That mesa is flat

Table tops show their tilt if you put a round object on them and things roll off in the same direction every time. Maybe one of the legs is short? Mesas look oh so level and flat from a distance and then up close you can see small rises and low points that make you wonder how your eyes deceived you earlier. But compared to any landscape in New Mexico, the mesas are pretty flat, you know?

Same description of our market behavior recently. The year is very nearly identical to last year and little time remains to expect large changes. In a good news bad news viewing, the upper end has seen an increase in units sold. And the middle price range I report on also has improved while seeing a drop in inventory. The general range of $500K to $1 million might offer a below average selection of inventory right now. At least it is not as bad as the selection under $500K and even under $300K where quality and volume of inventory is very limited.

This year has been a disappointment for many sellers. A recent tour of homes for sale with a buyer couple revealed some quality inventory that I was surprised to see still available; maybe because the number of buyers did not increase this year. There are some homes for sale now that should have sold 2-3 months ago. But apparently they did not sell as of yet due to the lack of growth in buyer traffic. Buyers can still locate what seem to be good deals in all price ranges if they are diligent and proactive. The lower the price the more competitive it might be so a buyer of a home below $500K is wise to have the ability to move quickly on an offer and have loan applications already processed. Sellers will sell to a buyer that needs a mortgage but they will want that buyer to be ready with their pre-qualification letter.

2016 was a year of many surprises, even with a flat market. And I am not going to start a conversation about the national election because I would certainly find someone who did not agree with me. The consensus seems to be: let us stay focused on real estate in this blog. If your take on our market is different from mine, you have the right to have a different opinion and I will defend your right to have a different conclusion about results than I might have. If you tell me I am wrong, I might not vote for you next time because I am a sensitive new-age guy after all.

Bless all of us as we approach the holiday season and remember there are many people less fortunate than the rest of us. Cold weather is difficult to bear without adequate shelter and nourishment. Be kind and be truthful and be thinking of ways to spend money on real estate soon or you might find a lump of coal in your stocking.

Mi Casa es Su Casa

Third quarter sales figures are in for the Santa Fe residential real estate market, and pardon us if they look almost exactly like the 2015 figures, because they are much the same. We are on the mesa top where it not only looks flat, it is flat. Compare one month, one quarter or an annual rolling total and you will see that our growth in sales units has leveled off to the point that there is no real growth.

Median home sale prices have inched upwards a bit. That can be good for sellers wanting a larger piece of pie leftover after the ravages of contract negotiations and objections. It can make it slightly more competitive for buyers, although that trend is not building any momentum. It is reality that flat is the new normal right now. Variations from a year ago are so small one can barely see change in progress.

But sales are still sales and we enjoyed them to the tune of more than 1950 sales in the most recent complete 12 month cycle. This reflects home sales in Santa Fe city and county. The additional areas our Realtor Association serves (Los Alamos, Espanola, Pecos, etc) includes additional sales adding about 10% to the numbers you will see in the Absorption Rate charts available within this blog site.

It’s a horse race, someone said

The race is on and the unpopular candidates have less than 60 days remaining to garner the required votes to move into the White House in January. Where will you be in January? Possibly enjoying a ski run or watching NFL playoff games cheering on the Clevelands? Or maybe escaping the winter cold and eating seafood on the beach in Mexico? Most of us will be working to provide a safe and warm home for our loved ones and wondering what the next POTUS will be like. Entertaining or scary? Stable or confused? Traditional or innovative? Seems like we really should vote so we can have a say in it.

Our local contest is to see if we can surpass 2015 in residential sales when the wrap is complete on 2016. So far, we can brag about the best single month (August) of unit sales in over 10 years. That is layered on top of zero change, year over year, for the first six months, giving us a splash of confidence with a few more months of results to come…

The monthly residential sales total of 222 units is the most in any single month since July 2006. We averaged 233 a month for the entire year of 2005, so our 2016 monthly average of units sold year to date seems pale when you realize it is only 165. One good month does not boost us enough to counter the flat year we are experiencing, but it is still fun to report we had our best month in over 10 years.

