Same song, different verse

Take a quick look at the most recently updated statistics on this blog site and tell me, honestly, if you think sales units would be down if there was a selection of homes for buyers looking under $500,000. Go ahead, I’ll wait.

It is not pleasant to report that sales are down, but they are. They are down because there are precious few homes for sale for qualified buyers under that half million price point. That happens to be the price range threshold I use to set up my reports: Under 500K, then 500K to 1.0 million etc… If one wanted to search more narrowly, say between 300K and 400K, the numbers could be striking and actually sad.

There are plenty of market forces at work in Santa Fe residential real estate, including the dimensional shift into higher priced homes. Take for example the First Quarter Sales report attached and available for you to view by clicking in the margin. In the 15 years of reporting, home sales above $1 million have risen from single digits for the quarter, to five and six times that lately. This shows the effect of appreciation and the ever-increasing average and median home sales prices. Another way to view the shift is comparing the average sales price for a home in Santa Fe city and county for the two years 2001 and 2018… $295,674 then and $493,715 for 2018.

This is graphic evidence that the increasing average prices continue to hurt the first time home buyer and lay waste to reasonable market conditions in that lowest price range of under $500K.

How about comparing the # of months of inventory, on average, that our market offers to potential buyers, say as recently as 2009 compared to 2019. Then it was in excess of 13 months to sell a home; now it is barely over 2 months. do you think we could sell another 100 homes a year in that lower price range? How about another 250 homes? I suspect yes we could as there seems to be demand sufficient to accomplish that increase.

All is not lost for home buyers in Santa Fe. Their choices are limited and some say the quality inventory is gone in a flash, so one must be ready to move quickly with a solid written offer and be prepared to compete with other buyers.

I remember a time when a buyer customer I was showing homes to was upset because a new listing popped up overnight and I did not know about it to arrange for her to see it. Never mind that the market was much more saturated then and it would likely have been on the market for several months. It was not even a finished home so a large portion of the buyers eligible or interested would not have been able to secure a mortgage on an unfinished home. This buyer could due to the family trust having the ability to set him/her up with mortgage debt he/she automatically qualified for due to last name, DNA and being in good standing with the estate attorney in charge. Lucky me I was able to help with the sale. Lucky buyer that the home could be shown the first day it was on the market. We were the first to see it and of course the first to submit an offer.

Your favorite blogger will return soon with more analysis of what is going on in Santa Fe real estate. Stay woke!

How can it be so thin?

Just how can the capital city of New Mexico, with somewhere above 75,000 residents plus a bunch of part timers, be so short of inventory in homes available for sale? What do buyers do when they want to buy a home in Santa Fe? First, they watch to learn how the market is behaving. They pay attention to listings, studying how long they stay available before they are grabbed up by a motivated and qualified buyer. All of the widely used web sites that show residential listings – Realtor.com – Zillow – Trulia – and many more – show accurate listing data and when those homes go under contract, they often drop off the web site. That is your clue that home is no longer for sale (provided the contract holds up and it goes to closing).

So its fairly easy to track homes for sale if you are not ready and able to drive around town all day checking on for sale signs. What do you learn when you are shopping for a home below $500,000? (that is the low range in my posted and updated charts and spreadsheets available on the left margin). You see that there are many more homes sold in a year than there are available at any moment. This means that the absorption rate for homes under $500,000 is well below 12 months, on average. By the way, 6 months is considered a “balanced” market, between sellers and buyers. The calculation at the beginning of March was a mere 268 homes listed in Santa Fe city and county, while the current rate of sales is about 131 homes sold per month. That means in barely over two months, the entire existing inventory of homes will be sold.

It does not pay to be picky if you are a buyer ready to buy in this price range. Be prepared to act quickly and have a Realtor on call that can have your offer submitted in an hour or two.

Another point we might see more of is that listing brokers with Seller support may price a home knowing it will generate multiple offers and the status might change to pending on the listing in the first few days. Maybe the days of pricing a home a little above what it is likely to sell for are gone. Maybe better in this market to put a price on a home that is a “best guess” of what it will sell for and let the buyer’s brokers fight over whose customer is the most motivated to buy that home.

An issue with that approach is that Sellers must have put priority status on any repairs and cosmetic improvements. The new pending price has a better chance of surviving through the escrow period, when Buyers are trying to whittle down the price due to inspection issues. Sellers are well advised to get a pre-listing inspection and actually deal with the problems that report might identify.

