According to the Santa Fe Association of Realtors, through the first week of August, total sales in Santa Fe (city and county), including commercial, land and residential, were 947 units with an aggregate price of $467,628,000.
Compare this to the same period in 2007—not as strong a year as 2006--when Santa Fe sales totaled 1,513 units for $703,968,000.
The approximately 37% decline in both unit sales and prices from 07 to 08, according to many local Realtors, will not stabilize for another 6 to 12 months, or begin to improve until sometime in 2010.
It’s no longer a secret this is one of the most dismal real estate markets since the Great Depression. It’s also no secret, if you’re a buyer, that it’s one of the best. In Santa Fe, inventories in all prices ranges are historically deep, listing prices are still declining in many tiers, and “days on the market” (depending on the house and price range) can average over a year. The pessimism index is so high that contrarian optimists are as rare as three-toed sloths.
While fear of risk will deter many buyers, and lack of credit will hamper others, those who understand economic cycles and have the available capital are writing purchase contracts. Commercial activity in and around the Railyard is strong, for example, and upper end residential sales, while down from 07, are keeping the market relatively healthy. The latter is one reason the average home price year to date is $493,525, compared to $465,280 for the same period in 07.
There might be even more residential sales, however, if buyers and sellers realized how often they undermine their own transaction. Buying real estate is not like executing an order to purchase a stock, where you push a key and seconds later it’s done. For a buyer, acknowledging, and properly responding to, the emotions that a seller attaches to his house are almost as critical as the market data a seller consults to determine the listing (and ultimately selling) price.
For a seller, keeping emotions out of the negotiating process requires a steel-trap mind and, because we’re not made of steel, virtually impossible.
First, there’s the subjective translation of a frame-and-stucco house into a home of memories. It’s human nature (and not gender specific, contrary to popular belief) to associate happiness with habitat, and to believe the new buyer will experience a similar satisfaction when they purchase your home.
Second, while a seller may acknowledge “comps” for his neighborhood, and pricing and credit trends, doesn’t the potential buyer realize the value of the Sangre views from the bedroom, the remodeled kitchen, or the extra large lot?
Third, his friends have told the seller that his home, for whatever reason, is “irreplaceable” and how lucky a buyer will be not to have to look any further. It’s sometimes easier to believe what’s in our hearts more than our heads.
A smart buyer, either through his Realtor or directly to the seller, will acknowledge the importance of the subjective opinions of the seller. This creates a bond of respect, even trust, making numbers negotiations a lot easier. Too many buyers (and now this can be gender specific) treat a house purchase as a matter of cold, hard numbers. They go out of their way to let the seller know all of the home’s deficiencies and faults to justify their price. The number of sellers who are turned off by such perceived callousness, and walk away from what is otherwise a market-supported offer, is hard to measure but stories are numerous.
Conversely, when potential buyers are conscious, courteous and respectful, many sellers become more mindful of the buyer’s point of view. Credit is tight, considerable risk is involved if a buyer hasn’t yet sold his own house, and nobody is sure where the market is headed. Uncertainty is shared by both parties, so everyone is taking a chance and no one feels like a victim.
In the future, whether you’re a buyer or seller, in addition to using a Realtor, title company, surveyor and inspector, it may not be unwise to spend an hour with a psychologist. The art of letting go, as well as the psychology of acquisition and debt, help guide us through life.
Susan Hadley is the Owner / Broker of Santa Fe Realty Group Inc.
Ph. - 505-986-9077
Cell - 505-660-3633
Fax - 505-986-8996
susan@susanhadley.com
www.SantaFeRealtyGroup.com
