The res­i­den­tial r.e. mar­ket

Home - Santa Fe Real Estate Guide - - SOTHEBY'S INTERNATIONAL REALITY - By Paul Wei­de­man

The sup­ply of homes for sale in the Santa Fe area was down a sig­nif­i­cant 8 per­cent in the 4th quar­ter com­pared to a year ago. Bar­bara Black­well, 2015 pres­i­dent of the Santa Fe As­so­ci­a­tion of Re­al­tors, said that tight­en­ing of in­ven­tory has helped to res­tore “more com­pet­i­tive” prices. “Look­ing back over the en­tire year,” she said, “in­ter­est rates re­mained lower than ex­pected, help­ing to at­tract buy­ers. The im­proved hous­ing af­ford­abil­ity cou­pled with new FHA lend­ing prod­ucts may en­tice more new home­buy­ers to pur­chase this year.” On the down­side — bar­ri­ers to a greater de­gree of re­cov­ery— are stu­dent loan debt, slug­gish wage growth and a lack of suf­fi­cient mort­gage liq­uid­ity, ac­cord­ing to a year-end re­port from the as­so­ci­a­tion.

Home sales in the City of Santa Fe and Santa Fe County rose by nearly 3 per­cent in the 4th quar­ter of 2014 com­pared to the sales level in the fi­nal quar­ter of 2013. The city/county me­dian price rose by 8 per­cent.

The vol­ume of home sales in the quar­ter was up nearly 7 per­cent to $177.6 mil­lion. The me­dian house price rose 11 per­cent in the city, to $310,500; the county me­dian was also en­hanced, but by less than 3 per­cent, end­ing at $389,000. Land sales were down 15 per­cent, but prices were up 25 per­cent. In short, the 2014 real-es­tate mar­ket con­tin­ued a pat­tern of re­cov­ery from the late-2000s fi­nan­cial cri­sis. The price gains were still pos­i­tive, but less ro­bust than last year, the SFAR re­port said.

That was also true statewide. “New Mex­ico hous­ing trends end 2014 slightly ahead of 2013,” was the ti­tle of a re­cent re­port from the Re­al­tors As­so­ci­a­tion of New Mex­ico. The state as­so­ci­a­tion had 16,916 re­ported home sales, a 1.2 per­cent in­crease over the re­ported 16,708 sales for 2013 and an 11.4 per­cent in­crease over the 2012 fig­ure of 15,182 sales. The me­dian price statewide in 2014 was $175,000, up slightly from 2013’s $173,000.

“These fig­ures in­di­cate the New Mex­ico hous­ing mar­ket is con­tin­u­ing to im­prove, though at a slower pace than 2013,” said Baro Shal­izi, a long­time Santa Fe Real­tor who cur­rently is serv­ing as pres­i­dent of the Re­al­tors As­so­ci­a­tion of New Mex­ico.

What kind of growth will the Santa Fe mar­ket ex­pe­ri­ence in 2015? “In­di­ca­tions are for im­prove­ment,” said David Dougherty. “It strikes me that the econ­omy, at least na­tion­ally, is in an in­ter­est­ing, maybe once-in-a-life­time sit­u­a­tion with very low in­ter­est rates, mod­er­ate growth, and not de­fla­tion but dis­in­fla­tion, with low­er­ing gas prices and peo­ple hav­ing a lit­tle more money in their pock­ets. We still have a lot of sup­ply in hous­ing but I think it is a bit less, which fore­bodes well, so all we need is de­mand.”

The ex­tent of job growth re­sulted in an in­crease in home­buy­ing con­fi­dence, but have banks loos­ened up on loans? “I don’t see any change there, but I do see peo­ple qual­i­fy­ing,” said the prin­ci­pal of Dougherty Real Es­tate Co. on West San Fran­cisco Street. “There are more peo­ple work­ing, peo­ple have more dis­pos­able in­come. The feds have helped a lit­tle bit with smaller down pay­ments. You can now buy, in cer­tain cir­cum­stances, for 3 per­cent down, so there is a group of buy­ers that has been added to the mar­ket.

“I’m look­ing more, at least in our mar­ket, at the fact that buy­ers sim­ply have more money. A lot of re­tirees have 401(k)s and sav­ings that have been bol­stered and they’re feel­ing a lit­tle bet­ter and they’re will­ing to take a lit­tle­more risk and buy a home or se­cond home.”

Hasn’t the se­cond-home mar­ket slack­ened in re­cent years? “What I’m see­ing is maybe ‘tran­si­tional’ home­buy­ers. They’re liv­ing in Chicago or New York and they haven’t sold their homes yet but they know they’re go­ing to re­tire and they know they want to come to Santa Fe and in some in­stances they’re will­ing to buy here be­fore they sell. They’re go­ing to be shift­ing their lives to Santa Fe, rather than buy­ing se­cond homes.”

Early in the re­ces­sion, Santa Fe’s real-es­tate mar­ket wasn’t do­ing too badly, but it be­gan to be af­fected by the fact that po­ten­tial buy­ers in Santa Fe’s “feeder mar­kets”— in­clud­ing Cal­i­for­nia, Texas, Illi­nois, New York, and Florida— were un­able to sell their homes in or­der to buy in Santa Fe. “And now Santa Fe, be­ing the clas­sic con­trar­ian,” Dougherty laughed, seems to be do­ing a lit­tle bet­ter than some other mar­kets, for ex­am­ple Dal­las and Hous­ton, which, be­cause of the oil and gas de­ba­cle right now, have slowed a lot.”

On a point hav­ing per­haps noth­ing to do with the strength of the mar­ket, Dougherty said the vi­sion of home­buy­ers is chang­ing. “I’m sens­ing that tra­di­tional Santa Fe Style may be a lit­tle out of vogue right now. The East­side is still strong; I still think it’s the strong­est

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