Hits: 15
As requested, I have compiled some sales information on homes in the Tierra Contenta area in the western part of Santa Fe.
Generally it is the area near Capitol High School, West of Cerrillos and South of Airport Rd. There were already developments of homes and mobile homes in that area when Tierra Contenta began and the Realtor database, which I used for the following information gathering, does not always provide a clear distinction between various smaller subdivisions within or near Tierra Contenta. And there are many of them. In a typical year showing 70 home sales, only about 10 reference the actual name Tierra Contenta while about 40% of those 70 sales reference another subdivision within the greater development.
There are, however, ways to look at the data and they tell a story often repeated about how the last 10 plus years has affected homeownership. This is true nationwide and not just in Santa Fe. But one of the facts to acknowledge in any study of Tierra Contenta is that a fairly large number of homes were purchased there, whether directly from builders and/or with the assistance of a Realtor, were highly leveraged at time of sale. That means the percentage of loan to sales price was higher than average. In some instances that might be 100% financing, or 97 or 95%. That means the home buyer had very little of their own money to put down on the purchase.
Without a definitive way to prove the following, these assumptions seem to apply to Tierra Contenta:
Many homes were purchases with little or almost no down payment. Many of those mortgage products were adjustable rate mortgages that re-set at higher payments after 2 or 3 or 5 years. The economic mess we all found ourselves in by about 2008 meant that many had to look for a new job or had taken a pay cut. Some homes that had 2 earners devolved into only 1 earner. As past due payments and job or health issues helped create an inventory of loans in default, lenders began to take action with legal foreclosures against some borrowers and their homes. This action creates a new market wherein homes become available for purchase at a price well below the original sales price of only a few years prior.
An example of the numbers of a typical transaction might be: Home bought in 2006 for $275,000. By 2010, homeowners had lost jobs or were making less money while their payment increased as the rate re-set. They fell into default and eventually moved out. The lender, after getting clear title thru the legal process, puts the home on the market for what it will sell for. Due to abandonment and the disenfranchised owner being kicked out, the home has deteriorated. The new sales price, lets just say in 2012, turns out to be $194,000. This new sale contributes to a terrific weight or burden on the rest of the homes in the area. A nearby home that sold in 2006 for $275,000 might have gainfully employed owners who have never been past due. Yet their home may only bring something like $222,000 on the market, if they were to want or need to sell to accept that job opportunity in another city. That second homeowner suffers indirectly, not unlike the first homeowner that was forced to move out. Every homeowner in the general area has the same experience should they try to sell their home.
Will Tierra Contenta see home values appreciate anytime soon? They are likely to bounce back eventually, but for now we are still be working through the effects of numerous foreclosures and loan defaults.
Here are some numbers to process:
2001 – # 94 sales – High=$251,900 Low=$130,000 Median Price=$168,700
2005 – # 180 sales – High=$442,000 Low=$170,000 Median Price=$243,500
2009 – # 69 sales – High=$385,000 Low=$137,000 Median Price=$208,000
2013 – # 81 sales – High=$325,000 Low=$122,200 Median Price=$185,000
Unit sales are just coming back after the lowest annual count from 2011 of 54 homes sold. We have had 65 homes sold this year to date in early October. We are likely to exceed last year’s 81 count.
Tierra Contenta had more than its fair share of low down payment loans made for home purchases. Those loans are inherently more risky and result is higher percentages of default. As we are, in the author’s opinion, still coming out of the largest economic downturn since the Great Depression, Santa Fe and its homeowners experienced substantial price and value reductions over the last 7 or 8 years. A home buyer that purchased anywhere from 2001 to 2007 may, I repeat MAY, still not be able to get the sales price they paid back then, should they try to sell today. There are exceptions. But not very many.
Again, information about sales in Tierra Contenta is difficult to have confidence in as the data input by Realtors over the last 15 years has been lacking as to specific subdivision names. Also many home sales in Tierra Contenta were sold outside of the Realtor community and those numbers are not always included in the MLS database that Realtors can access.
for more information: http://www.tierracontenta.org/faq
