A time of transition

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Over the next month or so this blogsite will undergo some changes in authorship and management. Eventually the style and design will likely change also, but that will be up to the new administrators.

A little review; many years ago I started a monthly newsletter with information about Santa Fe residential real estate. It has always been free and seemed well received by those that wanted to be on my mailing list. Years later, I converted the information into this blog format so it would be available 24/7 to any interested readers. Over the years various charts and spreadsheets were developed to illustrate the local trends of real estate sales and inventory in Santa Fe. Those same charts are still available to you by clicking on any item from the list in the left margin. In many cases the history of statistics runs from 2001 thru 2019.

The entire economic meltdown and real estate crash is reflected in the charts and figures, primarily visible in comparisons from 2007 to 2016. Yes it really did take us almost ten years to completely climb out of the hole we fell into. I do not choose to remind you how painful those years were for home sellers, mortgage lenders and Realtors alike. Now things are much different. Sales occur quickly and very few homes stay on the market for a long period of time. You’d have to find a poorly built dwelling with obsolete floor plan, missing canales, rotted out subfloors and aromas of mold to find a home that does not sell in short order. As always, the above average homes sell first. then average, then eventually the leftovers that someone learns to love despite its flaws. There is less than a three month inventory available in homes under $500,000. Even homes above a million show less than a year’s supply compared to 2009 when it took almost four years on average to sell a home.

So as yours truly, this trusted blogger, arrives at an age near 70, he has happily decided it is time to do new things and leave the blogging to others. In this case, santaferealestateconsultant.com that happens to be a talented team you will get to know soon enough. I have worked with Melissa Pippin-Carson and Roger Carson for many years and know they will be good stewards of this real estate blog. They already author a print column in the Santa Fe New Mexican monthly supplement for real estate known as the Guide. I cannot tell you which one does most of the writing or if its shared equally, but count on quality content and also know that you can confidently work with them accomplishing your own personal real estate needs. Their established success and leadership in the area real estate market makes them a top choice among real estate professionals.

Twicethesellingpower@gmail.com is their email address.

Welcome to 2020

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My first impression was to tag this year as the year we are all going to have perfect vision. Then I got to thinking maybe I should just hope that we keep our eyes open and woke to what is happening around us everyday. Not a day goes by that I don’t think we could be doing a better job of caring for our sick and homeless, providing equal opportunity for all people to achieve the level of actualization they strive for and doing something major and fast about the collapsing climate and ecosystems we have abused for a few centuries.

Buying a car this year? Make it a hybrid if not an electric vehicle. I don’t happen to own a Tesla, but there is an owners group and they seem quite happy with their electric vehicles. (No, I don’t own stock or promote you buying a Tesla – just an observation). In my personal life I have been driving a hybrid for almost 11 years and the gas savings is real, getting between 37 and 39 mpg for that many years has saved a few dollars and lowered my carbon footprint. I am not bragging or looking for praise. I am just saying we all need to do our part, whether its using your own bag into the grocery store or choosing not to select overnight shipping for that furnace filter that you could pick up on your next round of local errands.

What about in your home? Using less fuel to heat is common sense. Maximizing your solar gain (free heat!) and cutting heat loss at night with insulated window coverings makes a difference. So does selective planting to create shade so outdoor living in the hotter months is more pleasant; or build a pergola or shade structure with renewable materials.

What does this have to do with residential real estate in Santa Fe, NM? One of the things we are known for is quality of life. Extending our futures by using less fossil fuel might be a good move. Wait, don’t tell me you are a climate denier? Sorry, you may not pass GO and collect $200 from this game. Maybe your financial situation is such that you don’t feel you need to be frugal about non-renewable energy use. Do it anyway, for others. Maybe you take separate car trips several times a day because you can and you want to. Try combining those trips into one. Yes, it takes a bit of planning. Park once and walk between stores and offices you intend to visit. It will look good on your step tracker and your attitude will improve.

About the 10th of January we plan to publish year end numbers for 2019 in both housing unit sales and inventory, giving you an up-to-date look at the state of the market in Santa Fe. Be prepared. The market is strong and sales are robust. If only we had more inventory to sell we would have even better numbers!

Enjoy the winter festivities. Try to get out on the snow and don’t forget those who are missing the pleasure of being in Santa Fe this time of year.

What a decade it has been

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Back in December 2009, if that is about the start of this decade, things were quite different in Santa Fe, NM residential real estate.

Consider looking at any of the charts or spreadsheets I include in this blogsite, available by clicking on the item in the left margin.

