Strong, stronger, strongest

We can cheer and smile just a bit as we continue to build on a strong year, the strongest in many years, and stronger than we have had the pleasure to brag about for some time… The unit sales numbers for Santa Fe residential real estate are running at or above a 10% increase over last years unit sales numbers. That’s some news you can smile about.

Various spreadsheets and charts are available for your review if you enjoy digging into the historical trends and current versus prior tallies. Look on the left margin and select the report(s) you are interested in. Try the Third Quarter chart and note the increases in the 1 Million plus price range, 2016 and then 2017. That is a 42% increase. The entire Quarter, including all homes in the sample, went up 13.6% this year compared to last year.

Inventory is actually pretty low in the more affordable price ranges, with barely over 4 months of product  (using my absorption rate formula), while the overall market inventory to be absorbed, using the current rate of sales, is only 7 months. That is within shouting distance of a “balanced market” and based on recorded history in Santa Fe residential real estate, it IS now a balanced market here. While we have lagged other cities in our part of the US, we are healthy and solid in our growth lines without wild fluctuations that later could result in another bubble bursting… I can almost make a prediction, but I will not because I am careful not to, that we will not see prices and home values going down anytime soon.

But will they go up? Now that we are in balance and not very many new homes are being built to meet the demand for the smell of fresh sawdust, we are likely to start seeing actual price appreciation by mid 2018. It could come sooner but we are entering the cooler months and our winter time sales are usually slower; not as robust as summer and fall. Are you looking for a promise that homes will go up in value next year? That’s what you want? Anyone who promises anything like that is certifiable crazy but it very well could happen. I would be delighted to see some consistent across the board appreciation finally.

Get your deals while it’s still 2017 if you know what I mean. Next year could see the sellers tighten up and be less flexible on price and terms, knowing their home is one of only a few available with the quality and location everyone wants. The beautiful adobe in the more distant hills may not notice the market changes as those homes are less compliant with popular buyer location desires. Sellers, plan now to begin your marketing for next year. Buyers, get your pencils sharpened for the deal you want before next spring brings highly optimistic sellers to the dance. Or just buy or sell when you are ready to pull the trigger. Deciding when to do something based on market trends is not always profitable. Better to do things that work for your lifestyle and schedule than following what the masses are trying to do.

The day of the week of the month of the year

The charts and spreadsheets available to you on this blog site are now updated to include sales and inventory as of the end of August 2017. Eight months into the 2017 books and we are running a nice and tidy 12.3% above last years numbers in unit sales for Santa Fe city and county. That is music to many ears. To finally have consistent growth and improvement in our market is a welcome milestone. Remember all real estate is local and each home and neighborhood have distinct characteristics.

Nobody said it would be easy and it has not been easy to climb out of the deep hole that the economic crisis put all of us into. But we have succeeded and are not planning to fall back in anytime soon. There was a place and time (maybe around 2009 and 2010) when I firmly believed that residential real estate could lead us out of the real estate downturn, the tremendous loss of personal financial wealth and “loss of savings in the form of home equity” that we experienced.

It would have taken a mea culpa from the big banks (the ones too big to fail) accepting the millions of bad loans they had on their books as truly bad loans. It would have taken them swallowing a huge pill of write-offs, effectively lowering the principal balance of millions of home loans by tens of thousands of dollars. And all for what? To be done with the depression years sooner? They got bailed out (at least the ones that did not close up shop) so what did they care? The personal health and well-being of the CEOs and stockholders of those big banks would have had to admit to stupidity and white-collar crime, but it would have gotten things upright in a much faster timeframe.

No it did not happen. They took the bailout terms and never admitted guilt. They foreclosed on millions of Americans who were lied to when they bought homes they could not afford. The big banks profited when the loans were made and got insurance on most of the loans that failed to payoff in full. Those consumers that were innocent and actually qualified for the home loans they took out still suffered because of all the other junk and debris around them. Homes were sold for $400K that were worth $325K. When the home buyer moved in, the appraiser said it was worth $400K. But after the 3rd year of fixed payments, when the monthly debt service doubled or tripled, then the owner had a home worth more like $300K or $325K so if they owed $350K, what were they supposed to do?