And so, with thin inventory at critical low levels in the lowest price ranges, Santa Fe, the city different, extends its reputation as being unaffordable for most people. Money to put down? Good credit? You also need luck and excellent timing to buy a home in Santa Fe. Residential real estate deals are for the willing and the able.

Stop making sense (when did you…?)

Interest rates are inching upwards, slowly but surely. Rate monitors say long-term residential mortgage rates have gone up about ONE percent over the last 12 months and another ONE percent is forecast for the next 12 months. What does that mean? It means that more and more people will be priced out of buying the home they might want. The home they could have bought last year will not be available to them next year. So waiting was not a good idea after all? Each person is different, so what you did with your money while you waited for the right time to buy a home is your business. Maybe you made a small fortune in the stock market? Congrats to you! Maybe you invested in your own business to further secure its long-term success; necessary before you splurged on that new home?

There are plenty of good reasons for almost any action you take when it comes to real estate. And it is incorrect to posit that all people are subject to the same rules and market conditions equally. But if you are on track to purchase (with a mortgage) a home about a year from now, you might be looking at fewer choices and a smaller or “lesser” home than you thought you would be buying. Should you jump now and get what you can get before that new one percent takes hold? Maybe. Call me to explore what is out there.

Rates are still at historically low levels. If you are quoted 4.75% to 5.25% right now, that is much better than most of the last 40 years. It’s just the last 8-10 years, when rates hit bottom to assist in getting our economy back up and running, that you could get a lower rate. Those days of crazy low rates are gone now. I recall back in 1979 being told the going rate for a home improvement loan was over 18%. Yes, I know, your credit card rate is likely higher and I hope to heck you pay it off monthly! But home improvement loans can run for 10 or 15 years.

Meanwhile, the Santa Fe residential real estate market is healthy going into the winter. Many assume homes don’t sell in the winter, but they do sell. In relative terms, winter will see 120 to 140 home sales a month while summer will see 200 to 240 unit sales. There is no wrong time to list your home. And allow me to be a broken record: inventory is low and dangerously low in the mid and lower price ranges. Even the million plus range has less inventory compared to demand than has been the case in many many years. That makes it a sellers market overall, with occasional geographic exceptions and anomalies.

What else is going on?

IMHO, logic and reason can sometimes modify gravity, hold back the floods, temper the wildfires and heal the sick, but they cannot explain some of the current events in this great country. Allow me to wonder when exactly America used to be great and how we lost our way. And leave it to you to speculate when we should go back to (in years, maybe the mid ’50’s – a time of innocence for baby boomers?).

Do you want to return to any particular year or decade? Was that time long before the Civil Rights laws and the efforts by some to give people of color a chance at living in America without having to live with widespread racism and persecution?  Was there a time of economic prosperity that lifted everyone equally, when almost nobody went hungry or without shelter? Is the time you want to return to when your family and friends had everything and the hell with everyone else? Were you slave owners or something? Is your happiness dependent upon others suffering? Go ahead, take a look at what you say you want. I’ll wait.

Personally I would rather move forward and make progress on many issues rather than go back to another time with different conditions for living in America.

Our country is in the hands of people who do not have my or your best interests at heart. They solely have their own interests in focus and the rest of us can go eat worms. With just a touch of curiosity you can learn of the deep damage being done today to humanitarian efforts and systems that are the only safety net for so many that do not have food and shelter. Our national parks are being ignored and underfunded, selling drilling rights where sacred ground and wilderness should prevail. Health insurance is quickly becoming something for the few, not even the majority, not to mention the need everyone has for some level of health care. Corporations are raping and pillaging our environment in the name of stockholder returns and preventing true progress in alternative fuels and care for the earth we must live on.

The recent mid-term elections seemed to prove, among other things, that now more than ever we must put women in leadership and control. They are going to be in charge sooner or later. I hope it is soon enough to allow them to correct the course we are on, because it needs serious correction. Leaving the fate of our future in the hands of old white males seems suicidal. As a group they seem bent on the destruction of morality and the abandonment of progress, although I am sure there are some fine people on both sides! Both sides of what?

What is your worry when you go to bed at night? What keeps you awake? I observe the downward trends in civility and honesty among those that live and work together, yet might not always agree on things. I worry about drunk drivers and careless texting while driving, putting me at risk of being terminated by an event I cannot control. I am sorry so many fail to take care of themselves as they age and sad for those that were unable (or unwilling) to save money for their old age years. Who will pay for their care?