Lets look at the Absorption Rate – All Price Ranges chart and compare 12.31.09 with the most recent end of month (11.30.19).

1833 homes for sale then versus 677 now

1201 home sold prior 12 months then versus 2290 now

Average # homes sold (annual) 100 then versus now 190

Average months to sell all inventory then 18.3 versus now 3.5

Conclusions? Inventory is about a third of what it was then. Number of sales on an annual basis is almost double. Absorption rate is is about 1/5 of what it was then. Homes are selling faster, mainly BECAUSE there are fewer homes for sale. We could play what if and say what would thing be like here today if we had over 1800 homes for sale. But we don’t have that so pressure keeps pushing homes values higher BECAUSE someone will pay more due to limited inventory.

On another chart – Absorption Rate – $1 million and up price range, we are in uncharted territory with the Absorption Rate now at less than 10 months when it has been as high ass 46 months ten years ago. That is more than 4 times faster absorption.

Is the Santa Fe residential real estate market healthy? It is in terms of rapidity of sales, but it is hurting with a severe lack of inventory primarily under $500K. Is it fair to say if there were 200 more homes for sale under $500K they would be sold in 3 months or so? That is the average with low inventory. Of course more homes for sale would benefit buyers in their negotiations with sellers and it would also mean more prospective buyers would look at Santa Fe to purchase.

As the wise guys said in The Irishman (new Scorsese movie) “It is What it Is”

Enjoy your holidays and please do a rain and snow dance so we have a good supply of water for consumption and those homebrews you have mastered. Give your favorite service person a tip if you see them and thank them for all they do. And be most kind to first responders who risk their own lives and health taking care of us and our little mountain village.

It will be next year soon, a new decade and possibly a new home for some of you. I hope it is going to happen if you want it to.

Real estate has (maybe) never been hotter

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Remind me when the residential real estate market in Santa Fe NM has ever been as “hot” as it is today. Maybe my memory is failing, but we have never seen absorption rates this low (number of months to sell existing inventory) and I know of no other measure that is as accurate in describing the status of our market.

What this means is we are deep into a seller’s market, with buyers having little or no leverage when attempting to negotiate purchase price and terms with a seller. And when the market is one sided in status, it becomes predictable and numerous generalities can be applied.

As the history of this blog illustrates, the number of homes in the higher price ranges has gone up over the years while the number of homes in the lower price ranges have gone down. There is precious little inventory of homes available under $300K and one could say (without irony) that there is nothing to purchase for less than half a million…

These are tough times for someone wanting to own a home in the City Different unless they are well established with equity from another home they are selling or have a gob of cash (or borrowing power) available.

The other day, on a flight into ABQ, a person in my airplane row spoke of arriving to take a job in the hospitality industry, but had never been to New Mexico before and did not know where she would set up residence after a week plus of gratis lodging provided by her new employer. She did not know the average sales price of a home in our market is in excess of $525,000 or that residential rentals are rare and relatively expensive.

How do we lure the best and brightest adults to Santa Fe when what we really have to offer is housing for the wealthy and retired? Is our town going to become a cult location only suitable for those who can spend more on housing than 95% of everyone else? Will we still be a major art market and support starving artists here if they cannot afford to live in Santa Fe? Who will wash the dishes at our favorite restaurant and where will they live? And how will they get to work? Who is going to keep buying the homes that are for sale other than transplants and newcomers who are not put off by the prices they see here?

Daily one might meet someone wanting to put a freeze on growth in Santa Fe (build a wall around it I suppose) now that they are inside. Others welcome the diversity and cultural benefits to an open city that does not keep people out (although many still cannot afford it). I was a newcomer once (March 1983) and rarely felt like I wanted to live elsewhere. And yes, some would say I should never have arrived in the first place. For example, a brother of one of my closest friends believes it is people like me that have ruined Santa Fe. Turned it into a big ugly town instead of a small friendly town. Now choose to live 45 minutes South, in Placitas (which reminds me of much of rural Santa Fe) and feel perfectly at home.

In the last 15 years we have experienced a complete crash followed by a total rebuild of our market. Prices plummeted to well below replacement cost and then climbed back to where they are now; above anything we have seen before. That is just how its looking to me. You may have a different view.

Please imagine someone else tending to this blog by early next year as I focus on retirement and the enjoyment of middle age. It has been fun, a lot of work, caused some heartache and damaged some professional relationships. But it has been worth it and I am personally glad to have shared some of what I know to help you in your real estate activities.

