Market Update Q3 2012
It has been more than 6 years since we’ve seen wide-spread positive news about the national real estate market. We are now regularly seeing news that indicates that prices are moving up in many market areas. The number of sales is increasing in many markets, foreclosures are decreasing and new home construction is coming back to life. It has been so long since we have seen this type of news; it almost seems too good to believe. Even though the recovery is early and is likely to not be a linear event, it is causing the need for a careful recalibration of expectations. I say “careful recalibration” as every market is going through its own version of this fragile recovery. And the Santa Fe version is different than the _____________ (fill in the blank) version.
As the information on the inside pages of this report will show you, our market recovery, in terms of closed sales, is strongest in the under $1,000,000 price range, with the market segments of up to $250,000 and between $500,000 and $750,000 showing the largest gains over 2011. The over $1,000,000 market saw a significant recovery in the 3rd quarter, getting back to a level of sales that is only about 14% behind what we saw last year.
A brief summary of the state of the land market: Through the first 3 quarters, land sales are up 11% over the same period last year. The average number of land sales this year to date is just under 17 sales each month. The improvement is fueled largely by very low land prices. In some cases, land values have dropped by approximately 75%. Pretty shocking, actually. To put current land sales in perspective, in 2007, monthly land sales averaged 50.
The one area that may indicate our market’s greatest vulnerability as we head into the end of the year is the level of showing activity. The number of showings of Sotheby’s listings last month was down over 18% as compared to the number of showings for September of last year. Year to date, showings of our listings are down almost 23% as compared to last year.
In the $1,000,000+ market, we are seeing significantly fewer buyers than we expect this time of year. However, a significant share of those who are looking at properties are buying, taking advantage of dramatically decreased values, very low interest rates, and a strong desire to catch the bottom of the value cycle.
Data is derived from the Santa Fe Multiple Listings Service (MLS) and includes data for only Santa Fe County.