I know of many that lived through the storm and did not abandon their homes and declare bankruptcy and/or sign a deed in lieu of foreclosure. They kept paying every month and yes, sooner or later the balance came down enough that they no longer owed more than the home was worth. It took ten years or possibly longer. And the entire time they had no increase in net worth and spent every cent they made keeping the payments up and not taking vacations.

What is your recollection? Here is mine. I am a little bitter about the dishonesty at the top of the money pyramid, and also a bit proud that I did not cave in and deed my home to the bank when it was worth less than I owed against it. Now that its finally worth what I paid for it in 2001, I am selling it. Maybe the money I spent on a new roof, new stucco and other necessary things is offset by the deduction of mortgage interest? I sincerely doubt it, but will do the math if it will help me accept 16 years of ownership and upkeep just to have nothing to show for it now.

The lesson that a home is not an ATM is not that difficult to learn. I never treated my home like an ATM. I used equity to pay for roof and stucco and other things the property required. The tough love that homes do not always go up in value is something I still see people struggle with. They expect their home to be worth more in the years after they purchased it. But in Santa Fe residential real estate, is that a reasonable expectation? Ask your friendly Realtor to help you arrive at a market value. No rules apply evenly to all property.

Remembering the tragic events of Sept 11, 2001 brings humility and respect to front of mind. We only are handed this one life and we should live it to the fullest every day. With hurricanes bringing pain and suffering to so many millions, being thankful for what we have is an everyday event. And if we can help others we are better people for taking action. We all have so much to share.

Every dog has his day

…said someone, once upon a time. I am not going to research the origination of that saying, but it sounds like something Mark Twain or Will Rogers would have said. Or possibly Richard Nixon. And so we find ourselves in the third quarter of the year with continued improvement in sales results and still very reasonable interest rates. The town is heaving with visitors and activity, although most Realtors I know want more showings on their listings. I guess I do also, because homes need to be viewed before they will be purchased. Where to begin? When Amazon starts selling homes from their website, then we will know this dog had his day.

Look at the numbers in the spreadsheets available on the left side of these pages. In all price ranges, the average months to sell has dropped from 9.68 to 7.38 in just the last year. In the popular one half to one million range, the drop was more dramatic, going from 15.46 months on average a year ago to 10.56 months on average now. The absorption rate, which is what we call that calculation, is faster when inventory is lower and sales are up; both of which have happened just since last year. This is a trend line that I have consistently been tracking since we found ourselves in the gutter after the bubble burst. You know that bubble? The bubble that had many believing homes never go down in value and often go up by double digits every year. Everyone was wrong. Competition existed on who saw the crash coming first, but nobody escaped without serious damage. Some are still in recovery. Just now we can say we have almost reached the level of activity we saw prior to the crash and that bursting bubble. Only this time we are on a solid foundation as to value instead of seeing high appreciation unsupported by the large majority of sales. If you spend $750,000 on a home today, it is not likely to go down in value in the near future, unless we are in a nuclear war with seas rising a foot a year and anarchy is the law of the streets. Will it go up in value? Maybe someday, but that depends on you the owner.

Fears of overspending on a home should be all but erased, although it’s still possible to pay too much. No question there are plenty of homes listed for sale where the asking price exceeds the likely final sales price. But buyers have become extremely price aware that price has to be resolved first, then the other issues (location, condition, style) can fall quickly into place. All the sayings about there being a home for every buyer and a seat for every butt will be tested as we move forward with less inventory and a fairly strong influx of buyers. Some buyers become disenchanted once they examine our metropolis and others feel the prices are not justified. But some just have to have it as their own. And we can accommodate those newcomers. Changes happen slowly in an area with such long history. Affordable housing has been a headline seeking a response since I came here in the early 1980s. And likely before that. We still have that problem; witness all the manufactured and mobile homes in every rural quadrant of Santa Fe County and beyond. Last I heard, about 50% of all homes in New Mexico were not site built, but were moved onto the site on a trailer.