Happy safe holidays!

Alan Ball

alanball2@gmail.com

Socialism and home ownership

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That word in the title is thrown around quite a bit in political talk these days, more by those that use it derisively than those that prefer it. It seems mostly in use as a scare tactic, as in the GOP talking point that if you vote for a Democrat, you are choosing Socialism. But saying that does not make it true. And Socialism is defined in many ways just as, for example, being Christian can be defined. As Margaret Atwood said in a recent interview about her new book “The Testaments”, are we talking about a Christianity where the Pope is the ultimate authority or are we dancing with snakes and collecting moon rocks?

Do you personally think Socialism is good or bad? And how do you define it? You may say that Socialism means nobody can own real property in their name and you would be against that concept. Or you may say anyone with the means could own real property as long as they participated in the governmental systems established by leaders past and present such as property taxes, school districts and mandatory hook up to municipal sewer systems for household waste.

This dialog has been going on forever. Some recent writing about it can be found at a page on Quora thru this link: https://www.quora.com/Does-democratic-socialism-allow-private-ownership

or if you are thinking a deeper dive is in order, I am certain you will find endless resources and articles about this very subject. Again. definitions are important, i.e. democratic socialism may be quite different than another style of socialism you have heard tossed around. Will the state (or whatever authority in charge) take away my ownership of my home? Can I expect to own personal property too? I like cars. I own eleven cars and trucks. Will I be able to keep those?

Maybe the time you spend reading about Socialism will help in your understanding of the term and how it is being used these days.

What is going on in Santa Fe New Mexico residential real estate? (did you like that segue?) It is still hot as we could handle right now. The market is seeing most product get scooped up in short order as it becomes publicly available. And you can bet that those homes that make it into the MLS systems and are listed for the public (and their licensed brokers) to find online have already been picked over by others trying to find the best deals. If you see a home for $350,000 that has been on the market for 90 days, it has already been looked at and passed on by many people. That doesn’t mean you should pass on it too. It might be just right for you. The game of finding the new listings and submitting an offer in the first day or two is a difficult game to win.

If you were to focus on some of the spreadsheets and charts available to you on this blog/site, you will see an ever-increasing trend toward more expensive homes and fewer less expensive homes. The million plus price range keeps growing in supply as it continually grows in absorption of that supply. The lowest price range shrinks in supply as there are no homes for $1 dollar or even $100,000 dollars. Under $500,000 really means between $200,000 and $500,000 these days. And not enough new homes are being built to satisfy the demand for homes in that low range. Some Santa Fe residents would prefer NO new homes being built because they want to freeze the town just as it is, while others recognize their own children and grandchildren need to live in decent housing, just far enough away but still in the same county.

The long term outlook of Santa Fe real estate may be heavily influenced by water availability, but for now it is still being discovered by people of means and it is still landing on short lists of where some people want to retire to. Hopefully many of those newcomers will take an active part in its future and become involved in preserving its past. Who among you wants the town to be available for absolutely anyone to move to, and who wants it to be restricted and limited in its growth? Pricing and moratoriums on water hook ups are ways to limit growth.

Thankfully the hot summer is almost past and we can pray for an above average snow pack in the mountains this winter. That is the key to stalling the drought that is making water in the West so scarce.

Pushing uphill

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We cannot just roll along but must push uphill in order to get into a home or to help a purchaser buy. The lack of inventory is scary and sales would see even higher numbers if more product were available to buy. New highs were set again last month: most sales above $1 million in any 12 month time frame, most sales between $500K and $1 million in any 12 month time frame, fastest average absorption rate for under $500K in our 15 plus years of tracking, etc.

The spreadsheets and charts here tell the story. We have a red hot market here and that is saying something after more than 10 years of recovery from the cliff we all sailed over in 2007 and 2008. Some markets recovered more quickly, mostly those with strong employment trends or legal marijuana such as areas of Colorado. Santa Fe does not have either of those factors (I cannot include service industry jobs at below living wage pay rates), but we do have Meow Wolf. It has been responsible for more economic growth than any single other thing that has taken place in the last 10 years. What can compare? The expansion of St. Vincent Hospital? New casino buildings?

The fact that Santa Fe was always a major art center helped a new venture like Meow Wolf succeed, we suppose. but maybe it was unique and original enough that it would have taken off no matter where it was located. But not Los Alamos or Las Vegas NM. And not Taos or Raton. Look at the value of Meow Wolf stock since it was first issued. Nothing like that exists in Santa Fe New Mexico.

