There was a distinct change in mood recently among people in the various branches of the Santa Fe real estate tree. No, it wasn’t the holidays and the spirit of giving and thankfulness that changed the mood. When the rumor started that 30 year fixed rate mortgage money was available BELOW five (5) percent, everyone sat up and took notice. And it quickly created a flurry of refinance activity; wonderful for those homeowners that can benefit, and great for mortgage loan professionals. The question remains: will this have a positive influence on the buy/sell market? Will these historically low rates actually get hesitant buyers to start the process of buying? Well, please ask me in a couple months.
It will be a minor miracle (hey, we’ll take it!) if the buy/sell market in Santa Fe actually picks up during this winter season, but we are going to watch quite closely to see if we can discern any movement. The interest rates mentioned above will have an effect on some buyers of homes, mostly in the lower and middle price ranges. But the cash buyer is a frequent occurrence in Santa Fe, so low rates will not influence ALL prospective buyers. Let us hope it creates the motivation for some to decide that now is the time. The prices have finally gotten somewhat realistic, and as the attached spreadsheet shows, inventory of homes listed for sale is actually down a small percentage from last month. True, some of that could be attributable to sellers taking their homes off the market to remain living in them, or to lease them to tenants. Since volume of sales has not grown recently, but has remained somewhat flat, the logic is that some homes are no longer listed for sale and/or that they failed to sell.
The large inventory of homes listed is the primary barrier to a welcome and desired recovery of our real estate market. As the number comes down, whether thru sales or just homes taken off the market, the inventory count, balanced with actual sales transactions, will signify the health of our market. And we still have a long ways to go before we can say the worst is behind us. Can we now call this time the BOTTOM of the real estate crisis that we have documented has cost the local economy dearly? If this is not the bottom, it certainly feels like it. But it is much too soon to say. Ask me in a couple months, you say? Well, how about 3 months from now? What will we know then? First, we will have seen how long the low rates have lasted, plus we will know if the buy/sell market is beginning to rebound. But I believe we cannot know anything for at least several months yet.
This writer has been gathering volumes of information about the damages to our local economy caused by the real estate/financial/economic crisis that has become a world-wide problem. It is not just problems with foreclosures anymore, or builders that could not finish building a home or two. The damage reaches deep into the lives of nearly everyone. I plan to dedicate a future newsletter to just that subject, and I know there will be at least a thousand stories to be told. If you wish to share, feel free to reply with your thoughts, information or stories of how the local economy and its residents are being hurt by the worst financial crisis to hit in 75 years.
From the perspective of a humble title company manager, things do feel a little better, moods are a little warmer and spirits have climbed. There is a great deal of optimism out there among hopeful sellers of real estate and their real estate professionals. What we need is for a few buyers to come to the conclusion that waiting will not be in their best interests. You may have heard those car salesmen say on the radio “There may never be a better time to buy.” Funny thing, because for the next 30 to 120 days, that may be a true statement for Santa Fe real estate. You know that if you wait until this summer, sellers will already have seen other sales go thru and they will start thinking their house is worth more than they were asking. Don’t be the one that waits too long for the perfect deal. I happen to know that the perfect deals can be found on February 19th and again on March 16th. After that, you may have just missed the exactly correct time to buy. J Those dates line up with the stars, the moon, low interest rates and the Realtor’s scheduled showings. Take advantage!
Thank you for your supportive comments about this newsletter. I have continually been tempted to turn it into a soapbox, or at least a money maker, but it remains free of charge and somewhat free of opinion and dogma.