As people age they need more help in simply living and the oldest need the most help in the current system of societal care for elderly. If we are too old to work and are not employable, what are we contributing to our world? Are we caring for grandchildren and providing love and nurture to those less fortunate; to those in great need? Or are we watching TV all day and grumbling about the dog shit left in our front yard and the lack of money for infrastructure leaving potholes to grow larger? What is bothering you?

Thanks for staying in front of your screen and I hope to have helped trigger some thinking and some reflection on what sometimes is forgotten. Now go buy a house!

RECOUNT!!

I guess anyone might demand a recount if they really want to. But its clear only those on the short end of vote counts ever want a recount. You COULD demand a recount for home sales in Santa Fe year to date or you could just bite your lip and accept my numbers. They are not perfectly accurate, never were intended to be, but they are a consistent measurement of where residential real estate sales are going and where we have been. We are in such an improved market over the wretched one of the last 10 years that it would be easy to relax and assume all is well forever. Not so fast on the casual attitude!

This year’s now completed 10 months of sales is running at 7.8% more unit sales above last years first 10 months. We will likely end the year in similar shape; great improvement and manageable growth. But what are we going to do about the lack of inventory? To have an absorption rate below 3 months in the under $500K price range is crazy because it does not favor the buyer in any way. So the pressure to keep raising prices up from the bottom just makes everything less affordable for the first time home buyers and those with little or no down payment. And if the people that live and work here cannot afford to live here, do we have to build more highways so they can commute from El Rito or Golden?  Or Belen?

We are thankful for the snowfall today and hope El Nino kicks in some much needed snowpack to extend our claim on this high desert. Without water to drink and wash our dinner plates, how can we keep growing and prospering? Some would say we are already growing faster than we should. IF we had more homes under say $350K we would increase our growth rate exponentially. I am personally not sure what is right or wrong about growth. You be the judge. But not having affordable housing in the greater Santa Fe area cannot be right for realistic human needs.

Thanks for voting and I hope you got whom you wanted. Make it a habit to vote anytime there is an election. And maybe get some people elected that will take action on the rapid destruction of our planet and our habitat. New Mexico could be a leader in alternative energy and if we make it a priority, it will serve us well with new jobs and all that follows. While you are at it, take the Roadrunner sometimes, just to save some petrol and some ozone. Or take the bus or ride your bike instead of starting your car. Please.

Happy and warm holiday wishes to all.

Steady as you go

I am pleased to share updated statistics about the Santa Fe residential real estate market in this autumn season of 2018. You will find several spreadsheets and reports available for viewing (and printing) on the left side of each of the blog pages you wish to view.

Please note the consistency of finding out that the Third Quarter 2018 sales matched the same Quarter from 2017. When I crunched the numbers I was amazed that we had exactly as many sales this year (over the last 3 months) as we did last year. But do take a look at the 3rd Quarter report because it clearly illustrates how short of inventory we are in the under $300,000 range. Actually I would say we are short of inventory of homes priced at $500,000 and below, but the lowest range really hits home showing a decline in sales below $300,000 year over year.

A prediction that might not be too bold is that if we had triple the inventory in that lowest price range, the sales of those units would have at least doubled. But it is what it is and for many years people living in Northern New Mexico have often had to settle for a manufactured or mobile home that they can afford. The average sales price over the last year is over $485K while the median sales price is $365K.

While the Third Quarter last year and this year are identical in total sales of units, sales in the middle and upper price ranges made up for the decrease (due to lack of product available) in the lower ranges. I think it is safe to say that total sales for the Quarter just completed would have been over 700 units if there was more to choose from.

Annual precipitation is yet again below the average for this date this year. The last chart I saw showed we had rec’d just under 7 inches so far this year while the historical average is over 1 inches. So when is this drought going to break? Or is this the new normal and we are now getting what we can expect to be the average for the near term future. How fortunate to be far away from the hurricanes and tornadoes that ravage our lands and people. We only have drought and a very rare case of the plague (sounds medieval) and hantavirus. And having spend some time in the Southeastern USA recently, we are fortunate not to have mosquitoes in thick swarms here.

You have to give credit to the typical Santafesino for being so frugal and careful with water use. Almost nobody has a visible blue grass yard (though I have seen some back yards with the water hungry grasses). I would hate to be selling lawn mowers and leaf rakes here.

Get your costume early so you can practice eating the Halloween candy that you will be collecting soon. It’s not my fave holiday so I will probably be sitting in the dark at home not answering the door.

