Santa Fe real-estate market may stabilize as 4th quarter prices declined

The best news Santa Fe Realtors have about 2009 is that it’s over.

The 4th quarter median price for homes sold in the city and county declined 9 percent to $335,000. But, buoyed by a federal tax credit, the number of homes sold increased from a year ago by 16 percent to 274 in October, November and December. Still, the sales were less than half what they were in 2005, the peak sales year of the past decade.

In addition, the number of housing starts in the city of Santa Fe hit a 40 year low with 180 permits in 2009. Reed Liming, a planner with the city, said one has to go back to 1969 before new home construction starts were at that level.

Finally, the number of agents who renewed their membership to the Santa Fe Association of Realtors declined 15 percent to 795 as of this month, said Lois Sury, the new association president, and the group has trimmed its budget to adjust.

Sury said the nation has gone through a historic economic downturn, “One I’d rather read about in history books than live through again. ” The housing market in Santa Fe has adjusted, she said at the quarterly breakfast meeting Wednesday where the statistics were released.’

She said the final sales price of a home was at 93 percent of the listing at the end of 2009, up from 80 percent a year ago — and that shows sellers have adjusted their expectations.

“Affordability continues to improve, with more sales at the lower end of the market affecting the overall median price of homes,” she said.

Jane Trusty, an appraiser at the breakfast, called the first half of 2009 difficult, and with sluggish sales it was often hard to find comparable homes for valuation.

“We’re breathing quite a sigh of relief,” she said. “What we found in the last two quarters is that things have stabilized quite a bit,” Trusty said.

The first half of 2009 saw stability in median sales prices — but agents say many homes were not being sold because sellers were not prepared for lower offers.

That was not the case in the third quarter, which saw a 20 percent decline in the median sold price. The just-ended quarter saw the median sold price in the unincorporated area drop 18 percent to $350,000. Prices of sold homes in the city of Santa Fe fell 6 percent to $329,500.

“Prices have reset,” said Sury

Many sales under $500,000 are a result of the federal tax credit that has been expended under the economic stimulus plan. The credit is now open to existing homeowners who want to move up or downsize — but homes must be under contract by April 30 to receive the credit, $8,000 for new buyers and $6,500 for repeat buyers.

And it’s not just for move-up buyers. Sury is seeing long-time homeowners who want to downsize take advantage of the program to purchase something smaller, she said.

“It’s your tax money,” she said. “You might as well use it.”

Gary Miller a mortgage specialist with Century Bank, said there is an upward trend in mortgage interest rates from Wednesday’s average of 5.2 percent on a 30-year fixed rate loan. That means the first three months of 2010 brings a convergence of low prices, low borrowing costs and the tax credit. He tells potential buyers that it won’t last.

“It’s important to take action now,” he said.

Bruce Krasnow | The New Mexican

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