2018 in review = part one

Actually in the rear view mirror, we’ll now look at 2018 for statistics relevant to Santa Fe residential real estate. I’ll point out a few things available for you to see on the spreadsheets and charts I have posted (see left margin for access to same).

An annual posting known as Fourth Quarter Sales shows the serious effect of the lack of overall inventory with the most pronounced shortage in the “low end” of homes sold below $500K. Yes, I know what you are thinking; that a home selling for $495K should not be considered “low end”. But this is Santa Fe we are reviewing where the average sales price in 2018 (Santa Fe county and city) was $493.715. This is out of an overall sample size of 2429 homes. In that report, the total sales for 4th Qtr 2018 were less than 4th Qtr 2017 and the obvious shortfall came in the under $500K range. All other categories went up. I would venture to say that if there were more homes available for sale, at least another 70 to 90 homes would have sold in that price range. And maybe they did sell; just not reported to the SF Realtors Association MLS database.

The next report I will suggest you look at is called Residential Lot Sales (again, from the list on your left). This annual report shows a still muted activity for lot sales in SF county and city. Why is that? Several reasons come to mind. First, the old saying that is still true… “get lots while you are young”. And another popular saying is “they aren’t making any more land so buy now”. And yet another possible reason is that the real estate crash that has devastated many individual nest eggs over the last ten plus years saw lot sales drop (again see chart) from annual units of in excess of 600 to just 257 units sold in 2018. And yes, there could have been plenty of sales not reported to the SF MLS database. I know Realtors try to report sales to help make the data more useful, but sales between friends, family, associates and sales without a Realtor involvement are not going to show up in these figures.

Did 350 sales just disappear? Yes, quite so. When a lot in Las Campanas sold for $210K and years later sold again for $85K, something tells me that investors are going to stay away from residential lots as solid investments. That is just one example, but those exist all over the place, if you can find the data. Average sales price now is similar to what is was in 2002 and 2003. While it went above $200K in subsequent years, it went back down and has not been above $200K since 2008. The transition from ’08 to ’09 shows a decline of 63% in unit sales and a drop of more than 25% in average sales price. You could say that was the day the music died. Who was left holding land and lots with a fairly high amount of debt? We all know at least a couple people like that. Did they survive financially? No, they almost all had to deed lots back to their lenders or face expensive and drawn out foreclosure action that might also have included bankruptcy. Lot sales are not a fond memory lately.

I will continue this review next week after I get in some alpine skiing and some much appreciated rest. At my age I am a more careful skier and a more fitful sleeper. Naps are glorious.

Posted in Home Values, Santa Fe, Santa Fe area real estate, Statistical Data - Santa Fe real estate market.

The writer is a 68 year-old young man engaged as an active REALTOR (associate broker) with Keller Williams, in real estate sales and management in the Santa Fe NM market area. My career has been in and around the real estate industry for more than 35 years, ranging from mortgage lending (interim, commercial, residential); residential property management and leasing; shopping center development and leasing; real estate sales; sales training; title insurance as an executive and an escrow officer; various management positions; consulting and other related activities. That plus a bunch of banking experience including our family-owned Bank of Santa Fe in the 1980s. Where has the time gone?
My background means you have my working knowledge of the entire transaction process at your disposal. That comes with honesty and no bullshit.