Thanks for visiting my site. Its a bit of a labor of love for me so I always appreciate anyone that gets use out of it. Let me know anytime you want to say thanks. (insert big smiley face here)

Recent results remind us of the old days

When you are shopping for a home under $350,000, where do you look? Would you be happy with a 900 square foot 2/1 condo near downtown with one off-street parking place? How about new construction on the fringe of the metro Santa Fe area, with a small yard and a garage, with new appliances of a lower quality? What else is there? Maybe a fixer upper off of West Zia or the near Westside near St. Anne’s? Maybe a tract home in Tierra Contenta will be your ticket, with neighbors everywhere and a long commute to Meow Wolf or the Fiesta events?

Find me the great deals and values and watch while they will sell quickly. Whatever the new home volume is in this market, it still cannot keep up with demand for the lowest price ranges that homeowners are seeking. That drives the minimum prices up and builds a floor on the prices that indicate starter home ranges.

Improving market conditions are usually welcome, but why does Santa Fe not find success in dealing with its “affordable home” problem? For many years the answer has been for people to buy a double wide trailer on a foundation within 45 minutes of town. A lot without restrictions that allows you to do that in La Cienega, at least 20 minutes from downtown, costs over $100,000 and that’s without the home (manufactured or mobile).

In-fill is a popular concept, but within the last 3 years the city powers that be rejected certain in-fill projects because the neighbors made too much noise, or had a close connection to those decision makers. If you drive around the southwestern parts of town, off of Airport, Agua Fria, Alameda and northwest of the bypass highway, there are plenty of tracts of vacant land. Those would not be in-fill really as they are still on the edge of the city. But will all of those parcels get developed into single family, town home and multi-family dwelling units in the next 10-12 years? YES and still we will be short of inventory, primarily in the lower end of the price ranges.

Do we have enough water for all these new homes that are going to be built around here? And they ARE going to be built by someone. When you can get $225 a foot retail for a new tract home, someone is going to build those. Does it matter that we are in a serious drought – AGAIN? Lack of snow melt means the rivers and streams are lower and/or intermittent while the general water table below our city keeps dropping. What can you do?

Maybe one little place to start, and it will take a large majority of property owners to participate to make a difference, is the immediate removal of the Siberian Elm trees everywhere. They are popularly called Chinese Elm trees too, but no matter. They are thick and they grow like weeds even in drought conditions. The only redeeming value they offer is a little shade over a patio or parking place here and there. More often they just grow like crazy anywhere they can get a foothold, such as a fenceline or a wall. I recall a home right on St. Francis that had so many volunteer elm trees growing hard against the foundation, on all 4 sides of the home, that there was no economic value in trying to remove them. Tearing down the home, which was a complete mess anyway, was the logical thing to do. Bring in a bulldozer, and so they did.

I am not an expert on botany or growing things, but I am willing to bet: if 80% of all the Siberian Elms in and around Santa Fe were removed, our water table would start to rebound and our obvious water shortage would be somewhat less of a crisis.

Tree huggers, including me, think of cutting down a tree as a heresy and a sin. It is so dry that seeing anything grow is inspirational, but please not the Siberian Elm. Besides sucking up all of the ground moisture, they invade plumbing pipes and buckle sidewalks and streets. And send their seeds far and wide to pile up like snow drifts. And the branches can break and fall without the need for a major wind gust. They are a non-native species that should be removed. If they cannot be removed, they should be controlled much more than they are being controlled now.

My proposal would be to allow each property owner to keep one mature tree per 10,000 square feet of land. And as the new ones come along, they must be removed before they can sink their water seeking roots deep into the ground. Make it a nanny state battle. The government is telling me I must cut down trees on my property? They can go to hell. At least the City and the County can start on their parcels. Maybe some phase-in time frame makes sense, like 10 years to get into compliance. You tell me how else you can put a stop to the dropping water table and keep us from having to drink from our cisterns (if it ever does rain).

Do you want me to gather some expert opinions about these matters? Why is nobody making noise about this (well maybe someone is)? Why is this the elephant in the room that we are all ignoring? Thanks for reading and hope you can find your dream home soon. I want you to be a happy real estate owner.

Every dog has his day

…said someone, once upon a time. I am not going to research the origination of that saying, but it sounds like something Mark Twain or Will Rogers would have said. Or possibly Richard Nixon. And so we find ourselves in the third quarter of the year with continued improvement in sales results and still very reasonable interest rates. The town is heaving with visitors and activity, although most Realtors I know want more showings on their listings. I guess I do also, because homes need to be viewed before they will be purchased. Where to begin? When Amazon starts selling homes from their website, then we will know this dog had his day.