As about 75% of sales are concentrated below $500K, our average sales price has been hovering around $420K to $450K for the last 8 years. 2015 average sold price ($425,331) was still below 8 of the last 12 years.

None of this should be news to anyone paying attention. The trend lines have slowly evolved from an overheated real estate industry ten years ago (with aggressive liar loans and adjustable rates the norm) through a deep trough of pain and foreclosures to now a more stable yet still recovering market. We are not in Denver or Dallas, where sales are fast and sellers are happy. Santa Fe does not always follow national trends and while many experts will tell you home prices are going up and the rate of homeownership is on the rise, it is hard to reveal that exact status here, without facts in support. Yes, the lower price ranges are doing fairly well and they include most sales; so maybe we should be happy? Fact is, we saw the crash last decade as a correction of a real estate industry that was out of control; people buying homes that did not have verifiable incomes and/or a track record of credit. And they put very little money down, so when the going got tough, they had no real equity to work to protect. Today’s market has underlying strength. Nobody can get a loan if they don’t pass the test.

The Santa Fe residential real estate market is steady and predictable and that may be a good thing. Yes we have holes in our bucket and yet we have numerous reasons to think its a wonderful place to live. Many want to build a wall to keep it from growing further, while others readily admit their claim on the area is as tenuous as the wind and scarce as the rain. When you hear “born here all my life” do you chuckle at the grammar or recall that you might have changed someone else’s hometown in a way they do not appreciate? A newcomer makes it her town too. There is room for all of us and hopefully enough water. Now if we can get some victory gardens growing and balance our governmental budgets without such a high dependency on oil and gas, we can be said to be making progress. I am pretty sure the sun shines here almost every day. Or is progress something to fear and distrust? Should we move forward or return to another time when we were great? I can recall that I was great when I won a few swimming races as a child, and aced a few school tests in my teens. And I have progressed since then. Now I have a blog.

You don’t say

What is the background for putting a positive spin on things, even when the facts don’t indicate “things” are all that positive? Is it “the glass is half full” versus “the glass is half empty”? Possibly some folks keep beating the drum that everything is going up and growing and improving knowing they will be counterbalanced by someone else that counts the numbers and puts out a statistical report that shows an objective view. As you likely already know I am of the second school; putting numbers together that tell the story in facts and statistics instead of moods, desires and emotions. And yes I desire a growth in sales as much as anyone else. But wishing and hoping does not make it so. Maybe I could manifest progress by focusing my energy on having healthy shiny white teeth? Or channeling catching a huge fish next time.

We desire to see improvement, we want to get better, but what is going on? Why are sales numbers down in July of 2016 when we have had years of steady and solid growth coming out of the deep economic recession that began almost 10 years ago? July 2016 reports show 30 fewer home sales compared to the same month in 2015. The rolling 12 month count of home sales in all price ranges hit its lowest level in over 18 months. What is your take on the plateau we are on right now? Many blame the lack of inventory for the slower sales numbers. But how can we have 15 months of inventory in the 500K to 1 million segment and say there is a lack of inventory? Three out of four price range reports I publish here show a decrease in unit sales. And the inventory numbers since the 2012 year have been basically level, with slight variations up and down. We have almost exactly the same count of homes for sale in that price range now as we did in 2012 and 2013. Back then you will recall everyone said there was too much inventory. Now apparently their standards have changed and the same number now counts as too little.