This market is healthy, wealthy and wise, to coin another phrase. Or like an old boss of mine (while I lived in Denver) said of himself, “fat, dumb and happy”. Those are things one could aspire to, I suppose.

Get your house while you can, while there is an inventory to choose from. The builders we need to build homes are trying hard to risk speculative home starts and I hope they are amply rewarded. We need more of those in all price ranges. In the meantime, learn your dog some new tricks.

The cat wearing the hat

Your time spent online is yours alone, taking advantage of all the sources and distractions available. This can include reading current news stories, fake or otherwise. It could be sports scores or it could be health advice and new developments in human happiness. A cure for insomnia and relief for those with ingrown toe nails is out there also. Shopping can make you feel better sometimes. You might have to dig for a while or drill deeper than you thought at first, but sooner or later you can find almost anything you want to find on the WWW. Have dinner shipped to your doorstep. I will come by to dine with you.

If you have children and a spouse, and/or friends you connect with daily, its possible your online addiction could limit how much you have to give to those relationships. Maybe they are supporting your habit until you wise up and start participating in life with them again. Online addiction might be only surpassed by opioid addictions. Possibly the others are just as addicted and have not yet realized it; too distracted in their own way to notice your absence and fried brain and bloodshot eyes.

At times, I don’t want to look at the screen, but am willing to listen to the audio of an interview from a TV show, or a TED talk or podcast that dips into a subject of interest to me. Closing ones eyes can feel so liberating in a time of device screen paralysis. Unplugging from the short term pleasure of the skimpy rewards that being online gives you is not easy. I dropped off of Facebook months ago, after many more months of almost no activity or visits. Too many posts of kittens? Yes and too many nonsensical rants about Amurica and who has the right to believe what. I admit to getting news briefs from Twitter, in bites I can digest and at a time I want to take them in.

If I were a video or digital picture artist there are more venues than there are grains of sand. I could post a shot of each piece of toast I consume, with butter or not. I could post pix of my drive to my office, my walk from the parking lot to the office building, and my coworkers standing in my office door complaining about their current state of affairs. It might be fun to share photos of places I have been if only I were a more accomplished artist with a camera. I have photos of beautiful sandy beaches, castles on hilltops, amazing historic ruins only recently excavated, a beach wedding service, a farmers market in a foreign city, plus the selfies with me in all manner of dress and mood. How much fun can a person have?

In words it is left to the reader to paint the picture with a push and a tug from the writer. I write about real estate in this blog, touching on social issues that affect real property directly or indirectly. I occasionally rant about the things I see going on, but also realize if I rant then you are ranting too. Send me yours if it will balance things out between us. Words and numbers are the primary focus of my blog and I hope those numbers are easy to understand and useful to you. They continue to improve just a little bit each month and our residential real estate market in Santa Fe has solid footing and is almost completely finished clearing out the deadwood of foreclosures and short sales. The days of the super bargain are probably gone, even though those were not really bargains after all.

How many calls have I gotten from someone who sees a pretty photo of the front of a home that is listed at $220.000 with over 2000 square feet and 4 bedrooms plus a garage? Why is it so cheap? Well, the actual condition of the property is why. When you see a home in our MLS database that looks too good to be true, it has probably already been picked over by many people with similar ideas. How can I buy this and fix it up a little and flip it for a quick profit? An example where there was enough profit for two buyers went as follows:  First buyer purchased out of foreclosure around $120K and did minor touch up and painting. Sold it for $150K in a couple of months. Then Second buyer did more work to the home, leased it out for a couple of years and then sold it for $215K. Two parties made a few dollars on that one property. Today it is likely worth $250K and might be sold for that if the current owners wanted to sell.

