Monthly Archives: January 2010

SANTA FE HOME MARKET SHOWS SIGNS OF STABILIZATION

By:  Bruce Krasnow | The New Mexican
Posted: Wednesday, January 13, 2010
Article syndicated from The New Mexican, click here to view the original article.
The best news Santa Fe Realtors have about 2009 is that it’s over.

The fourth-quarter median price for single-family homes sold in the city and county declined 9 percent to $335,000. But buoyed by a federal tax credit, the number of sales increased from a year ago by 16 percent to 274 in October, November and December. Still, the sales were less than half what they were in 2005, the decade peak.

In addition, the number of housing starts in the city of Santa Fe hit a 40-year low with 180 permits in 2009. Reed Liming, a planner with the city, said one has to go back to 1969 before finding new home construction starts at that level.

The number of agents who renewed their membership in the Santa Fe Association of Realtors declined 15 percent to 795 as of this month, said Lois Sury, the new association president, and the group has trimmed its budget to adjust. The nation has gone through an historic economic downturn — “one I’d rather read about in history books than live through again,” she said.

At the quarterly breakfast meeting Wednesday where the statistics were released, Sury said the housing market in Santa Fe has adjusted. The final sales price of a home was at 93 percent of the listing at the end of 2009, up from 80 percent a year ago — and that shows sellers have adjusted their expectations, she said.

“Affordability continues to improve, with more sales at the lower end of the market affecting the overall median price of homes,” Sury said.

Jane Trusty, an appraiser at the breakfast, called the first half of 2009 difficult, and with sluggish sales it was often hard to find comparable homes for valuation.

“We’re breathing quite a sigh of relief,” Trusty said. “What we found in the last two quarters is that things have stabilized quite a bit.”

The first half of 2009 saw stability in median sales prices — but agents say many homes were not being sold because sellers were not prepared for lower offers.

That was not the case in the third quarter, in which the median price of houses sold declined 20 percent. The just-ended quarter saw the median sales price in the unincorporated area drop 18 percent to $350,000 for single-family homes. Prices of sold homes in the city of Santa Fe fell 6 percent to $329,500. The median price in the city reached $470,000 at the end of 2005.

“Prices have reset,” Sury said.

Many sales under $500,000 are a result of the federal tax credit that was passed as part of the economic stimulus plan. The credit is now open to existing homeowners — but buyers must be under contract by April 30 to receive the money, up to $8,000 for new buyers and $6,500 for repeat buyers.

And it’s not just for move-up buyers. Sury is seeing longtime homeowners who want to downsize take advantage of the program to purchase something smaller, she said.

“It’s your tax money,” she said. “You might as well use it.”

Gary Miller, a mortgage specialist with Century Bank, said there is an upward trend in mortgage interest rates from Wednesday’s average of 5.2 percent on a 30-year fixed rate loan. That means the first quarter of 2010 brings a convergence of low prices, low borrowing costs and the tax credit. He tells potential buyers that it won’t last.

“It’s important to take action now,” he said.

For more information on the tax credit, go to www.federalhousingtaxcredit.com.

By:  Bruce Krasnow | The New Mexican
Posted: Wednesday, January 13, 2010 -

Weather

Santa Fe, New Mexico Weather

Santa Fe, New Mexico is located in a high altitude desert environment, which results in Santa Fe enjoying four distinct seasons with many warm days and cool nights.  Below is a chart showing the average high and low monthly temperatures and average monthly precipitation in inches.  Data courtesy of The Weather Channel.

                 Average        Average       Average

                   High               Low              Rainfall

Jan.           43                  15                      .06

Feb.          49                   21                      .05

Mar.          56                  26                      .84

Apr.          64                   32                     .72

May          73                   40                   1.27

June         83                   49                    1.24

July          86                   54                    2.25

Aug.          83                  53                    2.13

Sept.         77                  46                    1.67

Oct.          66                   35                     1.30

Nov.         52                   24                    1.05

Dec.          44                   16                      .65

Santa Fe, New Mexico Real Estate

Promising signs in Santa Fe’s housing market slide

Santa Fe housing sales drop, but experts see opportunity to right an upside-down market

By Bruce Krasnow, The New Mexican

Posted: Sunday, January 03, 2010

When Realtor Lois Sury went to buy her first home in Santa Fe some time ago, there were about five houses in her price range and she was competing against other buyers. That “hyper market,” as she called it, was not good for consumers, who had few choices to consider and a heavy burden to overcome to get into a first home.

