Home Sales Fall Short of Last Year
Santa Fe’s real estate market is in a lull, according to quarterly numbers released Wednesday.
So far this year, fewer homes have been sold and their median price has been lower compared to last year. Houses are staying on the market longer and the inventory of unsold homes is up.
That might be bad news for people whose jobs depend on the real estate market, but good news for people looking to buy a house — assuming they can get a loan, according to local real estate experts.
“Buyers definitely have an edge. They have an incredible choice of properties now,” said Mary Schroeder, presidentelect of the Santa Fe Association of Realtors Inc.
“People have in mind that it’s a buyer’s market,” said Emily Medvec, a broker with Prudential Santa Fe Real Estate. “But the question is if you’re a qualified buyer. Now it’s critical to actually go to a lender first, before you go into the (housing) market.”
The national mortgage crisis, sparked by failures of sub-prime loans, has given rise to many new regulations that make it more difficult for some people to be approved for mortgages, said housing professionals gathered at a news conference.
Those tougher requirements have raised closing costs on a home, according to Melissa Lawler, mortgage loan officer with Los Alamos National Bank. “Closing had been $3,000 to $4,000,” she said. Now those costs can run from $8,000 to $12,000 on some loans, she said.
Despite the downturn in sales so far this year, though, the housing professionals added that the Santa Fe market still is more robust than many other parts of the country, with no large burst of foreclosures or fire-sale prices on homes.
According to some of the statistics released by the Santa Fe Association of Realtors:
The median price of a single-family, detached home within the Santa Fe city limits sold through the first half of the year was down from $370,000 a year ago to $320,000. For the second quarter (April 1-June 30), the median price fell to $344,000 from $403,000 a year ago.
Trends have been similar in county territory in the Santa Fe area, where the median price so far this year has dropped from $519,000 to $494.000 from the same period in 2007.
Don’t assume that means that homes are losing value, though, warned Bill Keeffe, a real estate appraiser. It could just mean that more homes are being sold at the lower end of the market. When you look at a specific home, it generally is reselling at about the same price for which it was purchased two or three years ago, he said.
“My experience to date is that values have been f lat since the fourth quarter of ‘05, first quarter of ‘06,” he said.
Don’t expect home prices to fall much, especially if you want to buy a newly-built home, according to Michael Chapman, president of Chapman Homes. “This is the bottom. This is as good as it’s going to get,” he said. “You will not see prices come down much more.”
Inflation, international demand and petroleum prices are making building materials more expensive. New, more stringent building codes also may increase costs, he said.
“We are raising prices on all our products after the Hacienda Parade of Homes,” he said. That event occurs next month. Chapman said he has heard some predictions that new house prices overall will be going up 30 percent, but he estimated it would be more like 10 to 15 percent.
Fewer homes have been sold this year. Through June 30, 484 single-family homes have been sold in the city and county, compared to 733 at the same time last year. Chapman said housing starts — construction of new homes — also are down about 50 percent.
In the city and county, 2,204 homes are on the market now, compared to 1,882 last year.
How quickly a home sells may depend on how competitively it is priced. Keeffe said he recently studied homes selling in Eldorado and found that those listed within 2 to 3 percent of the selling price sold in less than six months, while those listed at a price 5 to 10 percent higher than the selling price took about a year to sell.
Schroeder said that she has seen sellers, especially in the last quarter, becoming more realistic about how much money they can get for their homes. “Sellers are much more reasonable,” she said.
Keeffe said that with more houses on the market, buyers can take more time to look around and make their decisions, as opposed to the hottest days in the Santa Fe real estate market, when a house could go under contract while another interested buyer was deciding on an offer.
Overall, “we’re still one of the stronger markets in the U.S.,” Keeffe said.
But Chapman said he sees some trends that worry him.
“We’re going to see some builders go down. We’re going to see some developers go down,” he said. “It’s just now beginning.” Employment is dropping in the construction industry, he said.
He said the county’s growth rate — which often has balanced out slowing growth inside the city limits — is only 1.1 percent. “That’s not near enough to sustain the economy,” he said. Recent figures from the city showed that the total number of jobs has gone down, but so has unemployment. That suggests, he said, that “jobs left town and people went with them.”
“Both of those trends,” he said, “are going in the wrong direction for a healthy community.”
