The Santa Fe, NM real estate market is the best I’ve seen in my 25+ years for buyers—whether you are looking to buy a home for your family, or as an investment. Here’s why:
Interest rates are still near 40 year historic lows.
Inventory of homes and investment properties are abundant.
Prices have bottomed out! This is not only my own observation. The Santa Fe Association of Realtors 1st Quarter 2009 report reflects that single family and condo median prices show a modest gain while sales drop in both the city and county. “We are beginning to see a very modest increase in home values compared to last year during the same period for City homes and condos, but sales remained slow,” stated Mary Schroeder, 2009 President of the Santa Fe Association of REALTORS. “Sales and values in the County appear to be stabilizing with sales off a smaller percentage and values by only 8%. Our March data was the strongest and more on track with 2008 home sales data. I think we’re beginning to see some positive momentum in home sales. …There are real bargains in every area of Santa Fe (sic) with a great selection of homes to choose from”.
Affordability. The National Association of Realtors reports that pending home sales have edged up. “NAR’s Housing Affordability Index rose 0.9% percentage points to a record high of 173.5 in February, 2009 from an upwardly revised index of 172.6 in January, and is 36.3 percentage points higher than a year ago. The HAI, a board measure of housing affordability using consistent values and assumptions over time shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking begain in 1970.”
The economic downturn is temporary. But you can be sure that when it begins to stabilize, the two BIG factors in purchasing a home: prices and interest rates, will increase.
Buying for investment is a little different than buying to live in. If you are investing, make sure you work with a professional Realtor who knows the local market, and invests in real estate themselves. Then, take the emotion out of the purchase. Worry about the age of the roof, appliances, furnace, water heater, etc. as well as the type of construction to determine what kind of building maintenance would need to be done. Don’t worry about things such as how the the back yard looks from the window above the kitchen sink. Analyzing investment property is much different than for a full-time residence. It more or less boils down to your rate of return, as opposed to what similiar properties have sold for.
In the case of purchasing a home in Santa Fe, you should have your Realtor provide you with comparable sales that have recently sold so that you are aware of values and do not bid or purchase an overpriced home.
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Santa Fe pending home sales
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