The say what? …you don’t say aspect is: who is going to speak up when the market turns flat or turns downward? It is not the typical Realtor style to say the market is changing and slowing down. The usual gig is spouting a sales pitch that says things are getting better and you should get your house on the market now to take advantage. Or you should buy now before all the good homes are gone. Really? 368 listings in Sep 2013 and 371 listings now in August 2016? (between 500K and 1 million)…That is not even a 1% change per year for three years. What are people really saying when they say there is a lack of inventory? One of the first things I hear is it’s all old, shopworn and dated inventory that nobody wants to buy. That is not quite the same as saying there is a lack of inventory. You may be putting your own spin on things to claim the homes for sale are not worthy of your money; a subjective judgment about currently available homes.

What may be most rare is the correctly priced home that someone can afford to purchase & remodel with their final cost coming out fairly close to the newly created value, after the work was done and improvements were made. Plenty of examples exist of homes that are for sale and by most estimates, need substantial work to bring them into the 21st Century. Most buyers will not throw money at a home only to have it worth less than they put into it. For many years one could create equity by buying and remodeling, assuming it was done well and the improvements enhanced the home’s appeal and value. Maybe that is not that common in Santa Fe these days.

Does it matter what anyone says? What most matters is what people with money to spend on housing are doing. They are being quite selective and negotiating prices below asking price, for the most part. Buyers still have the balance of power on their side, except for the rare offering that is a beautiful home that is priced to sell from day one. How does one arrive at a price that fits that definition? “Priced to sell” is a groovy phrase with a good beat and you can dance to it. But where is the hit factory that comes up with these prices? Most Realtors can tell you the right dollar figure, but what is hard to understand is how they can take a hard look at today’s market and state with confidence that inventory is in short supply.

Is MAGIC or VOODOO required to know how to price a home? Not magic, but maybe a sober look at comparable sales with all subjective opinions left out of the formula. Can a seller truly think their home is the best one on the block only to have the proof show up in the resounding lack of interest when it’s listed for sale? Should a seller listen to their Realtor when they discuss the price? Maybe. Maybe not. Ask me for my designation of the two most comparable sales to your home and then tell me why yours is better. We can place a side bet on how the final sales price will be arrived at and what it will be.

Santa Fe residential real estate is a wonderful hobby, and for some a career with great potential. Many place themselves squarely in the forefront of knowledge and experience in terms of knowing our market. Some stand out and others muddle through. Get good, reliable and true information; ask your questions over and over. You don’t get to say if you don’t remember to ask.

A testimony to the numbers

Who goes there? Is that another home listed and sold in our MLS system I see reported today? In the last 24 hours, 16 homes have been reported as Sold in our database. 15 of them had some sort of price reduction during the listing term, or sold below asking price. Only one sold at the asking price, a home in Los Alamos that was below $125 per sq foot and likely did not need to go down any further. But the others showed a consistent trend of pricing strategy that has been the norm here for a long time.

First, a home is listed and the price is usually above what the seller and listing broker expect it to sell for. After a period of time on the market (anywhere from 3 weeks to maybe 3 months) a price reduction is often entered, increasing the pool of buyers. On occasion a second (or even a third) price reduction is entered before interest swells and offers start showing up. And then there may be the renegotiation from the inspection results, where the buyer attempts to get an even lower price based on itemized repairs and deferred maintenance issues.

In some of the 16 reported sold, the asking price remained static, but the final reported sales price was lower, meaning an offer was below asking and was eventually accepted, or the inspections (or other issues) led to an agreement to lower the price. Some may have required several counter offers to arrive at an agreement on price and terms.

If you are a buyer, or their broker, do you automatically see an asking price and know it will have to come down by the time it sells? Is it the norm to see price reductions and prices negotiated lower during the flurry of activity when a buyer wants to tie up a home and the seller wants to sell? Why is the original asking price almost always higher than the final sold price? Would it be prudent to put a home on the market at the price the seller wants to get instead of some price above the one they would settle for in a contract?

What is to be gained or lost by beginning the pricing at the most likely dollar value (what it will sell for) instead of padding the number so buyers can extract some small victory by getting a seller to agree to come down? Do most buyers expect to pay below asking price? I would say yes. Is that because their broker educates them to expect to get a price below asking when they are looking at inventory?  Probably true.

