Pushing uphill

We cannot just roll along but must push uphill in order to get into a home or to help a purchaser buy. The lack of inventory is scary and sales would see even higher numbers if more product were available to buy. New highs were set again last month: most sales above $1 million in any 12 month time frame, most sales between $500K and $1 million in any 12 month time frame, fastest average absorption rate for under $500K in our 15 plus years of tracking, etc.

The spreadsheets and charts here tell the story. We have a red hot market here and that is saying something after more than 10 years of recovery from the cliff we all sailed over in 2007 and 2008. Some markets recovered more quickly, mostly those with strong employment trends or legal marijuana such as areas of Colorado. Santa Fe does not have either of those factors (I cannot include service industry jobs at below living wage pay rates), but we do have Meow Wolf. It has been responsible for more economic growth than any single other thing that has taken place in the last 10 years. What can compare? The expansion of St. Vincent Hospital? New casino buildings?

The fact that Santa Fe was always a major art center helped a new venture like Meow Wolf succeed, we suppose. but maybe it was unique and original enough that it would have taken off no matter where it was located. But not Los Alamos or Las Vegas NM. And not Taos or Raton. Look at the value of Meow Wolf stock since it was first issued. Nothing like that exists in Santa Fe New Mexico.

Should we lament the crazy hot market conditions? Maybe yes if you are looking to buy as your options are severely limited. Sellers should be happy. If they are not happy they might have the wrong Realtor because if anything is true to day in the residential real estate market in Santa Fe, there is certainly a buyer for every house listed for sale. Personally a more balanced market can favor more people overall, providing a level ground for all to stand on. But markets are constantly changing. There is no perfect real estate market as it turns out.

Thank you for following along with my reporting about the City Different. We may lack some road crews fixing our potholes and repainting stripes, but we have plenty of people wanting to live here. We may lack transparency in government and social services, but if you can afford it, you can get almost anything you want here. We might not have enough opportunity for our young people to stay here after leaving school, but we have plenty of old folks that need medical attention and help with their computers. Can’t find a job? There are jobs; food service, retail, personal assistance to those in need. Sad though they might not be what you want.

Auld Lang Syne (in June?)

A song of goodbye and farewell, of happy trails, sayonara, adios, ciao… a song marking the end of a time and the grand hopes of the beginning of another time… Thank you Robert Burns. We have arrived at the end, the bitter end, of the deep and dark recession that has buried Santa Fe residential real estate under a mountain of confusion and blame. The economy is still mixed and other real estate markets are booming, but as of about noon today, the Santa Fe residential real estate market has passed the point of no return along the long and tedious road to recovery.

Whom are you blaming for the loss of hundreds of thousands of (on paper) equity you had in your home? Who is to blame for the nearly 10 years this excruciating period of business failures and personal losses has carried on?

Let us sing a song of farewell and goodbye to the bad old days and if we have to, lets sing it several times over and again to make sure we are rid of the negativity. For you intellectuals out there, here is the link to the Wikipedia entry: http://en.wikipedia.org/wiki/Auld_Lang_Syne

And what will the future hold? Will it be better next time? Will people stay safe and sane and not use their homes as ATMs and overextend with debt this time? Will mortgage loan sources keep their front offices in step with regulation and quality underwriting, or will the days of free money to anyone with a pulse return? Will contractors steeped in the Santa Fe customs and styles find a way to start building spec homes again (beyond the very short list of those now available under $500K)?

Seems hard to believe that a typical person could lose nearly their entire adult life’s worth of savings and investing because they had too much invested in real estate and not enough in government bonds. Bonds were always safe but boring; lower returns but more reliable. With everyone around making double-digit annual returns on their speculative ventures, it was quite difficult to stick with triple A rated and tax free securities. And so we didn’t. We bought rental property to expand our financial empire, we bought residential lots in popular subdivisions where growth was seemingly guaranteed, we took out a line of credit on the equity in our primary home to pay for an RV, a trip to Antarctica and a new SUV. Oh, and that dental surgery was not ¬†exactly free either.

In early July when the data from the first six months of this year is in and calculated, we will gladly confirm that the worst is over. There is still somewhat of a mess to clean up, still many homes “underwater” and even a few more foreclosures showing up to keep a lid on appreciation in the immediate surroundings. But thankfully we have survived and can now start scheming to prosper again instead of patching holes in our best plans.

The latest statistics have been posted on this blog and I welcome your taking the time to read them and understand them. The comment section has been disabled due to all the spam I was getting, but if you would like to comment, you can find me by email; look at the info on the home page.

Happy summer!