Santa Fe, the art and culture mecca of the Southwest, is recovering from the housing crisis at roughly the same rate as the rest of the nation. However, Santa Fe’s mix of luxury vacation homes alongside traditional housing makes the Santa Fe real estate market unique.
There are just under five hundred properties in some stage of foreclosure in Santa Fe. The number of foreclosure filings this July was 14% higher than June, but 37% lower than July last year. The number of foreclosures is roughly consistent with the national numbers, where the foreclosures in July were 2% higher than June of this year and 32% lower than foreclosure filings in July 2012.
In July home sales were down 5% from June and down 18% from July last year. However, home prices are forecasted to rise 9.1% over the next five years and the annual expected growth from 2012 to 2017 is projected to land around 8.9%. The average sales price is down from $385,000 last year to $379,000 currently.
So, what do these numbers mean?
In general, the Santa Fe market is recovering. The drop in average sale price suggests that most of the activity is occurring in the $300K and below section of the market. This excludes most of the luxury vacation homes, which tend to follow slightly different rules. In the sub $300K market, buyers are looking for a primary home and are generally on a limited time frame such as relocating for a job and needing to buy a home within a few weeks. These types of buyers are less likely to sit and wait for the perfect dream home and the demand for homes in this market have resulted in an increase in multiple bid selling situations; something the Santa Fe market hasn’t seen much of in the last few years.
Homes under $300K accounted for 31.5% of the Santa Fe housing market. However, while the midrange of the market is recovering, the sit and wait strategy is keeping the luxury housing market in Santa Fe relatively stagnant. This section of the market has recovered slowly, largely due to the ability of the buyers to shop around and wait for the perfect home. This accounts for the drop in overall average sale price: fewer luxury homes are being sold, while the mid-priced portion of the market is continuing to speed up. So, while the average sale price is down, it doesn’t represent a slower than expected recovery: it means that homes under $300K are now a larger piece of the market.
In November 2012 Business Insider ranked Santa Fe as one of fifteen cities that will see significant, above average growth in the real estate market over the next five years. The current state of the market bears this prediction out. There have been a few bumps in the road, but Santa Fe real estate is getting back on track.
If you have any questions about real estate transactions, foreclosures, mortgage modifications or the legal aspects of buying a home in Santa Fe, please contact Albuquerque Business Law and speak to one of our attorneys who specialize in real estate transactions. Our experts can help make your home buying or selling experience a breeze and legally airtight. Call or click today with any questions.