Normally about this time, we would be sharing the 1st quarter market statistics that were recently published by the Santa Fe Association of Realtors to provide an update on our local housing market. However, with the Governor’s mandated shut-down and the socio-economic crisis we find ourselves in, the million-dollar question we are asked is, how is Covid-19 going to affect our local home values? While the 1st quarter numbers include about 2weeks of the shutdown, they certainly do not reflect the paradigm shift that real estate has become, a virtual marketplace for most buyers and sellers. Nor does it fully encapsulate the on-going impact it will have both nationally and then locally upon Santa Fe. But for now, here is the news we can share.
Our Santa Fe real estate market is still experiencing record low levels of inventory and this is only acerbated by the Covid-19. When we look at all areas within Santa Fe, all but one experienced gains in home prices from over this same quarter last year. Areas such as the northwest city limits and the southeast county had modest increases at only 2.3% and 2.4% respectively. A couple of areas had incredibly robust price appreciation including the southeast city limits, otherwise known as the Eastside and South Capital, which saw a 60% increase in prices from this same quarter last year. In the county, the Tesuque area had a big boost in price with last year’s median sales price $515,000 versus $979,000 for this past quarter. Other areas of note include the northeast city limits with an 11% increase in median sales price and the northwest county with a 10.9% increase.
So, a really hot market going into the crisis and the big question is will those numbers hold, improve, or decline as we move into the summer? The plethora of real estate articles online range from the idea of a housing crash being imminent to the housing market becoming tighter and hotter. Let us look at the National Association of Realtors flash survey done April 12 and 13th to its membership to see nationally the impact and then compare it to our own survey done by the Santa Fe Association of Realtors on April 9th. Not surprising, the responses locally mirror those nationally. Here in Santa Fe, over 88% responded that their buyer traffic has either decreased or significantly decreased due to COVID-19. Nationally, a similar question regarding buyers reflected that Realtors saw a 78% decline in their local traffic and 44% of those report the change is more than 50%. NAR’s survey further showed that 60% of homebuyers put their purchase on hold for a few months while 12% are still in the market and relying on virtual communication, and another 12% decided against buying indefinitely. 8% of those respondents said there was no change to their client’s behavior, and they were continuing to meet and show properties in person. Curiously on the NAR survey, a question was asked about how many buyers were expecting home prices to be lower now due to the virus. While 37% responded there would be no change, 63% of members said buyers are expecting a decline in home prices. Meanwhile, on the selling side the NAR survey asked about seller’s attitudes and 57% reported that listings are being delayed until the virus has passed. Locally, over 68% of our members stated there is a decrease in the number of homes being listed for sale and 51% responded that they have seen sellers removing their listings from the market. 83% of Realtors nationally responded that there is a decline in the number of homes on the market.
When you combine the results of the local survey to our already historically low inventory levels, it’s no surprise that properties are still selling at this time. While buyer traffic might be muted, there still seems to be enough interest in purchasing a home in Santa Fe right now that well priced homes are still selling in record times. We looked at the market activity 3 weeks prior to the New Mexico shut down to compare that with the three weeks after the March 24thst order to see if the Covid-19 had any impact.
On March 3rd, there appears to have been 397 properties listed for sale in Santa Fe. On April 14th, that number climbed to 482 homes available for sale and that is an increase in almost 100 homes which clearly reflects a slowdown in buyer traffic. As for homes pending, the three weeks prior to the shutdown saw 78 homes accept offers while the three weeks following the shutdown actually had 85 accepted contracts. This number may be surprising, but it could reflect an urgency by those serious buyers to purchase prior to any disruption of their financial ability due to the Covid-19 and the economy. Of those listings that were cancelled or withdrawn from our market, there was a 33% increase following the shutdown which is a clear reflection of our real estate surveys.
Given the decline in the stock market and the volatility of the economy, we were curious to see if there was any bearing on prices of those homes that went under contract after the Covid-19 shutdown. Surprisingly, there was no discernable trend that reflected any change of homes sales due to worry for the economy, the stock market, or the virus in general for those purchasing. The market segment for homes priced up to $350,000 saw 31 contracts prior to the shutdown and 30 contract the three weeks following. For homes priced up to $500,000, there were more contracts with 24 accepted offers versus 17 the three weeks prior. Homes priced above $500,000 to $750,000 saw 18 contracts before and 13 contracts after. Homes above $750,000 to $1,000,000 had 5 contracts prior to the shutdown and 8 contracts after. And homes above $1,000,000 accepted 7 contracts three weeks prior and only 4 three weeks following the shutdown.
So, the bottom line is that Santa Fe is still very viable when it comes to our housing market. For those sellers who have already vacated their homes, this might be an opportune time to sell with historically low housing inventory. For home sellers who are waiting, most buyers, too, are on the sidelines delaying their purchase to safer times. Even in the midst of this most serious and global pandemic, Santa Fe remains a sanctuary for those of us fortunate enough to call it home and we believe that it’s desirability will only increase once the worst is over. Until then, our wish to all our readers, please stay safe and be well.