Greetings and best wishes. I hope your holidays were joyful and rewarding. How are those new year resolutions coming?
Most of the statistical reports I post here monthly have been now updated to include the full year of 2014. Probably the key figure is illustrative of what kind of year it was in Santa Fe residential real estate. The number of unit sales climbed by 3.8% from 2013 to 2014.
Pause for reflection, then let us enjoy the success while planning for a better year in 2015. Looking at actual figures, 1824 single family units sold in Santa Fe city and county in 2014, according to the MLS database of the Santa Fe Association of Realtors. That is 152 per month, or 35 a week. When you think it should have been a higher number, or wanted it to be a higher number, how many more per month or week should we expect? Some feel the market was flat for the last year. An increase of 3.8% is not flat but it is not a big step up either. It is the author’s belief that we are on solid footing moving forward and may expect to see actual appreciation in our home values in the next year or two. Currently one cannot count on appreciation as a reliable way to build equity. It may be the excess inventory, well above what experts would consider a balanced market of about a 6 month inventory.
The absorption rates have come into a better range lately due to an overdue decline in raw inventory of homes for sale. Even the $ million plus price range now has an absorption rate of 24 months, the lowest since the end of 2007. But even two months ago it was at 32 months. Maybe not as many new listings came on the market the last two months? Sales have been consistent at about 8 to 9 a month all year.
In all price ranges, the number of months to sell all inventory (based on current volume of sales) is below 9 months for the first time since 2006 and 2007. Fantastic news.
Lot sales are not as bright a light, even slipping a bit from ’13 to ’14. Many factors come into play, including probably hundreds of lots that could be purchased, but the owner does not have an active listing agreement that shows up in our MLS database. Are lot sales increasing but outside of the database (where an owner sells directly to a buyer without a Realtor involved)? There is no way to know that unless you parked at the County Clerk’s office every work day of the year and logged and studied each deed recordation to see what kind of property was sold.
What conclusions can be drawn? You should know many people think 2015 will be a much better year. Most of them thought 2012 would be better, and also thought 2013 would be better. They also were telling us the worst was over in 2009, a couple of years into the real estate downturn. (We are now seven years in).
Long term prospects for Santa Fe real estate look fantastic. We may not be the fastest growing community in the state, even though national pundits say we are one of the 10 fastest growing communities in the country. Santa Fe is not an employment center and very few jobs are created here. We are strong in tourism, all forms of the arts, state government and assorted lesser service industry jobs. Some of those careers can be high earning, such as the fields of law, medicine, finance or even real estate. The majority, however, are closer to minimum wage and offer little or no benefits such as employer paid health insurance and retirement plans. So why is the long-term prognosis good? We live in a beautiful setting with tons of outdoor recreational activities available, clean air is the norm and we are not subject to hurricanes, tornadoes, tsunamis and earthquakes. Traffic is light, people are friendly, the local food can be addictive and we have not yet been discovered by everyone. We just have to figure out where the clean water is going to come from to keep all the newcomers alive.
Nothing is promised, yet Santa Fe often makes the lists of favorite places to visit, to mountain bike, to get engaged, to get away… you name it. It is more expensive to live in Santa Fe than any other city in the state. But the weather is sublime and the light and sunsets are unmatched.
Some admired marketing slogans have included a phrase about dreaming about Santa Fe at night. I can’t help you sleep or dream, but I can be of great assistance if you are thinking of making a move in the real estate market in the greater Santa Fe area. And I will try to keep the nightmares to a minimum.
Thank you for making this blog the highest ranked source for Santa Fe residential real estate information.