Do you have favorite & consistent sources or do you just read the paper sometimes? Do you subscribe to some business magazines or some of the many electronic newsletters? There are many ways to get a news fix on the national or even the local housing market. Some of the fine journalists at the Santa Fe New Mexican will bring housing and real estate back into the conversation now and then. On a national scale, there are experts with opinions to share everywhere you turn. In sorting through the stacks of emails and publications I look at, there is a preponderance of opinion that we still have not seen the bottom of the housing market collapse. Sure, there are some that say we have hit bottom and are now in recovery. But that opinion is a small minority of the so-called experts. I have to lean toward the majority that have another conclusion. They say different things, including “we are staying at the bottom for several more years” or “we might see an additional 10 to 20% decrease in the value of existing homes”. What? Read that again! Or just start digging around the internet and business publications to get a flavor of what many people are predicting for our housing future. Are you reading the right reports? Ask yourself if the writer has a vested interest in what the written content is; then trust more those without that vested interest. Some are honest enough to disclose.
Let me know if you want me to repeat all the statistics and sources, but the vast majority of things I have read and seen say we are still a long ways from any true recovery of a growth curve or actual appreciation in housing. Yet some still proclaim how good an investment residential real estate is. Standing still is not recovery. Treading water is not appreciation. So maybe we are expecting too much with this fixation on the concept of a recovery. Or maybe we are about to take off into a new cycle of growth and ever increasing sales numbers. Maybe there never will be a recovery. Is not a recovery going back to the good old days anyway? If you recover ground you lost, did you actually advance? Maybe at best things will settle down to where there is no further erosion in values and sales prices, which we will then define as success, plant our flag in the ground and claim victory over the naysayers. Stagnant and flat might be the new growth. At least it’s not falling further behind or moving lower. Reason for celebration? Well, if we could ever be certain we were through with the declines and the drops and the erosion, then possibly we could justify that bottle of champagne.
In a few days I will post the Santa Fe County residential real estate sales and inventory comparison I refer to as an Absorption Rate Chart or spreadsheet. This will include sales and inventory through the end of June, 2011, which we just passed. You will be able to compare it to many other years at the same point on the calendar and you will be able to draw some conclusions about how our little Santa Fe market is doing. Take a look. It will not be easy to digest or rationalize. It will show that we have been sitting in a fairly shallow pool of water trying to stay cool, when its only our feet and our butts that are damp. I wish I could come up with some good news to report, but facts are facts and any cheerleading on my part is likely to sound hollow and false. If someone has your full attention and tells you things are getting better, check their medication.
In a very-near-future post I am going to report on a highly informative presentation I recently attended with a widely recognized expert in metropolitan studies (including housing and careful looks at Santa Fe and New Mexico). There are already well established trends in our country that will likely affect everyone working in any segment of real estate, from lending to sales, from construction to management; plus all the related careers and businesses such as house painters, appraisers, landscapers, loan processors, moving and storage outfits, solar collector installers, well diggers, septic pumpers, tax collectors, window washers, garage sale enthusiasts, politicians, librarians, paper delivery folks, door to door sales people, bank presidents, bus drivers… please stop! Am I saying everyone will be affected by the changes already underway in housing ownership and finance? Yes, that is what I am saying. Find me a profession that is not somehow linked so I can exclude them from the triage.
And my Tough Love and other medicines – part two is also coming soon to a computer screen near you!