Look at the numbers in the spreadsheets available on the left side of these pages. In all price ranges, the average months to sell has dropped from 9.68 to 7.38 in just the last year. In the popular one half to one million range, the drop was more dramatic, going from 15.46 months on average a year ago to 10.56 months on average now. The absorption rate, which is what we call that calculation, is faster when inventory is lower and sales are up; both of which have happened just since last year. This is a trend line that I have consistently been tracking since we found ourselves in the gutter after the bubble burst. You know that bubble? The bubble that had many believing homes never go down in value and often go up by double digits every year. Everyone was wrong. Competition existed on who saw the crash coming first, but nobody escaped without serious damage. Some are still in recovery. Just now we can say we have almost reached the level of activity we saw prior to the crash and that bursting bubble. Only this time we are on a solid foundation as to value instead of seeing high appreciation unsupported by the large majority of sales. If you spend $750,000 on a home today, it is not likely to go down in value in the near future, unless we are in a nuclear war with seas rising a foot a year and anarchy is the law of the streets. Will it go up in value? Maybe someday, but that depends on you the owner.

Fears of overspending on a home should be all but erased, although it’s still possible to pay too much. No question there are plenty of homes listed for sale where the asking price exceeds the likely final sales price. But buyers have become extremely price aware that price has to be resolved first, then the other issues (location, condition, style) can fall quickly into place. All the sayings about there being a home for every buyer and a seat for every butt will be tested as we move forward with less inventory and a fairly strong influx of buyers. Some buyers become disenchanted once they examine our metropolis and others feel the prices are not justified. But some just have to have it as their own. And we can accommodate those newcomers. Changes happen slowly in an area with such long history. Affordable housing has been a headline seeking a response since I came here in the early 1980s. And likely before that. We still have that problem; witness all the manufactured and mobile homes in every rural quadrant of Santa Fe County and beyond. Last I heard, about 50% of all homes in New Mexico were not site built, but were moved onto the site on a trailer.

This market is healthy, wealthy and wise, to coin another phrase. Or like an old boss of mine (while I lived in Denver) said of himself, “fat, dumb and happy”. Those are things one could aspire to, I suppose.

Get your house while you can, while there is an inventory to choose from. The builders we need to build homes are trying hard to risk speculative home starts and I hope they are amply rewarded. We need more of those in all price ranges. In the meantime, learn your dog some new tricks.

Home sales up 3.3%

The results of 2016 data as reported to the Santa Fe Association of Realtors show a single digit increase in unit sales year over year: 2016 compared to 2015. The headline is the number:  3.3% increase. Overall the total dollar volume also went up, a decent number of 6.44%. The average sales price went up also; but only 3.03%. These numbers and the relevant spreadsheet is available for you to review by selecting it in the right margin (Monthly Residential Solds) which applies to homes, condos, townhouses & modular within the County (and City) of Santa Fe, NM.

Nobody can or should complain about a positive trend in unit sales, correct? The prior year over year (2015 vs 2014) showed up with a 7.8% increase. So we slowed down it seems. The actual increase in unit sales shows up as follows:  2014= 1824  —  2015= 1967  —  2016= 2032, which means the unit count increased by 143 for 2015 and by 65 for 2016. We did slow down a little bit.

That grand total of 2032 units sold in 2016 is still 27% below what we peaked at in 2005, during those red-hot years of liar loans, free and easy money, no doc no cry deals, etc. Still you will find plenty of homes that are worth what someone paid 10 years ago, assuming the did the normal upkeep and did not add-on or do a major remodel and update.

Land sales were hot then too. Many lots were sold in the last decade that still would not bring what was paid for them way back when real estate was great. Shall we make real estate great again? MREGA? Or maybe shorten it to MEGA? That sounds more poetic. Make realEstate Great Again. MEGA – Yeah, we just created a new ad campaign!

Some say the majority of last year witnessed buyers sitting on the fence awaiting the results of the national election. They were hesitant to make their move until they knew what direction the country (and interest rates too?) were headed in. Those same buyers might have had another excuse such as an ingrown toenail so that may have just been a convenient one to latch on to. And now that they waited, what is going on? It seems interest rates are climbing. This blog site does not track interest rates carefully as that information is almost everywhere online, but looking them up might illustrate that waiting was a mistake (if you need mortgage money). Does that mean 2017 will be better? Rising interest rates typically mean fewer buyers can buy so if 2017 is going to meet or surpass 2016, we have some work to do. Get out there and sell a home today.

