What is the background for putting a positive spin on things, even when the facts don’t indicate “things” are all that positive? Is it “the glass is half full” versus “the glass is half empty”? Possibly some folks keep beating the drum that everything is going up and growing and improving knowing they will be counterbalanced by someone else that counts the numbers and puts out a statistical report that shows an objective view. As you likely already know I am of the second school; putting numbers together that tell the story in facts and statistics instead of moods, desires and emotions. And yes I desire a growth in sales as much as anyone else. But wishing and hoping does not make it so. Maybe I could manifest progress by focusing my energy on having healthy shiny white teeth? Or channeling catching a huge fish next time.
We desire to see improvement, we want to get better, but what is going on? Why are sales numbers down in July of 2016 when we have had years of steady and solid growth coming out of the deep economic recession that began almost 10 years ago? July 2016 reports show 30 fewer home sales compared to the same month in 2015. The rolling 12 month count of home sales in all price ranges hit its lowest level in over 18 months. What is your take on the plateau we are on right now? Many blame the lack of inventory for the slower sales numbers. But how can we have 15 months of inventory in the 500K to 1 million segment and say there is a lack of inventory? Three out of four price range reports I publish here show a decrease in unit sales. And the inventory numbers since the 2012 year have been basically level, with slight variations up and down. We have almost exactly the same count of homes for sale in that price range now as we did in 2012 and 2013. Back then you will recall everyone said there was too much inventory. Now apparently their standards have changed and the same number now counts as too little.
The say what? …you don’t say aspect is: who is going to speak up when the market turns flat or turns downward? It is not the typical Realtor style to say the market is changing and slowing down. The usual gig is spouting a sales pitch that says things are getting better and you should get your house on the market now to take advantage. Or you should buy now before all the good homes are gone. Really? 368 listings in Sep 2013 and 371 listings now in August 2016? (between 500K and 1 million)…That is not even a 1% change per year for three years. What are people really saying when they say there is a lack of inventory? One of the first things I hear is it’s all old, shopworn and dated inventory that nobody wants to buy. That is not quite the same as saying there is a lack of inventory. You may be putting your own spin on things to claim the homes for sale are not worthy of your money; a subjective judgment about currently available homes.
What may be most rare is the correctly priced home that someone can afford to purchase & remodel with their final cost coming out fairly close to the newly created value, after the work was done and improvements were made. Plenty of examples exist of homes that are for sale and by most estimates, need substantial work to bring them into the 21st Century. Most buyers will not throw money at a home only to have it worth less than they put into it. For many years one could create equity by buying and remodeling, assuming it was done well and the improvements enhanced the home’s appeal and value. Maybe that is not that common in Santa Fe these days.
Does it matter what anyone says? What most matters is what people with money to spend on housing are doing. They are being quite selective and negotiating prices below asking price, for the most part. Buyers still have the balance of power on their side, except for the rare offering that is a beautiful home that is priced to sell from day one. How does one arrive at a price that fits that definition? “Priced to sell” is a groovy phrase with a good beat and you can dance to it. But where is the hit factory that comes up with these prices? Most Realtors can tell you the right dollar figure, but what is hard to understand is how they can take a hard look at today’s market and state with confidence that inventory is in short supply.
Is MAGIC or VOODOO required to know how to price a home? Not magic, but maybe a sober look at comparable sales with all subjective opinions left out of the formula. Can a seller truly think their home is the best one on the block only to have the proof show up in the resounding lack of interest when it’s listed for sale? Should a seller listen to their Realtor when they discuss the price? Maybe. Maybe not. Ask me for my designation of the two most comparable sales to your home and then tell me why yours is better. We can place a side bet on how the final sales price will be arrived at and what it will be.
Santa Fe residential real estate is a wonderful hobby, and for some a career with great potential. Many place themselves squarely in the forefront of knowledge and experience in terms of knowing our market. Some stand out and others muddle through. Get good, reliable and true information; ask your questions over and over. You don’t get to say if you don’t remember to ask.