This development is good news for commercial real estate for two reasons:
- Commercial real estate improves as the economy improves (see NAR article on the subject)
- Improvement in residential market is a good indicator of a positive future for commercial real estate (as this Youtube video touches on)
SF home sales rise as the economy improves (Albuquerque Journal)
Home sales in Santa Fe are on the rise, reflecting a moderate improvement to the economy, according to second-quarter statistics released by the Santa Fe Association of Realtors on Wednesday.
“Budget sequesters and sluggish export growth have taken a back seat to housing recovery and stronger consumer spending,” states a report on quarterly indicators.
The data shows a 5 percent increase in the volume of home sales in Santa Fe County from $145.8 million during the second quarter of 2012 to $153.9 million during the same period this year.
Total sales of homes within the city limits mirrored that trend with a 4.4 percent increase from 183 to 191 homes.
Victoria Murphy, president of the Santa Fe Association of Realtors, said home buyers have been purchasing more homes in the county, chasing lower prices and favorable interest rates.
“Now, we’re seeing more within the city limits because prices and interest rates are so great,” she said.
Sales for homes in the county dropped nearly 11 percent, from 157 to 140, during the second quarter as compared to the same period last year.
The exception was Eldorado, which continued to see substantial growth. Home sales there increased by about a third and prices rose by 16 percent from an average of $300,000 during the second quarter of 2012 to $348,000 this year.
In all, the average price for homes in both the city and county rose 4.9 percent from $332,808 to $349,103.
The median sales price rose at a similar percentage rate from $287,250 to $300,000. The median price for a single family home within the city limits dropped slightly to $252,684, while a sharper drop occurred in the county down to $331,500.
Condo and townhome sales in both the city and county increased from 72 to 84 year-to-year as the median prices remained relatively steady, dropping from $285,000 to $280,000.
Residential land sales made a significant jump, both in the city and county.
“With inventories remaining low, buyers are now purchasing land on which to build,” Murphy said.
However, Murphy said home inventories could be increasing soon. The word is that banks have been holding on to foreclosed homes, creating what’s referred to as a “shadow inventory.”
Citing a report by Sandra Claymore, a financial advisor with the Bank of Albuquerque’s Santa Fe branch, Murphy said more of those foreclosed homes could soon be entering the marketplace.
“Everything is looking good economy-wise, and they’ll start releasing those foreclosures,” she said. “Being an in-state bank, they’re able to turn those around very quickly because the underwriters are local.”
The housing inventory has leveled off during the past year, dropping slightly from 2,340 to 2,335.
Murphy said a mild jump in interest rates may have slowed home sales a bit. “But with home prices gradually moving upward and inventories at record lows, we are beginning to see more sellers entering the market, and buyers reacting quickly to many of those well priced homes,” she said.
The numbers back up that statement. Homes are staying on the market a shorter period of time than they were a year ago. During the second quarter of 2012, a listed home stayed on the market an average of 205 days before an offer was accepted, compared to 161 days this year.
That continues the year-to-date trend, where homes stayed on the market an average of 211 and 210 days through the first half of 2011 and 2012, respectively, to an average of 174 days through the first six months of this year.
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