How will this change? Should it change? There are occasionally homes listed that draw immediate attention with multiple offers written and presented in the first week. Those are the exception. And that seems to be because sellers still have high hopes about what their home may sell for, combined with brokers unwillingness to stand firm on their pricing advice. The result may be a longer period of time on the market before a seller gets their net proceeds. And does the seller end up with more money? That is unlikely. It may mean the market is still shy about aggressive marketing and pricing; starting with prices IN the market instead of just going ON the market.

Is this even a problem? Not necessarily, but seller’s do want to sell and today is better than tomorrow. How do we find a way to recalculate our pricing strategies?

Would you want us to emulate Denver, for example, where anecdotal info about 15 offers on a newly listed property are the norm? Are they pricing their homes too low? Maybe. Or is their inventory truly a very tiny portion of the demand for housing. Some buyers in Denver have been trying to buy for a year or more, with no success. They may be careful not to overpay, want inspections and perform due diligence when trying to purchase; so the pushy buyers get in front of them and again they lose out.

I for one would not want our market to look like that. The problem with an overheated market is that it has nowhere to go but down (to cool off). A balanced and steady market, while possibly unremarkable, is preferable because there is time to examine all the details and make wise decisions rather than rushing into something without knowing what you are buying. Could our market improve? Does YES seem like the right answer to that question?

And until we have some more sawdust flying and more building permits requested, there is very little new inventory to pressure resale sellers into pricing their home to sell. The day may arrive soon where one can build a new home and be in the same range of size and quality that they could find in the resale market. Everyone says there is no inventory, or a shortage of inventory. My reply to that is that there is plenty of inventory, but quality product is limited and the mostly average and dated offerings get passed over by so many buyer prospects, they end up saying “there is nothing to buy in my price range”.

How to explain an Absorption Rate of over nine months (the average amount of time it will take to sell all existing inventory in all price ranges)? Does that seem like a shortage of inventory? It is over 27 months for the $1 million plus homes. If you cannot find a home you love within those numbers, building a new home might be the answer you are looking for. What is the definition of a seller’s market? And of a buyer’s market? Based on commonly accepted numbers, a 6 month Absorption Rate is a “balanced” market. Since we are in excess of nine months, that seems like it’s a buyer’s market still, after years of improvement and recovery. It is still the buyer that has the upper hand in negotiations due to the choices they have. The exception may be only in the lower price ranges where a buyer has less to choose from (and the rate of absorption for under $500K is around six months. It is even less below $300K.

We have entered the peak season for our market and now welcome many thousands of visitors to The City Different, some of whom will shop for homes. Let us hope August and September show the results of hard work and pricing that will attract offers and buyers. Then we might end the year with some improvement and keep the momentum of getting stronger. I’m all for that.

Looking for the better half

Half a year does not a full year make, someone said. In the example of Santa Fe area residential real estate, the first half of a year is usually slightly below what the second half comes in at, because of more active summer and fall months. Let us plan on a stronger second half of 2016 since the first half was uninspiring. We could not even surpass the same six months from last year.

The various spreadsheets and charts available to you on this blogsite show the current sluggish nature of our sales market. Many seem to know the reason for the lack of zest and the flat results we are reporting this year compared to last year. Inventory of homes for sale is a factor. Interest rates are not a factor. A serious lack of new construction (above $350K) is a factor. Some might say the struggling economy and lack of new jobs in New Mexico is a factor. I also suspect there is lingering confusion about what Santa Fe residential real estate is “supposed” to look like.

For a few, separating wants and needs is important. We might all want to have a strong real estate market, but what will it take to get us into that mode? Do we need a bunch of new housing to be built? Do we need sellers to put their homes on the market to build up inventory so that buyers have more to choose from? After years when sellers tried to sell and consistently failed, for a long list of reasons, its likely difficult to believe that now is the time to sell. Some have been burned so often they don’t know whom to trust. You probably remember the days when everyone was trying to “call the bottom” of our market (or the national real estate scene). Now it seems everyone is trying to call the middle. We are at a crossroads of steady sales and shrinking inventory, so it cannot be a surprise that sales numbers are flat.

