The latest home sales figures that will be posted on this site by the end of next week (by May 10, 2013) will show that we have seen a slowing trend in the growth of home sales in the Santa Fe, NM market. The last full 12 months will still produce a number in the 1600 plus range, well above the 1200 plus range of 3 years ago. But the growth curve has come close to leveling off again. Will we climb above 1700 home sales for the calendar year of 2013? Stick around to find out.
In perspective, that 1700 plus level would be absolutely wonderful (a huge improvement over the last 6 years), but still way behind the torrid pace of 2005 when the annual total exceeded 2800 homes. We knew that those high volume sales years might take forever and a day to get to again. And yes, it will be many more years before we can brag about 2800 homes sold per year around here.
But we have made huge progress getting out of the slump that we fell into from the housing bubble bursting years ago. Just to claw our way back to 1600 homes sold per year instead of 1200 is a nice 33% improvement. I cannot neglect to mention the fact that the difference between 2800 and 1600 is a drop of 43%. The positive way to see it is that we have improved from a 57% drop from the peak to a 43% fall off. So in terms of the high point of home sales in Santa Fe, NM we have improved by (57 minus 43 = 14) a margin of 14% from the dark days of 2009. Are you with me so far?
So lets play a little what if game and predict we get to 1700 homes sold for 2013. Then lets say we continue the annual growth rate of about 100 more homes sold each year. (looking back; 1200, now up to 1600 after 4 years). That means 2013=1700 < and 2014=1800 < and 2015=1900. OR lets say we pick up the pace and get to 2000 homes sold for the entire year of 2015. That’s a reasonable guesstimate. Which is not a zestimate, of course.
2000 homes in 2015 versus 2800 homes in 2005. How the mighty have fallen!! 2000 units sold is still 27% lower than the peak year of 2005. OUCH!! But are my numbers too conservative? Do you feel that the market is really getting warm and sales will climb faster and higher? Why do you say that?
Certainly interest rates are still fantastically low. And values are still good by comparison to where we were 8 to 10 years ago. We know that we lack new home construction as a measure of where the future home sales will originate. Maybe that sector can find a friendly Banker and start some spec homes that will sell quickly. That alone would fuel renewed confidence.
A currently fashionable way to describe the Santa Fe NM residential real estate market is to say there is a serious lack of inventory. What numbers are those people crunching? IF there is a shortage of available homes, it might be in the under $300,000 range, where the volume of sales indicates an absorption rate still in excess of 7 months. Is that a shortage of inventory? OR is the current fashion really saying that it has become more difficult to find a quality home priced under replacement cost these days?
Santa Fe has never had Big Industry to look to for job creation. We are heavy on state government (a shrinking job base?), tourism and related service industries (maybe the only segment for job growth lately) and the elusive 2nd home and retiree population, many of whom are not hiring locals for haircuts, dental work and financial advice. Probably shopping online instead of local, too.
Tomorrow might be better. The glass might be half full. Change the way you look at things and the things you look at change. What you focus on expands. Let us all focus on continued improvement in our health, our careers, our families, our love lives, our sales results, our quality of life, our contribution to those in need… Do something meaningful for a child today.
Today we are celebrating the regional favorite Cinco de Mayo holiday.
Tomorrow we get back to work and make a difference in someone’s life. There is no try.