So the cat with the hat is fun and entertaining. So are the Epic Fail clips. Reading Paul Krugman opinion columns online can be educational. Observing the White House roller coaster would be a hoot if it was not so disturbing. Seeing how your stocks are doing is fun as can be lately as the stock market breaks new ground almost daily. And seeing what your neighbor’s house is selling for is also interesting. Focus on what sells, not what is for sale. A for sale home priced at $500K does not inform you nearly as much as the home down the street that sold last month for $445K. Or the one around the corner that sold in May for $467K. Asking price is a suggestion. No more no less. The owner suggests your written offer to purchase should match the asking price or come as close to that number as possible in order for them to respond to the offer in a meaningful way. Ignoring an offer is also meaningful but in a different way.

Santa Fe sellers still collectively hold out a candle of hope that their home will sell quickly and for full price. But history, recent history being the only type that matters here, shows only the lower end price range homes in and around Santa Fe sell quickly and for full or almost full price. Why do other markets do things differently? In a recent referral of a listing ($280K range) in a Phoenix suburb, the broker I contacted did extensive market research and had the sellers do some work to the home before marketing it. Then the first day it was for sale was an advertised open house and 30 people came. Four offers came out of those visits and the one that won the bidding war paid about $11,000 more than asking price. The home closed on time and everyone was happy.

What is the difference between that market and ours? Here the seller and listing broker will price the home somewhere between 3% and 12% above what it will likely sell for. Then they battle to get people in the home and interested in the property. Time goes by and the broker and seller discuss a price reduction. When that hits the internet there is a flurry of activity on the home; some showings and some phone calls with questions about details of the home. But no offer comes and so after a few more months, another price reduction is entered into the system and another flurry of activity starts. Each time the new price is entered, a new group of prospects shows up online or in person. Once the asking price gets really close to the eventual sales price, then negotiations begin and serious contract preparation commences. A meeting of the minds occurs and escrow begins. Once all issues are resolved the closing can occur. And everyone is happy we hope. But maybe the seller waiting say nine months to sell and could have received the same net proceeds in two months had the first asking price been closer to the actual value. And we know that the actual value is what someone will pay for it, not what the seller has invested in it or what they hope to get. I hope to get to the top of the Eiffel Tower someday but I am OK if it does not happen. Sellers maybe should find a way to be OK with a faster sale instead of the same results after many months of anxious waiting and blaming the listing broker. It takes an honest assessment of the market and a Realtor willing to tell the truth to the seller.

Some sellers are not in a rush. Those people have alternative motivations and timelines. They might have $1,200,000 into a property and have already bitten several bullets to get the asking price down to $950K, while in everyone’s heart the final sold price will be closer to $850K. Is this normal for our market? Yes it is. Many examples are out there that are similar to the above recap. A buyer’s task is to separate out the highly motivated sellers from the ones that are just testing the market. Like the wolf going after the slow and slightly lost calf in Yellowstone, buyers will find the seller that wants to make a deal today and is not willing to wait 6 months. If you want to be that seller, that buyers surround and attack, price is your primary weapon. Price it to sell or price it to sit and look pretty. You can find your place in a magazine and wish they used different photos or you can be at the Bank depositing your sale proceeds.

When I get a cat I am going to get him a hat. Until then thanks for stopping by this blog site and feel free to use the statistics with proper attribution. You can disagree or you can do what many others do, use this information as if its your own. Then get a good nights sleep. And turn off your phone.

The Saga of Elk Mountain

Once upon a time, the lands around here were explored by people from other parts of the world, including from parts of Europe where they have to put names on everything. And many times explorers and adventurers, representing the King or Queen or POTUS of their homelands would attach the name of that royal personage or their own name on a large piece of land or body of water. Lake Louise, Mount Ranier, Bering Straits, Jamestown, Queens and even a little burg (larger back then) known as Elizabethtown in the Romero Valley of New Mexico.

