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.

Where are you going?

Predictions are risky and can be very embarrassing if you are wildly incorrect. But they are free to all comers. Anyone can predict the sky will fall or who will win the next election. There is not really a penalty for being wrong, is there? I will tell you where we are going if you promise not to remind me when later it is determined that I was wrong in my predictions. We have a deal?

Santa Fe real estate will continue to be a fairly good bargain when compared with many resort and historically significant cities in the Southwestern US. While Santa Fe residential real estate might be considered expensive compared to other NM cities, it is not at all like other NM cities, so direct comparison is not always helpful.

We will continue to have a shortage of newly built quality homes for sale while the dance of fiscally healthy home builders and construction lenders keeps spec home building artificially low. There may be barely enough inventory under $500K to keep abreast of demand, but so few new homes are being built in the upper price ranges that the choices for a buyer are limited to someone else’s idea of luxurious living. Or a ‘new to Santa Fe’ buyer could choose to build what they want, as many do after looking at the choices.

Water will still be a precious commodity for all of us anywhere near Santa Fe. This is true of the entire Colorado Plateau and east to Texas. We will experience ongoing drought conditions and water conservation will be more important than ever, as newcomers try to find their place in the City Different. Alternative energy sources will increase in usage and homes will increasingly be powered by sunlight. Geothermal and wind generated energy should also prosper. While our public electric utility tries to limit the acceptance of solar energy to replace their coal burning contracts, the public will demand it both for cost and the demonstrable effect on our climate.

This area will continue to struggle to convince its young people to stick around as the bling and glitter of big cities will still be a strong lure. Until we have free city-wide high-speed internet and more affordable housing for young adults, we will have a net loss of census numbers in our population of residents between 20 and 40. The effect of  the aging of our population will make the gap between the haves and the have-nots even wider. Born here all my life citizens will see more and more money flow into the community for the sole use of the wealthy second home buyers and residents that dip their toes in the water but do not become immersed in Santa Fe. They will bring it but not really spend it here. We will always have good choices for fine dining and luxury lodging for visitors yet Santa Feans with jobs will have to pay for parking and fail to get decent health care from most employers. Being the land of manana means it will not likely turn into a major conflict here, but the divide will be felt acutely by those getting by with less.

Your wait person at the next restaurant you dine at will still have a higher university degree and will continue to ask you if you are still working on that while you have your fork in your hand and a mouthful of food. There will be a public outcry about wait staff refilling water glasses without asking. Why don’t we just start paying 10 cents a glass, or maybe a quarter. No free refills.

Santa Fe will become a regional center for the admiration and worship of the Siberian Elm tree, a truly invasive weed/tree that sucks more water out of the earth than all the pinion and juniper combined. The shade these weeds provide will once again come up short when compared to the cost of loss of water in the ground and root damage to plumbing and pavement. The last person to agree to cut down such a tree on their property will also be the first person to call for the lowering of property taxes and better schools for youngsters. Confusion will reign as education about the value and importance of types of trees becomes mandatory for property owners. Flat roofs will continue to leak.

Our state will put a Democrat into the Governor’s office next time around. We are in a cycle and the current Gov, a Republican, is wrapping up her 2nd term so its time to change again. No matter who gets in, that person will get a second four-year term unless it is discovered that they hired immediate family members for important positions, who failed to disclose meetings with Texans in their paperwork.

The Aamodt (water rights) lawsuit will be settled someday, much to the distaste of everyone involved. Nobody will be happy about the terms and conditions of said settlement, yet life will go on and water restrictions will remain.

On a wider perspective, the EU seems to be in a pickle as its various member nations go through troublesome and confusing times. Many want isolation while others realize there is power and safety in alliances. It seems a macho/bully sort of demand for going it alone – making Bosnia great again – while denigrating every other country and ally. The soft/sensitive side of national leaders admit we cannot do it as islands; we need our connections and our friends to make everything great again. And what is the definition of great again exactly? A time when the old white guys had unlimited power and commanded everyone else’s life, or a time when we were all innocent and desperate standing in soup lines in the 1930s? What decade do you wish we could return to? In the 1950s I was young and naive. Life was good and I had a bicycle and rode it everywhere in a 10 mile radius of home. I knew where the candy counter was too.

In the 50 states, turmoil is the rule right now. Elected officials are getting hell from their constituents when they talk about voting for a health care bill that takes away care from many. The concept of national health care seems impossible yet it is carried out successfully in many countries with fewer resources. Bipartisan and fair for all; then figure it out. If controls on Pharma and the medical world are necessary, that is the price to pay to cover everyone. Or if you believe that those that cannot afford health care should do without, please track a suffering person without care and add up how the emergency room and numerous public services actually spend money caring for that person. Preventative work is almost always better than treating the sickness once it takes hold. And there is more…

The average American may or may not agree if we should stay in the Paris Accord (climate change fears) and carry the burden of moving swiftly and completely into a sustainable style of living. Yet we have strong evidence that a refocus on alternate energy and reusable materials can be economically viable. If Big Oil has power, we will utterly fail to take action until the best we can do is stay alive with filters and masks and be afraid to step out in public lest the lepers and zombies get close to us. Each person needs to ethically figure it out for themselves. If some are waiting for a voice to guide them, that voice is not yet on the scene. It will probably be someone who is only 9 years old today. When did you realize you are using more than your fair share? And why is that OK with the rest of us?

Caring for those in need is not mandatory in our current world. Yet choosing not to care for people who desperately need assistance is basically telling them to get lost; go off and die somewhere far away. I don’t think we are in a postapocalyptic world in which we need to be heavily armed against invaders who want to raid our food storage and steal our clean water. Are you hoarding gold? Will that feed your children? What fuels the paranoia dominating those that have plenty over those going without? What are they afraid of? The revolution that some fear will be much messier if it is made up of starving people fighting for food instead of those with full bellies that just want better education and free mass transit. Pick your battles, I suppose. Are some afraid that if everyone had plenty to eat and access to health care then the world would be out of balance?

In the future, blogs will be blogs and real estate will be real estate. You might own real property, build a shelter and stock it with two years worth of food and water. But then what cable channel will you watch when the two coasts are obliterated and the less populated states have the survivors? Wyoming and Montana have lots of empty spaces where bombs will not fall and disease and armed insurgents will never capture territory. And yet…    Who is going to do your yard work? Will you need to dry clean anything? Is Blue Apron still around? What do I do with my golf membership?

Predictions are risky and since no large wager of money is on the line, I can handle being wrong if it turns out that way. But I prefer to be right. Maybe you do also. It’s probably human nature to desire and hope that things turn out the way you want them to. What some people seem to want just scares the hell out of me. Should I get over it or speak up?