Look at June over the last 9 years (on the Monthly Sales chart). We dipped to as low as 113 homes sold in that month (2009) to as high as 202 homes sold (2015) but now this year we dropped back to 188 sold. That is a 7% drop last year to this year. Look at inventory as of June 30, 2015 versus June 30, 2016 (on All Price Ranges chart). Exact same number of sales for the rolling 12 month total (1944) and inventory is down only by 9 units (1489 to 1480). Does that feel flat to you? What is your proposed remedy? Do we even need a remedy, or are we in a Goldilocks zone with a good balance between sellers and buyers? Are some people hoping for a crazy hot market where homes are selling as soon as they are listed? Is that the answer to anything, other than sellers impatience? Buyers struggle with making offers on homes they cannot negotiate on, feeling forced to buy without careful inspections and the usual contingencies. The market where there are multiple offers is not sustainable, by definition. Sure, some will sell fast and even for more than full price. What about when those homes are gone? I don’t want that kind of market here, personally. Maybe its the Libra in me that prefers balance.

Is a flat market good? I don’t plan to offer a value judgment on our market conditions. I do think the sharp ups and downs of a volatile market hurt more than they help.

What will the second half produce? We remain optimistic for a stronger July thru December (as befits our understanding of historical results) and know that there is no place like home.

If you would like assistance and professional involvement in your real estate transaction, please feel free to contact me anytime. I am happy to consult with you about your real estate assets and how you might best manage them now and in the future.  Thank you.

We should be so lucky

The best references to luck seem to always include references to hard work, and being in the right place at the right time. If I get lucky in my real estate career, it is likely because I prepared and put in the hours of work plus got my ass off the couch. Yes, I could get lucky on my couch, but that is not the kind of luck that has anything to do with careers or real estate, or business. If I am lucky, I can grab a short nap some afternoon when I am a bit tired. That would be my luck, away from real estate.

We all got lucky when New Mexico became a state, as did 49 other states and a couple of territories such as Washington DC and Puerto Rico. There may be others that I don’t recall. But we are quite fortunate to be able to be residents of the already great United States of America. We get to vote (our state’s primary was yesterday) and pay taxes (you might have to disclose how much you make if you want to be President). We can travel freely all over the place (unless you want to use commercial air travel in which case plan on some waiting and frisking). Our National Park system is a fantastic asset and resource and I keep fining new ways to visit Parks I have not seen before. How about the ease of finding goods and services? Can you ever say you could not find a loaf of bread anywhere, or emergency medical care, or a new smart phone?

Cost of those goods or services might be higher than you would prefer to pay, but better to at least have access than be told there is no bread, no medical care, no new smart phones to pick from.

How about real estate? The cost of real estate in the Santa Fe market area is a big pill to swallow for some folks in other parts of the state, or those considering relocating from other areas of the country. The average sales price in our market (Santa Fe city and county) over the last year was $432,000 while the median price was below $340,000. Some people relocate here and downsize (kids are grown and gone) but end up paying more for their home here than the larger and maybe newer one they lived in prior to moving to Santa Fe. And also despite the cries of low inventory, there are plenty of homes to choose from. Imagine there being no inventory. Rental and leasing inventories are shockingly low, but homes, condos and townhouses are plentiful. Whenever I show homes to potential buyers, there are many homes to look at prior to the list being narrowed to the ones that most interest them. Is inventory down? Yes. Is it so low that a buyer cannot find a home to buy? No. Is inventory so low that our market is heating up? Take a look and tell me what you think. Sales totals are not climbing, so how can it be a hotter market than last year?

