!

Click Here to Read the 2010 Third Quarter Newsletter!