Is that a glimmer of hope you see with the most recent sales numbers for upper end homes? For the first time since 2004, the absorption rate for homes above $1,000,000 in the Santa Fe, NM market area is now down to slightly more than two years. This is the length of time it would take all of the inventory of listed homes to sell based on the sales volume of the last 12 months. It has not been that short a period of time since 2004. All of our hard work just might be paying off. The answer to the question in the headline could be YES, but you know I can not sit still with a one word answer. You know me better than that.
Seriously, a blog visitor left the comment that we have now gotten back to where we were in 2004. And that is saying something because if you were in business at that time, the market was hot and business was easy and good. Well, good anyway. Those words do not apply to present day market conditions, but improvement is always welcome and it seems we have something to smile about. In 2004, nobody had any idea of what was ahead, and had even a few of us understood how completely the real estate bubble would explode, never mind burst, we would have done things differently. I personally recall a contract I was in to sell my home back in 2004. I dug in my heels over some small issues the buyer objected to. That was a mistake, I will admit. The contract terminated. I figured I would get another buyer. By the time I finished following the market down, my last listing price (before I took it off the market and leased it) was 17% below what it was under contract for. And no buyers in sight! The amount it was under contract for was 18% below my original asking price. Let’s see, 18 plus 17; that comes out to 35. And there were no buyers at 35% below my starting price, anyway. So that number cannot be considered its value; just what I last hoped to sell it for. I am happy to have good tenants there now and they just might stay a long time, which would be wonderful.
Lately I have been reading some old-time sailing books and the word YARN comes up in each book. My understanding of the definition is a yarn might be a long, drawn-out story, with some truth to it, that just keeps on going, with no punch line and no final resolution. It will include some funny lines, some sad events, some risque’ language and some drama thick enough to stand a spoon in. There are some amazing real estate yarns out there; if anyone has not heard one already, let me know. A good story-teller can stretch that yarn for hours in between hitting golf balls or cooking dinner or cutting calves. Perfect while reefing sails or looking for land in the distance.
Since I recently returned to real estate sales (no sales management, no title/escrow, no joke) I have been touring available homes to get a handle on the inventory and to enhance my understanding of what is not selling and why. An unsold home listed for sale is considered a failure until it sells. You cannot use a listed property as a comparable sale when arriving at a value for a similar home. Since nobody has agreed to pay the asking price, (actually nobody has agreed to pay near the asking price) that constitutes a failure of marketing. Until a home sells, there is nothing you can use to help you price another home in the neighborhood. Well, there is one thing it is good for; to tell you at what price level you have to stay below. This reminds me of the fine line in describing what a seller is thinking about the home they want to sell. The seller is either on the market, or they are in the market. If your home is on the market, has it sold yet? Likely not. If you are in the market, you may be entertaining offers fairly soon after the sign goes up in the yard. What does a home on the market mean for a real estate professional? It means they have to exclude it from their research while they seek a home suitable for a buyer client. Buyers depend on their Realtor to only show them homes that are in the market.That is exactly why I am touring homes for sale as much as possible.
Did I tell you the lifestyle of a Realtor is non-stop fun? It’s true. If you want to sleep past 8 AM, you can do that. If you want to go home and watch Ellen in the afternoon, you can do that. Snow skiing? Baking bread? Playing the piano? Golfing? Taking the dogs to the park? As an independent contractor, a Realtor can do anything he/she wants to do all day long. Funny how what I want to do requires the participation of someone else. Like I really want to list that home on the corner near my house. That would be really fun. And then even more fun would be for a buyer to show up and love it and purchase it. Let’s make that a cash buyer while we are painting the fun picture, OK?