Market moving slowly upward
By Paul Weideman for the Santa Fe New Mexican
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. City/county prices rose by 8 percent.
The sheer 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 the 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 is serving as president of the Realtors Association of New Mexico this year.
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 little more 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 the “feeder markets” of California, Texas, Illinois, New York, and Florida were unable to sell their homes in order to buy in Santa Fe. “And Santa Fe being the classic contrarian, we now seem 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.”
In another 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 part of our market. But when you get to Las Campanas and some other areas, modern, cutting-edge, linear homes seem more to be in favor.”
I asked Julia Gelbart, an associate broker with Santa Fe Properties, if there is still a desire for old-fashioned Santa Fe Style with saltillo tiles and vigas. “There’s always the Santa Fe panache, but I’ve worked with more people who go for the cleanness of contemporary design,” she said. “But whatever a buyer wants, we can find it. There’s enough diversity, in our market, in our prices, in our styles.
“I do open houses almost every Sunday. You meet people from elsewhere who want to talk to someone who lives here and knows the market. I tell them, The next time you come to town, call me and I’ll give you what I call the Santa Fe sampler. Give me your price range and I’ll drive you all over the city and show you the house in that location at that price. For $600,000, for example, you can find houses in so many areas.
“Very few people start out saying they don’t know what they want,” Gelbart said. “They all know what they want. They want to walk to the Plaza. Then the reality sets in. If they want a big gourmet kitchen, a big open floor plan, they’re not going to get that in their price range a block from the Plaza.”
Both home-sales numbers and prices seem to be on the rise. “It depends on which stats you look at, but if the buyers get the houses they’re happy with, they don’t care about the stats. This is a real individual market.
“A lot of the people who contact me are baby boomers and Santa Fe is perfect. We have all four seasons, good medical, and incredible culture considering our population, and so many interesting people.”
In a comment about inventory, Gelbart said many good houses on the market are being overlooked. “Part of it is the time of year and they might not have much curb appeal. But we have to get past that idea. I don’t think many of our houses have good curb appeal — they’re basically brown boxes — but they’re so special when you get inside.”
She thinks 2015 will be a busy year for real-estate brokers in Santa Fe. “I do. Baby boomers are impatient. They want to know what they’re going to do with the rest of their lives, and they’re decision-makers.
“The market has been slow, but it’s been an upward ascent. All of us busy Realtors know that we have people coming in. I already have July booked with buyers who are coming in.”