Well, as luck would have it, the Europeans coming into what would become New Mexico gave some names to some of the mountains around here such as Wheeler Peak but the use of proper names was not so strong as many others were named for existing conditions, such as Trampas, Vallecito and Truchas. I mean, those are connected to things and events and beliefs, but not so much proper names. Then the mountain east of the Pecos River Canyon a low and massive hump of land with a barely discernible peak from below, but long deep snow cover in the winter, came to be called Elk Mountain. Now I am not a betting man but I believe at least 31 states of our 50 have a hill or mountain by that name. And that’s fine because names of things are used over and over in different areas and locations. Imagine my surprise when as a young boy I found out that the Broadway I lived on in Fremont Nebraska was not the biggest well-known Broadway around.

Now begins the saga as Elk Mountain has been properly named for many a year, but then politics sometimes gets in the middle of things and ruins them completely. Or improves them if you are of a certain ethnic or gender based group that depends on laws (borne out of political angst) to get to live your life in our bent out of shape country. Just last night I heard a guy say, on TV (a hallowed soap box from which to spread rumors and lies), that we are not a nation of immigrants but we are a WHITE nation. Wow, what box did that guy crawl out of? And what about Elephant Butte?

So the people sitting in Washington said one day that they had a compunction to honor some of their favorite sons-in-law (Kushner?) and sons of the Third Wife (Barron?) so the renaming began in earnest. Lake-of-the-Woods became Flynn Pond. Georgia was retitled Jaredland. The Smoky Mountains became Ivanka’s Ridge and so on and so on. Then they started seeing things named after animals and old Native American names, which they knew they could ignore because no descendants held any power over the 45 Regime and they would have little resistance. So Lake Peak, just above little Santa Fe, became Pence Mountain and Elk Mountain became Davidduke Hill. After several years of this renaming process the people were so confused and left in the dark that some of the information did not get circulated on a timely basis and National Park maps, for which there was no budget, started coming out with the new names. It was a tedious process to pore over those maps to find out what had been changed. There was an element of disbelief when many landmarks and lakes and streams and mountains and cities and states all of a sudden were named something else.

And who pray tell would represent the Elks, except maybe that old group of beer drinking guys that have clubs all over the country (Elks Lodges, each with a distinct charter and number) and all of the actual elk that live and propagate on those same mountains (except where they have been hunted out completely). Well, as fate would dictate, the Elks Lodge guys were not well enough organized to make a difference but the elk animals were very upset. They started dodging bullets and arrows with abandon and refusing to be shot for antler trophies and meat. The cost to the people who hunt elk was tremendous and the lack of meat on the table was a big wakeup call to all. And the elk, without the process of elimination that comes from being hunted, grew in population to where they were asking about homesteading on new lands and setting up new elk villages all over the place, even near Tucson and El Paso and areas where they were not expected.

This situation became a huge news item and of course many were confused because they thought it might be fake news and all. But it was the real deal. The story got even more weird when all the bald guys in American go up in arms because of all the mountains with Baldy in the name (and there were quite a few) that were renamed after 45’s various resorts and golf courses around the globe. Bald guys are not the type to offend and slight, let me tell you. So stay tuned for the Baldy Saga coming to a movie house near you.

You always hurt the one you love

When and if you ever choose to buy a home in the Santa Fe area, please consider treating yourself kindly and fairly and do the right thing for your family. Too many times a real estate transaction gets sideways because of poor communication or the lack of contact with customers. If you are interviewing buyer brokers to potentially work with, ask about the methods and timeliness of their communication habits. If you have a home listed for sale as a Realtor and you tell me you have not communicated with the owners of the home in more than a week’s time, I am concerned for your ability to do a great job for them.

Selling the home is the paramount task for a listing broker, but until it sells, is there not some minimum level of communication that should be reached? Would you put yourself in their position and think you would be perfectly happy without any communication for any period of time? How long would you be willing to wait between updates and reports of any interest or activity? A week seems to be about the longest tolerable time, to me. And what is that seller to the broker anyway? Are they not one of the most important business contacts they have while the listing is active? Realtors fight and claw to get listings, then amazingly drop the ball and stop the communication (why?) with their seller because they have no real news.