Should we lament the crazy hot market conditions? Maybe yes if you are looking to buy as your options are severely limited. Sellers should be happy. If they are not happy they might have the wrong Realtor because if anything is true to day in the residential real estate market in Santa Fe, there is certainly a buyer for every house listed for sale. Personally a more balanced market can favor more people overall, providing a level ground for all to stand on. But markets are constantly changing. There is no perfect real estate market as it turns out.

Thank you for following along with my reporting about the City Different. We may lack some road crews fixing our potholes and repainting stripes, but we have plenty of people wanting to live here. We may lack transparency in government and social services, but if you can afford it, you can get almost anything you want here. We might not have enough opportunity for our young people to stay here after leaving school, but we have plenty of old folks that need medical attention and help with their computers. Can’t find a job? There are jobs; food service, retail, personal assistance to those in need. Sad though they might not be what you want.

The vibrant market gets hotter

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Which month you choose to buy a home might make a sliver of difference in terms of what is available and how many other potential buyers you are competing with. But overall it does not seem to matter very much. Homes sell quickly 12 months a year in Santa Fe and there is no reason to wait when you are ready to make that purchase. It is not as if there will be some extra inventory next winter and sellers will be so motivated they will slash prices to sell.

Someone you can identify as a seller today will have already sold that home by next winter. You would have to try really hard not to sell a home you have listed; something like no bathrooms or extensive black mold or dream up something else that would turn off every possible buyer. Just because it needs to be remodeled does not mean it will not sell. Look at home sales over the last couple years and those that needed an updated kitchen or bathrooms sold anyway, albeit for a bit less that those that had been updated.

The lower the price range you are looking in the more you must be ready to move quickly in order to secure a home you want to buy. There are so many other buyers out there looking for the same thing that hesitating will not serve you well. Once you get into the mid ranges of prices in residential real estate in the Santa Fe area, the lack of inventory is still an issue, though not quite as severe. But a good quality home that presents well, anywhere from $400K to $750K will likely be sold in a matter of two months or less. My number for that phenomena is the Absorption Rate as published in the market stats available to you on this blog. Take a look when you get the urge and factor that into your plans to buy or sell a home in the near future.

Next year could be different but I doubt much can change in 12 months or so. Any large build out of new homes is already on the radar and those homes are already being built; mostly they are north and south of I-25 off of Richards or in the scattered developments off NM 599 and Airport Road. And those only partially satisfy the demand for housing.

Thank you for stopping by to update your informational needs about Santa Fe real estate. I wish all of you a prosperous and peaceful summer season in the City Different.

New stats posted thru April 2019

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Read and copy or print if you like; newly calculated statistics are now available on the site for Santa Fe residential real estate sales thru the end of April 2019. Sales continue to be strong and there is a small increase in inventory which should be absorbed fairly quickly. Even the $1 million plus price range is seeing homes sell, on average, in less than one year. This is uncharted territory. Lets check back later in the year to see how things are going in that and all price ranges.

Thank you

The lies keep on coming

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Just when you thought our Dear Leader might run out of ways to misrepresent the facts of any given topic, he comes up with new and unique ways to tell lies. And some of them just seem to be told so he can stay consistent in his lying. But when you hear some of them, you have to wonder what his motivation is for lying when telling the truth would be easier and would appeal to more people. After all , he adores attention and wants the largest audience and Twitter followers of all time (even though half of his might be bots and fake accounts).

It’s a bit like someone I know said of another famous liar: She would rather walk up 12 fights of stairs to tell a lie from the rooftop than tell the truth in front of you on the sidewalk. It seems even worse than the disorder known as being a pathological liar. Maybe there are degrees or levels of dishonesty. Little white lies might be lazy; someone did not take the time to research or ask questions – so they spout some lies to act as if they know what they are saying. Bigger lies can actually cause harm or injury (or death) which is many times more serious and destructive than those little white lies. Are lies important? Does it matter if one person with a high profile and undue influence over millions of people tells lies? Is that worse than you or I telling lies (for whatever sick reason) with frequency.

Since there are plenty of sources to feast on the huge bounty of lies told by our President, I will not repeat or attempt to recount them here. But if you do not accept that he is continually lying and do not believe his critics who claim he is dishonest, what is your problem? Do you lack a critical part of your hearing mechanism? Are you blinded by his orange skin and hair? Were you so afraid of women and/or blacks with some semblance of power that you were willing to vote for a corrupt, racist, abusive child of a man?

