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the real estate market in Santa Fe, NM is doing its thing; a force much larger than any single one of us can influence, as it lumbers toward autumn. Hiking recently I saw some aspen leaves already changing into their golden-yellow hue, mostly because of the lack of moisture this year. The wetter the year, the longer the leaves hold on, I have heard. Maybe someone with actual knowledge can verify. That is kind of like a homeowner hoping to sell. Moisture equals liquidity. The more liquidity of that homeowner, the longer they can hold out waiting for a buyer. The least able to handle the long slog to sell their house are usually the most motivated and their pockets are not deep. Those sellers and those leaves may have all but dried up and withered away waiting for the next rain, for the next buyer.
So is Santa Fe real estate in a drought? What do you think? I guess a drought means well below typical amounts of precipitation for an extended period of time. Our real estate market is moving at well below transactional averages over the last 10-12 years. So in the drought, we have to conserve as much as possible. We have to recycle any water that we can reuse, bathtub water sent to the garden, and shower with a friend. The green green grass of home has no place in this climate and at this time. I doubt anyone would deny your right to have a vegetable garden, but a couple thousand square feet of Kentucky bluegrass? Here? That makes as much sense as waiting for your house to sell without a sign in the front yard and without any internet marketing. “Don’t tell anyone, but I want to sell my house”. HA! Is that an effective way? Not these days with too few buyers and too many sellers. You used to be able to sell a house by word of mouth; someone knew someone who was looking for just what you were selling. Not so much today.
What then separates the houses that sell from the homes that make the statistics look sad? After all, around 100 homes sell every month in Santa Fe city and county. That is something, much better than nothing! If there are 1600 homes for sale in all price ranges and 100 are going to sell in September, how do you get on that list of the ones that will sell? It is important to know your competition first, because you will want to beat your competition to the closing table. So of all the for sale homes nearby that are somewhat similar, ask yourself if you can live with an asking price that is the same as the 2nd lowest priced home in that group. I know, this is going to sound so simple and easy, until it comes time to agree to the low price necessary to get it sold. If you can put that low low price on your home, it will sell. Of course I cannot guaranty that, but I am telling you that 100 are going to sell out of 1600. You want to be one in sixteen, so you must be priced aggressively and, oh by the way, make certain the home is spotless and everything is fixed and fresh.
Have lots of money and have lots of time to wait? OK, you can join the group at the other end of the list and be in that last group to sell. In the meantime, please don’t expect lots of showings of your home or any serious offers. Homes that start out at too high of a price take longer to sell than those that start out at or very near the right price. In my experience, and this will be somewhat oversimplified, find that amount that is your absolute bottom dollar price, that is as low as anything else on the market that is comparable to your home, then add 3 % to that price and then be prepared to end up taking another 10% or more off. That is a net of 7% below your absolute lowest price. Mark it up so you can later mark it down. Has one single buyer purchased a home at listing price yet this year? I honestly don’t know but I kind of doubt it. Buyers want something taken off the asking price whether it’s already priced at rock bottom or not. They don’t much care how much you have already dropped the price. Don’t take it personally; they do not dislike you. They just know that to get a home sold these days, sellers have to give and give and give until they end up selling well below what they hoped the home was worth. If you won’t play by their rules, someone else will. You see, buyers are terrified of paying too much for a home and if they think there is a better “deal” out there, that’s what they are looking for. The winner can say “I paid 68% of asking price” and that trumps 71% or 83%. If people were less concerned with looking stupid for paying too much, I bet more homes would be selling.
I know, this is old news. I have written all of this before in this very blog, and in newsletters prior to my roll out of the blog in the fall of 2010. Many others have said the same things. So what IS new, Alan? This is not the movie The Graduate where some old guy tells a young guy “one word… plastics”. Answers today are not easily contained in one word. There are long complicated solutions to what is going on and I urge you, if you require answers to a real estate problem that is not going away soon enough, to become a regular reader of this blog. It is becoming more important now that the long-desired recovery of our real estate market is hostage to larger economic problems now unfolding on the world stage.
You and I want to sell our homes. We personally can’t solve the Greek debt crisis, or rebuild Haiti, although kudos for those trying to help. We want to be smart in how we save and spend between now and our retirement (is that a light I see at the end of the tunnel?). We can choose wisely who we vote for when our turn comes around. We can support local businesses that recycle money right back thru the same community we live in. We can stop wasting potable water on a bluegrass backyard that nobody else can see or enjoy. We can continue to support those that are worse off than we are. So with a focus on what we can do, learn all you can learn about those matters that affect you deeply. Learn about your real estate market, for example. Learn how to do some home repairs yourself, to spend less while waiting for Mr. Right to come along and buy your home. And learn about the big bad world we live in that is interdependent on natural resources, transportation, politics and tribal heritage, cash and credit, belief systems and water. Especially the water; find out where you are getting yours, find a way to pay less, find a way to use less, find a way to reuse more. And stop buying those damned plastic 16 oz. bottles of water PLEASE. I think there should be a one dollar deposit per bottle on those bad boys. Take the deposit money and invest it in our future.