Being a seller of a home listed for sale is tough enough, with strangers walking through your bedroom and opening cabinet doors everywhere. No privacy and no taking a break from housecleaning and making it shine for a prospect. But if you are a seller and you know there have been showings of your home, or maybe there have not been many at all, should you expect an update or report from your chosen Realtor as to what they think is going on. Maybe as a minimum, the listing broker should share the feedback from the showings where feedback was provided. That can be invaluable and can lead to a serious consideration of the pricing and/or the condition of the home. When prospects continually say that they could not see the value of a home as it’s currently priced, that might mean its time to think about the price.

If I may be so bold as to speculate that your seller is someone you “love” — they are paying you a commission when their home sells — it seems they would be the last person you would want to hurt or treat badly. And yet it happens. And Realtors can hurt their buyers too, sometimes. A buyer who has chosen a Realtor to work with for assistance in purchasing a home should expect professional help and expertise. They should expect communication as befits the buyer’s agenda and timeline. Some buyer customers are going to buy in a couple of years. They likely do not expect weekly updates on our market conditions. How about the buyer that thinks they may be ready to purchase in the next 3 or 4 months? Seems like frequent communication would be in order. Don’t hurt the one you love; don’t hurt anyone, for that matter. But if you must choose because your time or energy is limited today, stay in touch with the ones you love. Days may feel long, but life can be unexpectedly short sometimes. Treat each day with respect, gratitude and appreciation.

Absorption Rate – Unplugged

A major focus of this blog site, along with statistics about the Santa Fe NM residential real estate market, is something called an Absorption Rate. On the left side of the site pages you will see the list of spreadsheets and charts available for review. Four of those charts are specific to Absorption Rates and they are in four price categories: all prices and then each of three smaller categories.

What does it mean if your home is approximately in the middle of the price range of $500K to $1 million? What it means is that there is an absorption rate that may apply should you attempt to sell your home. The rate uses averages so is no more precise that throwing a dart at a board, but it is very instructive if understood and factored in to how your home is marketed.

First, the chart for that price range shows four columns; inventory of homes for sale – total homes sold in that range over the last 12 months – average number of homes sold per month – average number of months it would take to sell all of the inventory (from the first column). This set of calculations presumes that only those presently for sale will actually sell and no new listings will come along in the mean time. It is a diminishing return sort of number, even though in reality, homes are withdrawn from the market and newly listed homes show up all the time.

Looking at the fourth column, the number of months entry; this is the approximate number of months it will take for those homes to sell. Let us say you have a home in that range and it is for sale. If the months count is 10 for example, one out of 10 homes will sell each month for 10 months. Each month 10 percent fewer homes will be for sale because they would have sold. A key question to ask yourself at this moment of clarity is: in which month do you want your home to sell? Maybe you are highly motivated and want yours to sell in month one or month two. Next I recommend looking at the other homes for sale in your price range and positioning yours to compare favorably with the competition. If you have a fairly “normal” home and it should be worth about $700,000, what is the asking price? If its much more than maybe $735K, what are you doing? Are you hoping a buyer will come along that cannot tell the difference between your home and another one that might be priced just above $700K?

The charts and graphs and spreadsheets herein are for your use and education. You are always welcome to share, print and quote the content with appropriate attribution. If you think I am an idiot and want to share your criticism, please feel free to contact me and I will try to incorporate your suggestions. There may be no other site that will give you the depth and breadth of information that this site offers. If you know of one, please let me know so I can take a look. I do like knowing what the competition is publishing.

Home sales up 3.3%

The results of 2016 data as reported to the Santa Fe Association of Realtors show a single digit increase in unit sales year over year: 2016 compared to 2015. The headline is the number:  3.3% increase. Overall the total dollar volume also went up, a decent number of 6.44%. The average sales price went up also; but only 3.03%. These numbers and the relevant spreadsheet is available for you to review by selecting it in the right margin (Monthly Residential Solds) which applies to homes, condos, townhouses & modular within the County (and City) of Santa Fe, NM.

