"The last six years have tested and redefined real estate and homeownership."
Real estate is as American as apple pie. It’s been a part of who we are since the” Land Rush” of the late 1800s and early 1900s; this lea to the “American Dream” -- homeownership for all.
Las Vegas cab drivers were purchasing 2 and 3 investment properties. New homes were popping up any and everywhere and were selling before they were out of the ground. Everything was going according to plan until 2005. Housing had previously been unable to do no wrong until the so called invincible began to crumble and eventually break. The last six years have tested and redefined real estate and homeownership.
What does this mean for Santa Fe real estate, and me?
The Good: Traditionally the second and third quarters are when 60% of sales occur in our market. Houses are selling every day and buyer confidence continues to increase slowly. When sellers price their homes to market value (not 2007, 2008, 2009, or 2010 prices) they can sell their properties within 90-180 days. Affordability hasn’t been this low in decades, mortgage rates have hit a 2011 low, and significant choices exist for buyers. Bottom line: if you’re a buyer or seller and you have access to good data and information and a trusted real estate adviser, you can successfully buy or sell in this market.
The Bad: Home values will continue to decrease. According to Houseingpredictors.com, Santa Fe values will fall 4.9% in 2011. This is an average and based on the specific area where your property is located- it could be more or less. Distressed property sales will dictate how much your value has been/ will be affected. If you’re a non-traditional borrower ( i.e. you don’t have a 10 to 20% down payment, 2 years tax returns showing your financial ability to borrow, 6 months of pay stubs, and a credit score over 620), you’re going to have a difficult time getting financing. Knowledge is power, and having access to reliable real estate information will impact one’s ability to buy or sell.
The Ugly: Through May 2011, foreclosures and short sales have made up 26% of all residential sales in Santa Fe County. It continues to put significant downward pressure on property prices. The media continues to successful put fear into the public. It’s their job to sell newspapers and online subscriptions so it’s important to understand their agendas when reading their real estate stories. Nobody knows when we’ll come out of the recession and when the housing market will bottom and begin to rebound. If you’re in the market, stop trying to figure it out and start asking yourself what’s important about buying or selling.
Homeownership is headed back to what it was from 1950 to 2000. People buy a house to raise a family, live in a specific neighborhood or school district, and they understand it’s a long term hold. We’re advising our buyers to plan to hold for a minimum of 5 years and for up to 10 years. Housing is a basic human need and as traditional homeownership is reestablished, a stable market will emerge.
Until then, it’s going to be a roller-coaster recovery with plenty of ups and downs….