Ready, Set, Go

Nobody in real estate makes a living making predictions. They might speculate about some trends and then be right or wrong, but there is no paycheck for that. The reward of being right is not wealth or even comfort. To correctly predict the 2014 year in Santa Fe residential real estate, it seems best to use small changes for the better or worse. The fast appreciation many hope for is almost a promise of future loss. We are moving forward, but it is steady and in small increments, not a hurried pace. This blog has countless references to that gradual improvement. I am sticking to my story.

What happened the last 12 months is likely a pretty good indication of what will happen next month. It is highly unlikely that all of a sudden home sales will double and we will immediately shift into a seller’s market. Someday maybe we will be there again. But things just do not change that fast. The changes are rarely surprising and are primarily the momentum we have recently built.

I predict I will continue to publish this blog and also promise to post more often than in the past. A process of redesign is underway and I hope you like the new look when it comes out soon. And yes, names will be named if you want to work with the same talented person that is helping me.

So April 2014 should be a pretty good month. Why not? The past year has seen slow but steady improvement and now its spring! Rates are still quite good and buyers are starting their search process a bit earlier this year. This is no bandwagon, but still you don’t want to miss out.

Good trendlines

Quick study of the most recent statistics for Santa Fe residential real estate shows improvement in many segments. Comparing February 2013 with February 2014: unit sales of homes went from 98 to 129, an increase of 31, and also a percentage increase of around 31%. The wise ones reading this know that one month does not make a trend, but could 2014 blossom into the year that many people actually feel the recovery?

In the 1 million plus range, for the last full 12 months (thru February 28, 2014), unit sales exceeded 100 for the first time since 2007. As we have about 24 months of supply in that range, an increase in sales is excellent news for hopeful sellers. Yet still buyers generally have the upper hand in negotiations due to that amount of inventory.

Also of note, of the 1790 unit sales over the last 12 months, one half of those sales were for sales prices below $321,000. While our average sales price is much higher, the median price tells the tale of where the activity is (below $500,000).

Santa Fe rarely tracks the national trend lines and we are often thought to either lag behind or be running a completely different course. Pick your poison, but please don’t assume our local market is behaving in the same manner as Denver, Dallas or Phoenix. They are, after all 25 to 50 times larger than we are. And they don’t seem to mind the constant boom and bust cycles. In fact they define them.

When you get ready to select a real estate professional for Santa Fe, look for someone who is honest and hard-working. Choose a Realtor that has local expertise and a global reach. You know, someone like me; Alan Ball  =  505-470-7153  phone or text, or email me at alanball2@gmail.com

Springtime is just around the corner! What allergies??

What does your market look like?

So many experts, so little consensus…  If one agrees the phrase “All Real Estate is Local” is mostly true, then comparing our market to other markets might reveal some disparities. Some think Santa Fe real estate’s recovery  is lagging the rest of the country. What do you think? Post a comment if you don’t mind being quoted.

Nationally, many areas have a shortage of inventory of homes, which feeds the concept of a seller’s market. In some cities, prices are rising again (like the good old days we may not want to return to?) and buyers are having to scramble to secure the home they want. A balanced market would be good, if only it were that easy.

What is happening here? There still seems a disconnect between seller’s ideas of value and ultimate sales prices agreed to. Plenty of examples exist of starting prices around 10% above final sales prices. What is concerning is the length of time those sellers take to realize they are not participating in the market conversation about their home. Then they lower the price and there is a flurry of buyer interest.

The delay between listing a home and selling it creates (at least) two statistics, one of which I feature in this blog. The Santa Fe Association of Realtors has a huge database with thousands of records of listings, sales, expired listings and so on. For our market area, there are some 90,000 different records. The focus of this blog is Absorption Rate, while our MLS database features Average Days on Market.

The differences are clear. For the 12 month period ending January 31, 2014, there were 1757 sales of homes in Santa Fe city and county. The MLS database will tell you the average days on market for all of those was 169 days. Yet an absorption rate analysis tells us that it is taking 9.68 months for all of those listings to sell. In days speak, that is about 290. And both are correct.