What about sales? You know there are detailed spreadsheets available for your review listed on the left side of this site’s home page. You may be able to scroll to see them now, or take a look after reading this post, but the facts are presented and I trust they are easy to comprehend. The one word answer to your question about home sales is FLAT. Home sales are virtually flat for this first 5 months of this year versus the same period last year. In fact there were 17 fewer homes sold so far this year compared to 2015. What those spreadsheets will show you is the overall average of time it takes for all homes listed for sale to actually sell if in excess of 8 months. It was over 9 months last year this time. The rate of sales is quite similar but the inventory came down a little bit. Therefore the change in calculation.

We celebrate the many years of hard work that got us to today. When you look back at 2008, the absorption rate for all homes was in excess of 15 months! Times have changed and for the better. But if we want to get lucky, we might have to work even harder, and get off the couch! If you would like my professional and honest assistance in your real estate business dealings, please feel free to contact me anytime. The market is so much better than 8 years ago, but we still have plenty of room for improvement. And you can be the beneficiary of my many years of experience and accumulated knowledge.

Fresh numbers that show we are working on it

That may be a lame title…we are working on it? You may decide how lame, but the point is that if your head is buried in something like sand, or paperwork, or personal problems, or worldly problems such as our POTUS election cycle and the sick drama it features, you might not know that we continue to climb the charts and continue to improve on our real estate market numbers. That’s a long sentence, but it says we are doing well enough to write about, just not as well as our neighboring states and what our bankers and creditors would want to see.

We still are selling foreclosures, pre-foreclosures, short sales and homes that are selling below what the owner paid years ago (underwater defines homes where the debt is greater than the value). Who knew that some nine years after the bubble started to burst that we would be still up to our necks in problems? If you knew then, what would you have done differently?

Asset managers still have a death grip on humorless communication as they try to unload stuff they should never have made loans on in the first place. Whether you blame the lenders for the mess we are still repairing, or blame the “political system” for the agenda and candidates facing off this November, we made the world we live in. Investors and stockholders wanted higher returns from those banks and mortgage companies (to support lavish lifestyles maybe) so they pressed for more loans to be made, more creatively and more more more such that every American could be a homeowner. Never mind that many had no nickel to rub against a second nickel, to coin a phrase. Many should not have been home owners since they had no reliable or steady income, no track record of responsible financial behavior, no savings in case of illness or a layoff. Yet we loaned them the money anyway.

Try selling a home in Chimayo or Pecos or La Mesilla or Madrid that has a debt well above the home’s value today. What do you do? Give it away? Discount it in a short sale and leave the lender with a deficit? Back to the election, what do you do when your choices are thin? Do you go with a third-party? Do you bite your hand when you pull the voting lever and pray that our America does not crumble as so many on all sides would have us believe? Do you start shopping for a home in Canada? Probably the best answer to these and similar questions is that you get to work. Yes you. Get busy fixing the world you live in. Get busy fixing the economy and the real estate market. If you want to super charge our relatively flat real estate market conditions, try bringing an additional 15 home buyers into the picture each month. But make sure they have income and good credit and maybe a years worth of payments in the bank. Try selling that 30 year old home that is priced as if the floors are gold leaf and the cabinetry is silver plated. The point is to sell homes to people who will nest there, keep them in good shape and build memories and lives in that home. The point is not to make some bankers and lenders extra money so they can buy another car and take an island vacation while we wait for trickle down. How was your trickle down?

Whats up with our market today? True that inventory is way down, keeps going down in fact, although we are now entering the typical spring season run-up of new inventory. It’s not “new”, by the way. These are older homes that did not sell last year. They are homes the owner stayed in or leased out after realizing they could not sell them a few years ago. Many people said to me and said to themselves back in 2008 thru 2012 that they would wait for the market to improve. They would wait for the market to catch up to their home’s true value and then sell it when they could get all of their money back. There is a special place at the back of the diploma line for those folks. Realistic expectations never landed in their laps and the market did not magically return to those days of liar loans and no doc packages that put people into homes they had no business owning, or living in. We learned that lesson. Why would someone wait for our market to return to the days of home sales that was completely unsupported by facts and real numbers?