If you are studying the Santa Fe residential real estate market in-depth, this site has a great deal of historical information you are free to access anytime. No future trends are predicted here. You are allowed to print pages and share them. I do not ask for compensation, but do request that you not brazenly plagiarise my statistics and pass them off as your own hard work. If you do quote me, please do so accurately and fairly. If you do not like the information and wished it showed more sales, that is not my fault and blaming me will only make you look worse. Yes, I have been blamed for being too influential on our market results. The concept is bizarre as if I spoke with a large number of sellers and/or buyers and said things that caused them to change the way they went about doing business in local real estate. Honestly I have lots of opinions (as everyone does) and am not hesitant to share them, but I try to let the hot air escape, staying primarily focused on the facts. It is a fact that there is going to be 12 months this year. I will report on each and every one of them. You can come back as often as you wish.

Lot sales up 10%

2017 saw a modest increase in residential lot sales in Santa Fe city and county reporting to the MLS database for the Santa Fe Assoc of Realtors. 2016 showed a total of 194 sales while 2015 showed 175. This is “modest” since we are still light years behind the volume of sales we experienced thru most of the last decade, topping out above 490 unit sales for six consecutive years ending in 2006. Since then it has been a dogfight just to be relevant and to be optimistic.

Lot sales trend down if people are not buying lots to build. Lot sales trend down when investors are uncertain of the values of lots year after year. Having been burned once or twice on a lot purchase, investors are standing on the sidelines waiting for a more stable and solid market and valuations. There are still a large number of lot sales (of the modest total we are reporting today) that show a sales price BELOW what that seller paid years ago. Would they reinvest in another lot? Without knowing which way the market was going? Not likely.

So any increase in lot sales is likely directly tied to a modest increase in future home owners actually buying the lot they want to build on in the near future. And we are not seeing a large increase in new construction across the board so new homes is not yet a thing we can get excited about. But the shift seems to be underway that will prove up an increase in lot sales again this year and beyond. One might feel that a 10% increase is great, but when you look at where we have been, it feels like a replacement bandage on the one that has been applied in the past. Healing is still taking place.

Please note the following breakdown and analysis of the 2017 lot sales numbers:

Sold prices ranged from $29K to $435K in Las Campanas, with 10 of the 20 lowest priced lot sales of the group of 194 sales. A total of 48 lots sold in Las Campanas.

Of all sales and in various price categories, please note:

91 sales below $100,000. 44 sales between $100K and $150K. 21 sales between 150K and $200K and 22 sales between $200K and $300K. There were 12 sales at or above $300K including one of a subdivision of 15 lots and one super premium lot in a highly desirable part of town that sold well above $1 million.   Average sold price= $142,429    Median sold price= $105,000

Compare to 2006:  561 lots were sold averaging $240K per lot (almost $100K higher than 2016 avg).

Thanks for visiting this blog site and do us all a favor: buy a lot today and build a new home on it. We need the activity and the inventory.  Happy 2017

Absorption Rate – Defined

Throughout this website and blog, the words Absorption Rate show up, in texts of posts and as titles of four unique and dynamic reports available to you anytime you visit here.

What is Absorption Rate and how is it calculated? And what does it mean?

I am glad you asked!  Absorption Rate is a calculation based on sales of homes and inventory of available homes listed for sale. First, I use only data available in the Santa Fe Association of Realtors that is managed through a proprietary program known as Paragon.

Every month I research the inventory of homes listed for sale. This number (in various price ranges) is saved and I have approximately a 15 year history of those numbers from every month. Next I determine how many sales were reported for the most recent 12 month period. This would be a rolling 12 month count that is updated monthly. The newest month is added and the oldest month drops off. Make sense so far?

Then I come up with an average number of homes that sold in the prior 12 months. That number is then used to calculate how many months it will take for all currently listed inventory to sell based on how many sell, on average, each month.

What is means is: if the Absorption Rate in a price range is longer than 6 to 8 months, any real estate expert will likely tell you that it is a buyer’s market and that buyers have plenty of inventory to look at while shopping. This is a disadvantage to sellers as they are competing with many other homes and theirs must stand out in order to be selected and purchased. Price is usually the # 1 factor for a buyer, but condition is very important as is location.

The higher price ranges in our market area tend to be buyer’s markets. The lowest price ranges tend to be seller’s markets, where the seller can expect to get favorable (to them) offers and terms.

Look at any of the spreadsheets and charts available here and you can see how trend lines and seasonal fluctuations show up. Lately inventory is up and sales are down. Take a look when you have time.

Thanks