Nobody can or should complain about a positive trend in unit sales, correct? The prior year over year (2015 vs 2014) showed up with a 7.8% increase. So we slowed down it seems. The actual increase in unit sales shows up as follows:  2014= 1824  —  2015= 1967  —  2016= 2032, which means the unit count increased by 143 for 2015 and by 65 for 2016. We did slow down a little bit.

That grand total of 2032 units sold in 2016 is still 27% below what we peaked at in 2005, during those red-hot years of liar loans, free and easy money, no doc no cry deals, etc. Still you will find plenty of homes that are worth what someone paid 10 years ago, assuming the did the normal upkeep and did not add-on or do a major remodel and update.

Land sales were hot then too. Many lots were sold in the last decade that still would not bring what was paid for them way back when real estate was great. Shall we make real estate great again? MREGA? Or maybe shorten it to MEGA? That sounds more poetic. Make realEstate Great Again. MEGA – Yeah, we just created a new ad campaign!

Some say the majority of last year witnessed buyers sitting on the fence awaiting the results of the national election. They were hesitant to make their move until they knew what direction the country (and interest rates too?) were headed in. Those same buyers might have had another excuse such as an ingrown toenail so that may have just been a convenient one to latch on to. And now that they waited, what is going on? It seems interest rates are climbing. This blog site does not track interest rates carefully as that information is almost everywhere online, but looking them up might illustrate that waiting was a mistake (if you need mortgage money). Does that mean 2017 will be better? Rising interest rates typically mean fewer buyers can buy so if 2017 is going to meet or surpass 2016, we have some work to do. Get out there and sell a home today.

If you are studying the Santa Fe residential real estate market in-depth, this site has a great deal of historical information you are free to access anytime. No future trends are predicted here. You are allowed to print pages and share them. I do not ask for compensation, but do request that you not brazenly plagiarise my statistics and pass them off as your own hard work. If you do quote me, please do so accurately and fairly. If you do not like the information and wished it showed more sales, that is not my fault and blaming me will only make you look worse. Yes, I have been blamed for being too influential on our market results. The concept is bizarre as if I spoke with a large number of sellers and/or buyers and said things that caused them to change the way they went about doing business in local real estate. Honestly I have lots of opinions (as everyone does) and am not hesitant to share them, but I try to let the hot air escape, staying primarily focused on the facts. It is a fact that there is going to be 12 months this year. I will report on each and every one of them. You can come back as often as you wish.

Lot sales up 10%

2017 saw a modest increase in residential lot sales in Santa Fe city and county reporting to the MLS database for the Santa Fe Assoc of Realtors. 2016 showed a total of 194 sales while 2015 showed 175. This is “modest” since we are still light years behind the volume of sales we experienced thru most of the last decade, topping out above 490 unit sales for six consecutive years ending in 2006. Since then it has been a dogfight just to be relevant and to be optimistic.

Lot sales trend down if people are not buying lots to build. Lot sales trend down when investors are uncertain of the values of lots year after year. Having been burned once or twice on a lot purchase, investors are standing on the sidelines waiting for a more stable and solid market and valuations. There are still a large number of lot sales (of the modest total we are reporting today) that show a sales price BELOW what that seller paid years ago. Would they reinvest in another lot? Without knowing which way the market was going? Not likely.

So any increase in lot sales is likely directly tied to a modest increase in future home owners actually buying the lot they want to build on in the near future. And we are not seeing a large increase in new construction across the board so new homes is not yet a thing we can get excited about. But the shift seems to be underway that will prove up an increase in lot sales again this year and beyond. One might feel that a 10% increase is great, but when you look at where we have been, it feels like a replacement bandage on the one that has been applied in the past. Healing is still taking place.

Please note the following breakdown and analysis of the 2017 lot sales numbers:

Sold prices ranged from $29K to $435K in Las Campanas, with 10 of the 20 lowest priced lot sales of the group of 194 sales. A total of 48 lots sold in Las Campanas.