We have seen about 10 homes a month sell in the One Million plus range for many months now. Let us home we can see that number grow in the next year or two since we have several hundred plus homes listed publicly for sale in that higher price range. A great target would be 12 or 13 a month! At the other end, below $500K and even more so below $300K, homes sell quickly and without much fuss. Buyers in those price ranges usually want and need to buy and would love to get settled soon; while sellers usually have little choice but to sell; the opposite of the high-end transactions. Try talking a seller of a $1.8 million dollar home into selling at a deep discount when their other two homes are in different time zones and are highly sought after prizes. It’s difficult to accept that their beautiful Northern NM gem is not worth what they paid for it a decade years ago.

Help yourself to the numbers in the various spreadsheets and charts available on this website and blog. They are for your enjoyment and education. They are not perfect, nor is the blogger, but we try to be fair and even-handed, never playing favorites or grinding our own axe when its yours that needs sharpening.

So sharpen away and feel free to share this information with real estate players in all price ranges. There is always something to be gained by reading and understanding.

If you need assistance, I know someone that can help you buy or sell. Or both. Contact the author.

Thank you.

How do you recognize Cinco de Mayo?

Given the standard evolution of “holidays” into excuses to take off work or celebrate with adult beverages, this one gives people one more reason to smile and raise a toast. The actual day and event that started it is from deep into Old Mexico’s history as the entry from Wikipedia shows:  https://en.wikipedia.org/wiki/Cinco_de_Mayo

…not to be confused with Mexico’s Independence Day celebrated in September, the Fifth of May commemorates the Mexican Army’s victory over French troops at a battle dating back to 1862. Meanwhile in retail establishments where liquor is served, plan on tequila specials and cerveza specials and party hats and mariachi bands. And don’t forget to hydrate while you celebrate.

Real Estate? Yes, it is still the primary focus of this blog site and I do have a bit of information to share. We know inventory continues to shrink in our market, after years of slowly improving growth in sales and precious few newly built homes coming available. Today we are finally below a 6 month supply in the under $500K category, while in all price ranges the average is a bit above seven months. You see, most sales are under that level of $500K so that range of activity dominates the overall market picture.

For us to be in the seven plus month range is a wonderful place to be after years of being above 10 months, even climbing as high as 18 months toward the end of 2009. Remember those days? It seemed as if nothing was selling, even though there were sales; just not what we were used to. By comparison, monthly sales in late 2009 were approximately 100 units. Today its above 160 units a month, but still not near the hot and heavy days of 2004 thru 2006 when it was well above 200 units a month.

The Santa Fe residential real estate market is languishing in a fairly steady place; steady sales and steady demand. You could say we are going steady. We are not setting any records or rewriting history with current market performance. Most of the ingredients for continued success are in place: mortgage rates are still quite low, home prices have not begun to rise at all except for the very lowest ranges, property taxes are amazingly low here, our climate is almost perfect and a resourceful person can find so many things to do and see and experience here that it feels like you are always on vacation.

I have previously written about how all the surrounding states are seeing much stronger economic results and higher growth rates. There are many reasons for that. Why is New Mexico in the middle of a dynamic region of the USA and not seeing the same success as AZ, TX, UT and CO? Do we really discourage economic development here? Is our population really so ill-trained as to not appeal to potential corporate relocation executives? Can Santa Fe make its unique style and flavor be more appealing to younger and smarter millennials and channel their energy into a rosy future for the City Different?

Orange hair and First Quarter results

We all get a kick out of other people on occasion; their words, their appearance, their car driving blunders, etc. But rarely do we get to focus on their character and true being, as that is not often available for us to see. We can chuckle and we can criticize knowing that we do not really know what makes that person tick or what their motivation is for doing what they are doing.

