Welcome to an update of the residential real estate market for Santa Fe city and county, circa early September, 2015. Mostly the news continues to show improvement in unit sales along with a gradual shrinkage of inventory edging the the market more into balance and creating urgency with buyers.
As is always true, the under $500K segment saw the large majority of sales and has the smallest average time on the market. Whether “affordable” or simply a good value, homes in our lowest price range usually go fairly quickly. There are geographical segments that are strong and others not so much, but overall any home in the lower ranges is going to be shown frequently and will likely appeal to a buyer or two.
As we move through the full recovery process, we will constantly see numbers that are the best or highest since the beginning of the real estate crisis, which morphed into a global economic crisis. A current example: total sales of homes above $1 million over the last 12 months – highest number since 2008. And there are numerous examples such as that. When you are climbing up again as we are now, you can measure these events frequently. Lowest inventory since ______, and so on.
But it is now September and those homes that have been for sale most of this year are starting to look a little stale. Take a look at any inventory in any price range and/or any neighborhood and track the asking prices. If you see several that have had price reductions, you can predict the seller’s motivation has increased and the threat of not selling going into fall and winter has created some concern. This is the time of year you will see more and more price reductions, with an eye toward capturing the buyer that is shopping now or in the next 2 months and that wants to purchase prior to the end of the year.
But sales do not stop through the winter. They just slow down a bit. For years we saw monthly sales of about 150 units during the busy season (summer and fall) while the numbers dropped to just below 100 through the slower seasons (winter and spring). This past month the unit sales total was 167 homes. Take a look in January and you will see its down, but sales are still happening through the winter.
Inventory numbers going down really help our market come into balance. As long as we had an overabundance of homes for sale, buyers were able to sit on the fence and wait for prices to soften. Now that our inventory has grown smaller, competition has to increase, by definition. Are we seeing competitive offers? Yes, on occasion a home is priced to sell quickly. Buyers and their brokers recognize that instantly and you might see multiple offers. But that is not commonplace at this time. Too many sellers are holding out for the big sale that will get them completely out of debt, or get them all the money they paid for the home originally. And yet that is still not guaranteed.
Thanks for stopping by and I hope your year continues to be happy and healthy.