Of all sales and in various price categories, please note:

91 sales below $100,000. 44 sales between $100K and $150K. 21 sales between 150K and $200K and 22 sales between $200K and $300K. There were 12 sales at or above $300K including one of a subdivision of 15 lots and one super premium lot in a highly desirable part of town that sold well above $1 million.   Average sold price= $142,429    Median sold price= $105,000

Compare to 2006:  561 lots were sold averaging $240K per lot (almost $100K higher than 2016 avg).

Thanks for visiting this blog site and do us all a favor: buy a lot today and build a new home on it. We need the activity and the inventory.  Happy 2017

Sending you our best wishes

…for a great year in 2017. May the numbers you visualize show up on time and may the results you desire come true. Ending 2016 with a solid number of sold homes over the prior 12 months, in excess of the 2000 level, is gratifying and it seems to prove we are on solid ground and not backsliding.

Your image of how you think our market should look is important. It seems we should be in agreement on the following statements. You may not agree, but then we don’t have to be in full agreement.

Interest rates are climbing and will continue to climb during the year. This always means a slight slowdown in buyers purchasing homes. The higher the rates go the more of a slowdown we can expect. It is simple mathematics, not voodoo or blind faith.

New construction seems to be picking up, helping with a dearth of inventory in the lower price ranges, taking pressure off the 40-year-old homes to satisfy the needs of today’s buyers of affordable dwellings. Proposed apartments seem to be quickly approved now also and that will also affect the lower priced inventory as people will have a bit more choice. Of course we hope they buy instead of rent. That is the standard Realtor belief: that everyone should be a homeowner.

The City of Santa Fe seems to be committed to providing high-speed internet access and updated airport facilities (maybe I am dreaming) which experts believe are sure-fire ways to stimulate economic development and entrepreneurial activity. When a business opens and stimulates everything around it (as Meow Wolf seems to be doing), economic development is no longer a mystery. Oh if only we could have ten copies of Meow Wolf please! Proximity is important in real estate. Walking distance is a growing asset in residential real estate. So is being near Meow Wolf, the Plaza and several other locations such as the Dale Ball Trails, shopping centers and schools.

The world of foreclosures and short sales seems to be on the tail end of a long and painful run, though we will still see homes show up in both categories this year. The top broker in unit sales in this market several years ago was a specialist in foreclosures. That is not the case today, but our recovery is still a work in progress. Witness that many homes are not yet worth what someone paid for them nine or ten years ago. When you want a bargain, do you look at foreclosures first? Those days are about over with. So many buyers came away with huge headaches from trying to buy a foreclosure. And of course nobody made a profit except the lawyers (bless them and everyone) and the people doing the winterizing and the repair work.

2017 is going to be a watershed year for many due to unknown future events that some are looking forward to and others are living in fear about. Will Obamacare be repealed, or replaced? Will inflation take off and throw a wrench into our economic gears? How will the Tweeter-in-Chief rule the country? How will his supporters and his detractors heal wounds and work together in this coming year? Will they be able to work together at all? Will our citizens feel safe or will the threat of terrorism grow? Will our forgotten youth and disadvantaged groups be included or excluded in our uniquely American future? Will Christians be able to reconcile their religious beliefs with their demands for making America great again? Is the gap between the haves and the have-nots going to grow or shrink? Does it matter to you? Should it matter to anyone? Is TRUTH an endangered species? Will the Cowboys win the Super Bowl? These important, and not so important questions will be answered this year, maybe.

Please plan a return visit to this blog site on January 10th if you are interested in the most recent monthly numbers plus the 12 month studies of how the Santa Fe residential real estate market is doing. I am working on the annual report of residential lot sales, a 4th quarter report for homes and the rolling 12 month recap, which is showing total sales above the number of 2000 homes. This has been a long time in the making. Can we maintain 2000 plus this year? With your help it can be done.