Our market area is awash with optimism as is normal this time of year. And for the fourth annual winter spring season there is much hope and bright expectations for the Santa Fe residential real estate market to finally take some new ground. One fellow professional even called 2012 the “year of the lot” as in lot sales. While that remains to be seen, many will expound at length, given the chance, at how much they are counting on this year being a big improvement over recent years. We do have some statistics that can seem encouraging if you are so inclined… Certain areas and neighborhoods seem to be getting healthy a little faster than others. This could be price point action or it could be embedded value and time-tested stability. A brief study of all single family homes within Santa Fe City limits shows an absorption rate of 12.7 months (this is a formula taking current inventory and comparing the most recent 12 months of sales to come up with a monthly rate of sales). In the County, that monthly rate of absorption is 13.9 months, so things are pretty consistent between the City and County. There is, however, brighter news coming out of two of our larger developments.
In the Eldorado area (MLS area 14 – not including Area 10 -the remainder of the 285 corridor), the monthly absorption rate is a resounding 6.5 months these days. That is about as low as any other area I can find and measure. And in the Rancho Viejo development, the monthly rate of absorption is running at about 9.3 months. Both of those are well below typical numbers. Before ordering the champagne, please take into account price ranges in those areas, typically under $500K in Eldorado and very similar in Rancho Viejo. That price range typically has a shorter absorption rate than the rest of our market.
By the end of this week, I will have posted more complete statistical data including results through the end of January 2012. A number I consistently publish is the absorption rate for homes up to $500K. I am personally interested to see what that number comes in at. At the end of December, it was sitting at slightly over 11 months. If it gets below 10, we might have something to write home about. Most people I talk with are ready for some good news.