Once you were asked if you would choose to have health insurance or a white male in the White House and you chose no health insurance so you could have your while male. When that black President, Barak Hussien Obama, produced a flawed but effective health care system that added many millions into coverage that had none before, you called him a Muslim and wanted to wash that stain from our history and heritage. You support the wholesale removal of health and safety restrictions on polluting industries and are OK with unlimited drilling for oil and gas near the sacred site of Chaco Cultural Center or above the Arctic Circle. You might believe your Dear Leader is above the law and should not have to answer to the other two branches of government, even though there is confirmed evidence that he accepted help in getting elected and is probably literally an illegitimate President.

You seem to buy the BS that he is the best negotiator and a very successful businessman although his list of failed businesses is longer than can fit on a single page. You wanted Trump Casinos, Trump Airlines, Trump University degrees and Trump Steaks to hold onto. Where are they now?

My amateur writing skills do not do justice to the faults and shortcomings of that man. He is so vile and crooked that he cannot distinguish between right and wrong. He cannot see beyond himself such that any question becomes framed as how does this or that affect him? No matter that he is in a position of power and could help millions of people out of poverty, malnutrition, failing educational systems and a drug crisis that is killing thousands. What has he done about regulating gun sales? You must have a license to cut hair, drive a car or sell a house. But you do not need any such thing to own a gun in America. That is something he could fix tomorrow. Does he even know how little he would have to do in order to become a good guy to millions of Americans? They would forgive him his shortcomings if he would just fix one thing they want him to fix. Democrats would even vote for honest and helpful Executive Branch policy efforts that were humane and good for the common man. But that would not support his need to have enemies and keep tilting at windmills.

You did not come to this Santa Fe residential real estate blog to read my rantings about Trump did you? No apology. You can stop any time you want to. Nobody is going to tell you what to do or think here. My usual recommendation is to gather all the facts and allow the facts to help you arrive at a direction or a decision. Those facts allow you to feel strong in your convictions and stand tall against the winds of bullshit blowing around.

Same song, different verse

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Take a quick look at the most recently updated statistics on this blog site and tell me, honestly, if you think sales units would be down if there was a selection of homes for buyers looking under $500,000. Go ahead, I’ll wait.

It is not pleasant to report that sales are down, but they are. They are down because there are precious few homes for sale for qualified buyers under that half million price point. That happens to be the price range threshold I use to set up my reports: Under 500K, then 500K to 1.0 million etc… If one wanted to search more narrowly, say between 300K and 400K, the numbers could be striking and actually sad.

There are plenty of market forces at work in Santa Fe residential real estate, including the dimensional shift into higher priced homes. Take for example the First Quarter Sales report attached and available for you to view by clicking in the margin. In the 15 years of reporting, home sales above $1 million have risen from single digits for the quarter, to five and six times that lately. This shows the effect of appreciation and the ever-increasing average and median home sales prices. Another way to view the shift is comparing the average sales price for a home in Santa Fe city and county for the two years 2001 and 2018… $295,674 then and $493,715 for 2018.

This is graphic evidence that the increasing average prices continue to hurt the first time home buyer and lay waste to reasonable market conditions in that lowest price range of under $500K.

How about comparing the # of months of inventory, on average, that our market offers to potential buyers, say as recently as 2009 compared to 2019. Then it was in excess of 13 months to sell a home; now it is barely over 2 months. do you think we could sell another 100 homes a year in that lower price range? How about another 250 homes? I suspect yes we could as there seems to be demand sufficient to accomplish that increase.

All is not lost for home buyers in Santa Fe. Their choices are limited and some say the quality inventory is gone in a flash, so one must be ready to move quickly with a solid written offer and be prepared to compete with other buyers.

I remember a time when a buyer customer I was showing homes to was upset because a new listing popped up overnight and I did not know about it to arrange for her to see it. Never mind that the market was much more saturated then and it would likely have been on the market for several months. It was not even a finished home so a large portion of the buyers eligible or interested would not have been able to secure a mortgage on an unfinished home. This buyer could due to the family trust having the ability to set him/her up with mortgage debt he/she automatically qualified for due to last name, DNA and being in good standing with the estate attorney in charge. Lucky me I was able to help with the sale. Lucky buyer that the home could be shown the first day it was on the market. We were the first to see it and of course the first to submit an offer.

Your favorite blogger will return soon with more analysis of what is going on in Santa Fe real estate. Stay woke!