So many experts, so little consensus… If one agrees the phrase “All Real Estate is Local” is mostly true, then comparing
our market to other markets might reveal some disparities. Some think Santa Fe real estate’s recovery is lagging the rest of the country. What do you think?
Nationally, many areas have a shortage of inventory of homes, which feeds the concept of a seller’s market. In some cities, prices are rising again (like the good old days we may not want to return to?) and buyers are having to scramble to secure the home they want. A balanced market would be good, if only it were that easy.
What is happening here? There still seems a disconnect between seller’s ideas of value and ultimate sales prices agreed to. Plenty of examples exist of starting prices around 10% above final sales prices. What is concerning is the length of time those sellers take to realize they are not participating in the market conversation about their home. Then they lower the price and there is a flurry of buyer interest.
The delay between listing a home and selling it creates (at least) two statistics, one of which I feature in this blog. The Santa Fe Association of Realtors has a huge database with thousands of records of listings, sales, expired listings and so on. For our market area, there are some 101,000 different records. The focus of this blog is Absorption Rate, while our MLS database features Average Days on Market.
The differences are clear. For the 12 month period ending November 30, 2015, there were 1979 sales of homes in Santa Fe city and county. The MLS database will tell you the average days on market for all of those was 164 days. Yet an absorption rate analysis tells us that it is taking 7.8 months for all of those listings to sell. In “days speak”, that is about 234. And both are correct.
The gap between the two numbers has shrunk lately, for the good of all. But if the true absorption rate is understated by some 42% by the use of the database calculation labeled Days On Market, ask your real estate professional to give you the actual picture of where the market is. And where it is heading…
For more about this or any other residential real estate information for Santa Fe, NM please contact me, Alan Ball at 505-470-7153 or by email at AlanBall2@KW.com
(an updated post)