Ask your real estate professional to illuminate what this means for you. For more about this or any other residential real estate information for Santa Fe, NM please contact Alan Ball at 505-470-7153 or by email at alanball2@gmail.com

 

News:  site/blog redesign and upgrade is underway. Keep an eye out for the announcements and roll out…soon

A living treasure

One of the best things to happen in Santa Fe in the last 20 years is the building of the Dale Ball Trails. You have an opportunity to thank Dale and his wife Sylvia at the next Dale Ball Day, March 7th. As his very proud son, I am very thankful that he is still able to participate in events such as this. If you attend, Dale and Sylvia Ball will be delighted to see you.

Here is a link to the event information: http://sfct.org/trails/dale-ball-day

Cupid or stupid?

The obvious answer to the question is Cupid. Nobody chooses stupid. Or do they? On this romantic holiday, the restaurants will be full of couples staring into each other’s eyes. Some will be in lust while others might be doing what they think they must with no desire to be in the moment.

In relationships, sometimes people do choose stupid rather than Cupid. Woe to me for the times I have made mistakes! And so its true with real estate also. Ask the seller who has ignored his Realtors sound and carefully researched advice on setting an initial asking price. The home is not being shown very often and the feedback is usually bland or specifically says the home is overpriced.

That seller could have chosen Cupid (or the equivalent, which is an open mind to selling the home at what the market will bear). Maybe the seller cannot “afford” to sell the home at market value. Possibly they owe more than that on mortgages. Sounds like they are not ready to welcome Cupid (in the form of a ready, willing and able buyer) into their life.

Valentine’s Day is not normally a big real estate day and I don’t recall seeing references to the day in real estate terms. So pardon my taking liberties with the analogy above. Choose Cupid and live happily ever after! Choose stupid and end up firing your real estate agent and disrespecting the entire process. Or something like that…

By the way, new statistics are now available on the home page (click on the sunset picture header to return there) through the end of January 2014. Things continue to slowly improve, although January is kind of flat from same month one year ago. Inventory is at the low end of our historical range, which befits the season. Watch those numbers climb over the next 5 months.

The numbers we really want to see climb are the sales units and dollars. Improvements to those totals are always welcome.

If you have an urge to buy some chocolate or flowers, I would appreciate that, but give those to someone more special to you. Rather lets talk about your real estate needs and how I may be of assistance. From Abiquiu to Villanueva, from Cuba to Madrid, talk to an expert and be clear on what you want to accomplish. Then lets get busy and accomplish that goal.  Alan = 505-470-7153

 

How do you rate? and some News

Interest rates are published at least daily on many websites. Mortgage interest rates are a major factor – likely the most important variable – in a home buyer’s choice of loan programs and lending sources. A real estate professional like me should have a good working knowledge of mortgage products and a mortgage calculator or device app can come in quite handy when standing in the kitchen of a home for sale discussing what a buyer can afford.

More to the point, a buyer standing in a kitchen of a home for sale should already have a pre-qualification letter in hand from a reputable mortgage lender. Any written purchase offer from a buyer prospect that is not accompanied by a pre-qual letter will not be taken seriously by the owner of the listed property.

So yes, get a pre-qual letter  before you start looking, by all means. And it’s very easy to do. I know a number of mortgage loan officers, brokers and bankers that would love to visit with interested buyers and discuss what loan program and rate might be available.

And now for the NEWS: mortgage rates are going up. On any given day or week, they are slightly up or down from the last time you looked, but over the long haul, they and heading upwards. That is the opinion of almost all of the money and mortgage experts out there.

We will see about one percent in rate increases over this new year (2014) as we saw about a one percent increase last year.

By the end of 2014 and into early 2015, most expect rates two percent above what they were at the historical low of 12-18 months ago. Still, even a full percent increase from todays levels (around 4.2 to 4.5%) will still be below average rates from the last 25 years.

Would you like to read more about this? Try the “interest.com” site for a clear explanation –  http://www.interest.com/mortgage/news/

The National Association of Realtors chief economist has been saying the same thing for months. Forbes, CNN Money writers, probably even Donald Trump are all predicting the uptick in rates.

This matters to buyers because it has a direct effect on how much home they can buy. Every fraction of a percent in rate increases lowers the amount of available mortgage money for the vast majority of home buyers.

Contact me if you would like to know who the best lenders are that know the Santa Fe market. And if your present home is not a joy to come home to, let me know when we can start looking for a new nest for you and your family.

There are some good deals out there and I know how to find them.  Alan  505-470-7153 or just comment on this blog post… and I will be in touch.