Those days are gone in Santa Fe, perhaps for a long time. Market data indicate that the number of residential home sales in 2009 was at the lowest point in decades, in terms of the number of transactions and the price volume of those sales.

The statistics have been compiled by Alan Ball, a title agent who publishes a monthly newsletter on the Santa Fe real estate market. They show that the real estate meltdown is more about the industry and Santa Fe’s economy than the habits or wishes of individual homeowners.

Median prices for instance, have held up considerably well in Santa Fe, starting in 2001 at $296,000 and ending in 2009 at $447,000. That’s a more than 50 percent jump.

But the total dollar amount of residential sales shows that volume peaked at $1.2 billion in 2004-05, then tumbled to $540 million in the year just ended, a decline of 56 percent. The dollar volume of all sales in 2009 was even less than the $578 million generated nine years ago.

“That’s money not circulating in the community,” Ball said. “If you look at local Realtors, lenders, surveyors, appraisers, insurance agents — if you just start piling up all the things that directly relate to the sale of a home — it’s money not changing hands. And that affects anybody that sells goods or services. There’s less discretionary income.”

In terms of charting sales numbers, the last nine years shape a modified bell curve. Total residential sales in 2001 ended at 1,955. They climbed to 2,800 in 2005, but by 2009 had tumbled to 1,200 — significantly less than the number at the start of the decade, Ball said.

But turn over a troubling bell curve, and you get a smiley face. Ball and others see opportunity in that option.

Michael Halsey, an economic consultant and owner of Business Futures, said Santa Fe’s housing market has always been unsustainable, like an upside-down pyramid, and now there is a chance to right the foundation.

Everywhere else, communities build housing from the bottom up, with young or first-time buyers getting into less expensive homes and trading up as needed for more amenities or space. And there should be more less expensive homes being built than luxury properties.

Not so in Santa Fe, Halsey said, where the market for luxuries and second homes had long been driving the construction market. Craftsmen, builders, architects — and the labor they hired — were so busy with new high-end products, there was nothing else being built. The result was a small selection of homes for people living and working in Santa Fe who could not afford million-dollar and up houses.

“The community was supporting an industry that I felt was top-heavy as far as top-end products,” he said. “We are just now starting to fulfill the demand for entry-level housing, that hasn’t been met in past years.”

Halsey cited the more affordable new homes in Rancho Viejo as an example of how the market has adjusted. The houses are being constructed with basic finishes, but leave room for expansion and upgrades as families need them. The cost of new construction, Halsey said, has dropped in Santa Fe about 20 percent.

Sury, president of the Santa Fe Association of Realtors, said the homebuyer tax credit is already helping to expand the pyramid and is bringing out new buyers who, in the future, can trade up as their homes increase in value. A whole new generation of Santa Fe residents have a chance to get on the escalator of home appreciation, she said.

And though it’s been a slow year for sales, Sury said consumers are far more confident now than a year ago, when the stock market crashed and financial institutions were failing.

“At this time last year we were in a much worse situation than we are now. It was much bleaker. Consumers seem to have more confidence now,” she said.

Adding to the confidence is the fact that the federal tax credit for home purchases has been extended until mid-2010 and is also available to repeat buyers who want to move. In Santa Fe there are now plenty of affordable homes all over the city and not just in certain neighborhoods.

“Five years ago, we were seeing multiple offers and homes under contract in two or three days. Buyers had little or no power,” Ball said. “Now we’re seeing more balance on the lower end.”

There needs to be a solid year of sales and price gains before anyone can call an end to the housing recession. But people still want to move to Santa Fe, and many people already here want to move to a different house or change neighborhoods, he added.

“I cannot escape the attraction Santa Fe has for so many people, Ball said. “We’re going to warm up faster than other markets. I don’t know if we’re out of this thing or not, but there are promising signs.”

By Bruce Krasnow, The New Mexican

Posted: January 03, 2010