Remind me when the residential real estate market in Santa Fe NM has ever been as “hot” as it is today. Maybe my memory is failing, but we have never seen absorption rates this low (number of months to sell existing inventory) and I know of no other measure that is as accurate in describing the status of our market.
What this means is we are deep into a seller’s market, with buyers having little or no leverage when attempting to negotiate purchase price and terms with a seller. And when the market is one sided in status, it becomes predictable and numerous generalities can be applied.
As the history of this blog illustrates, the number of homes in the higher price ranges has gone up over the years while the number of homes in the lower price ranges have gone down. There is precious little inventory of homes available under $300K and one could say (without irony) that there is nothing to purchase for less than half a million…
These are tough times for someone wanting to own a home in the City Different unless they are well established with equity from another home they are selling or have a gob of cash (or borrowing power) available.
The other day, on a flight into ABQ, a person in my airplane row spoke of arriving to take a job in the hospitality industry, but had never been to New Mexico before and did not know where she would set up residence after a week plus of gratis lodging provided by her new employer. She did not know the average sales price of a home in our market is in excess of $525,000 or that residential rentals are rare and relatively expensive.
How do we lure the best and brightest adults to Santa Fe when what we really have to offer is housing for the wealthy and retired? Is our town going to become a cult location only suitable for those who can spend more on housing than 95% of everyone else? Will we still be a major art market and support starving artists here if they cannot afford to live in Santa Fe? Who will wash the dishes at our favorite restaurant and where will they live? And how will they get to work? Who is going to keep buying the homes that are for sale other than transplants and newcomers who are not put off by the prices they see here?
Daily one might meet someone wanting to put a freeze on growth in Santa Fe (build a wall around it I suppose) now that they are inside. Others welcome the diversity and cultural benefits to an open city that does not keep people out (although many still cannot afford it). I was a newcomer once (March 1983) and rarely felt like I wanted to live elsewhere. And yes, some would say I should never have arrived in the first place. For example, a brother of one of my closest friends believes it is people like me that have ruined Santa Fe. Turned it into a big ugly town instead of a small friendly town. Now choose to live 45 minutes South, in Placitas (which reminds me of much of rural Santa Fe) and feel perfectly at home.
In the last 15 years we have experienced a complete crash followed by a total rebuild of our market. Prices plummeted to well below replacement cost and then climbed back to where they are now; above anything we have seen before. That is just how its looking to me. You may have a different view.
Please imagine someone else tending to this blog by early next year as I focus on retirement and the enjoyment of middle age. It has been fun, a lot of work, caused some heartache and damaged some professional relationships. But it has been worth it and I am personally glad to have shared some of what I know to help you in your real estate activities.
Happy safe holidays!