September 19, 2011 at 4:14 PM
"...Santa Fe real estate continues to evolve and every month the market tells us a new story as we inch toward recovery"
The housing market, and specifically Santa Fe real estate, continues to evolve and every month the market tells us a new story as we inch toward recovery. You have to listen carefully to what the market is saying because often it’s only whispering. Those sublet whispers are significant and require real thought and analysis to understand. The fear I mentioned in August’s post continued… that being said we saw some positive gains and some exciting phenomena. The uncertainty of the economy, the lack of job creation last month and the continued bickering on Capital Hill continues to wound consumer confidence. However last month, we listed, sold and closed one property in 24 hours (James DeVille-wow), another in one week (Kristina Lindstrom-incredible) and we had at least three properties receive multiple offers. These “phenomenona” provide signs of hope that we are moving in the right direction.
What does this mean for Santa Fe Real Estate and me?
The Good: August sales continued to demonstrate that when a property is priced to market value buyers will act and will act fast. We saw 52 (33%) residential properties in Santa Fe County go under contract in less than 90 days from their original list date. We saw an additional 20 (9%) residential properties in Santa Fe County go under contract in less than 90 days once they were re-listed at new, lower prices. The best priced homes continue to defy the odds and sell quickly. Of course these are the more attractive properties that show the best and thus win the “housing beauty contest.” Again we saw 15 and 30 year mortgage rates bottom sparking refinancing and renewing and fueling buyer interest and activity and action. In August we saw showings increase 25%...foreshadowing an uptick in closings in the end of September and into October a nice change from July.
The Bad: In August the market dropped to a meek 99 residential sales in number of units in Santa Fe County- the lowest amount since February. Sales in August 2010 were 17% higher in terms of unit sales. As I mentioned in last month’s post our showings fell off 20% in July. One of the ways we track the market is by the following the number of showings, followed again by the number of pendings and finally closings. August is traditionally one of the year’s best selling months and this year it was one of the worst. It will be interesting to see if we rebound or if this impacts the slow progress the market has been making. The S&P/Case-Shiller Home Price Index released on August 26th showed that national home values fell 5.9% annually, sending prices back to pre-boom 2003 levels. As the third quarter comes to a close it marks the end of the busiest part of the selling season. It will be interesting how 2011 finishes…
The Ugly: The tale of two cities continues with more distressed sales continuing to increase and negatively impact values. 25% of sales in August were distressed continuing downward pressure on pricing. My hat goes off to Lauren Sato who continues to help our short sale clients navigate this market. In the last two weeks 10% of sellers reduced their prices. Meanwhile consumer confidence sank to its lowest level in two years, according to the Conference Board, a private research group. Consumer confidence fell to a reading of 44.5 in August from 59.2 in July. That is its lowest level since April 2009 and was much worse than most economists had expected.
What we can expect for the foreseeable future in the Santa Fe housing market is volatility. Buyers, sellers and their agents will need to be clear about what they want, what they expect, and if those expectations are realistic in this market. Clear, consistent and direct communication will be essential for those in the market wishing to achieve their goals.
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