So we watch and listen, sometimes in shock and at times in awe of their talent or lack thereof. You Tube has some funny clips in the style of Funny Home Videos if you are bored. But how can you be bored when our serious news outlets show the childish behavior of literally all of our POTUS candidates (except for your favorite who is TOTALLY above the fray), quoting the sounds and words of their desperate efforts to win over voters while the truth be damned!

You would think becoming Prez of the great US of A is a windfall of money and fame, a lifetime salary and health insurance second to none and a free ticket to every symphony concert and rock festival forever. Which it kind of is. Lets not even factor in the “speaking” fees paid to former Presidents. That money will take you anywhere you want to travel with plenty left over for sushi or Chateaubriand.

First Quarter residential sales and inventory numbers are posted in the Absorption Rates charts accessible in the margin of this blog site. This information is being published 48 hours earlier than usual, to get the information off my desk and to get it into your next listing presentation. Sales are barely keeping pace with the same period last year. Home sales have felt a bit softer of late and these results prove it. Another source some try to measure is pending contracts, which our local Association says are much lower than this same period last year. Second Quarter better or worse?

It is not the increase in inventory that is making our progress look flat; it is the lack of sales. Lack of new and quality inventory will continue that trend of slower sales as people will not want to spend their hard-earned money on average or below quality homes in less than average locations. Many industry folks are calling for more spec homes to give buyers something to choose from. That product line is growing, but not very fast. Years of buyers skimming the available homes for amazing bargains have depleted the number that can be bought for well below appraisal or well below replacement cost. About the time our typical, average, median home sells for replacement cost, we will see new homes built in larger numbers and inventory will improve for buyers. Meanwhile we work with what we have.

When I meet with a seller prospect, they are often disappointed that they still cannot get more for their home than they paid in years past. Will that change anytime soon?

Rates are still quite attractive. Maybe all the real buyers have already bought something and we are awaiting another busload of customers to show up from other states where money is flowing and jobs are growing? Ten years ago we created buyers out of nothing. They did not know they could afford to buy a home until it was shown to them that anyone could get a mortgage. And they really could NOT afford to buy a home even though many did, with the help of some fast talking professionals, many of whom are now long gone.

How many people can buy a second home? Not everyone, certainly. An economist I follow (Dr. Ted Jones) shows that second home purchases have fallen off. Santa Fe depends on those transactions to grow its real estate numbers. If we did not have second home buyers, we would not have much of a real estate market above $500K. What if we had a real estate market that refused to grow? Where would you be?

After years of steady and boring and slow growth while we solidify our recovery here, sooner or later we had to plateau and maybe that time has come. Maybe 2016 will be a flat year? Sales do pick up in summer and fall, but can we match the growth year over year? Tune in next month for another chapter in the continuing saga of the Santa Fe residential real estate recovery mini-series. Starring that person over there as the seller and old whats his name as the buyer, with a cast of thousands hanging on every signature on every contract.

Early April is not the time to bemoan the type of year we will have because we simply do not know what is to come. It would be a good idea to take a deep breath and get to work to do your own part so the year turns out the way you want it to. Each of us has to put our shoulder to the wheel, as some have eloquently said.

The other day I went to Facebook for an update of what is happening in the world. I landed some great and easy recipes and some funny videos of cats, plus some inspirational words and some trash talk about politics and how the other guy is an idiot. Business as usual it seems. Then to Twitter for a quick flash of news: Merle Haggard, Patty Duke, a bombing in a Syrian neighborhood, the Fukushima half-life of hell, the guy that broke up the Beatles, Hulk Hogan in tears, etc. What a wonderful world we live in. Sometimes it feels great to be away from the leading edge of societal changes here in our little towns and villages of Northern New Mexico. Don’t forget to VOTE in the NM primary and again this November in the big one!! We will know what kind of year it is in residential real estate by then.