Newsletter

April 30, 2010

We’re very pleased to be able to report an across the board increase in real estate sales in Santa Fe for the first quarter of 2010 compared to this time last year.  Thank goodness, since last year at this time we were witnessing, in sharp focus, the effects of the Wall Street melt down and the burst of the national housing bubble.  Overall, sales of homes in the city and county of Santa Fe rose to 281 in the first quarter of 2010 compared with to 229 in the first quarter of last year.  For properties under $500,000 the uptick is most significant with 207 properties sold this year up from 159 in 2009.  From $500,000 to $999,999 the numbers fell slightly from 51 to 49. Sales of properties over $1 million rose to 18 in 2010 compared with 14 in 2009 – percentage wise a large jump, but there is still a 43 month supply of homes over $1 million on the market.  That supply drops to 25 months for properties in the $500,000 to $999,999 range, and 14 months for homes under $500,000.

We believe that some of this momentum was generated by the tax credits for both first time and current homeowners; however, at this point we have only anecdotal evidence of this, supported with national surveys by groups such as the Mortgage Bankers Association indicating that this trend will hold through the end of the second quarter. The National Association of Realtors Pending Home Sales Index also supports this trend.  Additionally, in the good news column there are currently 205 pending sales throughout the county.  These break down to 149 in listing prices up to $499,000; 42 in list prices between $500,000 and 999,999; and 14 at $1,000,000 and over.  Many of you know that the tax incentives include purchases up to $800,000, but we believe that the strongest effect of the incentives has been seen in the lower price ranges.

With the expiration of the incentives, coupled with a rise in interest rates, we expect to see a pull back in the number of sales in the lower price ranges.  Interest rates are predicted to rise to near 6% by year’s end – still at historic lows – but definitely affecting affordability for many buyers.

Over the past 18 months, we’ve seen Santa Fe sellers becoming increasingly knowledgeable about our market and how it has been affected by the national and international economy.  We have all, I suspect, felt varying twinges of regret for not having sold our property at the peak of the market.  For many sellers, though, the desire to move on to the next phase of their lives has overcome this regret.  Buyers sitting on the sidelines currently appear to be more confident and willing to act on well priced, immaculately cared for homes while the market is at a low point.

We anticipate that sales will show moderate increases year over year and that at a sustainable rate of 3% per year prices may climb out of our declines over the next five years.  Five years seems like a long time, but with Case-Schiller data predicting that some markets like Tucson and Sacramento will not recover fully until 2020 and 2039 respectively, five years sounds like a blessing!  Naturally, every prediction is just that and there are clearly no completely reliable crystal balls.  What we do know for sure is that Sotheby’s “pending” sales are nearly double what they were last year at this time!

2010 is shaping up to be a very good year for our clients. Call us or e-mail us if we can give you information about whatever part of the Santa Fe market is of interest to you.

 Click Here to Read the 2010 Second Quarter Newsletter!