Neil Lyon’s Spring 2009 Market Briefing & Marketing Update
As the very visible stock market continues to show signs of strength and investor optimism, we
all want to believe that the worst is behind us. Challenging that hope is our concern about another
major bump-in-the-road: unstable (but growing?) consumer confidence and the unsettling
What cannot be debated is that there is now a flow of refreshing positive economic news. We
started seeing tidbits of this in January, but March was when it began to be dispensed with
some regularity. There is still plenty to be very concerned about, but the outlook doesn’t appear
nearly as bleak today as it did just a couple of months ago.
Even with the uncertainty that exists, we are now starting to hear from buyers that magical
phrase: “since it looks like we’ve hit the bottom, we think it is a good time to buy. We don’t
want to miss it by being late”.
It has been quite some time since those words have been spoken to me, and I am currently
working with buyers who feel this way. They have returned to the market and are now actively
seeking a Santa Fe residence. This re-engagement is becoming more common.
“Cautious optimism” has returned to the market and buyer activity is starting to reflect it. I
don’t want to overstate the increase in activity, because we are still far below the activity that
we experienced even a year ago. 33% off of last year to be specific. However, we are starting
to see an increased level of buyer interest and sales.
Since the first of the year, in Santa Fe County, we have been averaging just over one new
pending sale per week in the $1,000,000 to $2,000,000 price range. Over $2,000,000, we have
seen one new contract, on average, every 3 weeks. These numbers are a stark reminder of
how small the “luxury home” market is in Santa Fe at the current time. However, last week was
the busiest week the market has seen this year, with 4 homes between $1,000,000 and
$2,000,000 going under contract. Prior to last week, the previous busiest week was 2 new
sales in this price range. Over $2,000,000 there was one new sale last week. It had been 3
weeks since the last under contract at over $2,000,000. Taking into account all of the closed
sales reported in the MLS in the first quarter of this year, 95% of them were at prices below
$1,000,000. Of those sales, 92% were at prices below $750,000. This represents an amazing
shift in our market as compared to the past.
With positive news slowly becoming more commonplace, it will be easy for property sellers to
adopt a more carefree attitude about pricing their properties. It is assured that sellers will
adopt a more optimistic attitude well before buyers do. However, with multi-year inventories in
virtually every price range in the local market (over 5 years of inventory in some segments), we
expect sales to pick up long before values begin to climb from their current levels. Stabilizing
property values will occur first, well before any serious price appreciation can be expected.
As one who keeps a close eye on what the “leading experts” are saying, I know one thing with
perfect clarity: no one knows what the recovery will look like and when it will happen. In a
very strange way, this is somewhat comforting, in that people much smarter than I don’t really
know what’s ahead.
A brief note about neillyon.com
We have gotten great reaction to the USA Report on my website. This report shows, week by
week, how many properties are newly under contract (U), how many have recently sold (S) and
how many are newly active on the market (A). We continue to describe the circumstances
around many of the most recent “under contracts” (U) and “solds” (S), which shows an amazingly
interesting snapshot of the market. Some properties are selling within 30 days of going
on the market and others are taking over 2 years and 7 price reductions before going under
contract. It reminds us just how complex and unpredictable the local market is.
If you haven’t yet seen the USA Report, go to neillyon.com and click the USA Report button. It
is that simple.
As always, if you need expert real estate assistance in Santa Fe, please consider and contact us.
Neil D. Lyon, CRB, CRS, GRI
Santa Fe’s 2001 Realtor of the Year