All Posts from Walker
The Latest Santa Fe Real Estate Update: Land Sales Skyrocket
One of the lingering and unwanted effects of the Fed’s quantitative easing program and artificially low mortgage rates, as I wrote here, is the current existing-home supply shortage. This effect kicked in only after the Fed began to raise rates and mortgages topped 5.00%, and will likely persist as long as rates are at current levels. Santa Fe is not exempt, of course. Sales volumes are well off their highs, though November saw a bit of an uptick.
The Santa Fe Association of Realtors (SFAR) publishes monthly volumes for a region that includes Santa Fe proper and the outlying areas (such as the northwest) that we consider part of town. In November 2023, we saw a 3.22% increase in transactions versus November of 2022. With the exception of June 2023, which saw a 15% increase versus the year-ago period, volumes are off.
Is November the beginning of a rebound? It’s too early to tell. It is likely reflective of the respite from 8% mortgage rates that’s come as treasuries staged a strong rally, after a selloff in the months before. The next few months will tell.
Land Sales Continue to Climb, as Expected
Bare land sales continue to skyrocket. Why? Builders across the country are racing to fill the supply shortage of existing homes, as homeowners are reluctant to leave cheap mortgages behind. I wrote about that here. November 2023 in Santa Fe saw a 122.22% increase in new land sales, following on the heels of a 20.58% rise in October. Land sales started to turn around in May of this year and with the exception of August, the trend has been higher. Will it continue? There’s no way to know, but the demand appears to be in play to make it possible. If I were a betting man, I’d say yes.
Building a Custom Home as a Long-Term Strategy
With supply severely constrained in the existing home market, there’s lots of reasons why lot sales might continue to climb and indeed, building a custom home on a newly purchased lot, for those with a long time horizon, may be a smart strategy. You get exactly what you want, you don’t have to wait six months for the right home to come along, and your home’s gleaming and newly minted.
Ski-State Smackdown: Skiing as a Local in New Mexico and Colorado
I’ve been a local in both places.
Spoiler alert: It’s better in New Mexico.
Skiing is a different deal when you live close to your local mountain. And when you compare the skiing experience for those who in northern New Mexico to what people who live along the Front Range have to deal with, it’s not even close.
Colorado: Heavy Population, Less Favorable Geography, and Traffic
Colorado’s geography is unique in that the eastern half of the state is flat plains and farmland, the western half mountains. And smack down the middle of the state runs the Front Range, where the western mountains meet the eastern plains. 90% of the state’s population lies there. And if you want to travel west into the mountains, it makes for an interesting situation. If you live in Denver, Boulder, Golden, or even Colorado Springs (to a lesser extent), there is basically one route in to the mountains: via I-70 or Colorado 6 (they follow roughly the same route into the mountains) through Glenwood Canyon.
Now let’s look at population: Denver is just down the hill from where I-70 drops into Golden, with a population of 3,000,000 souls. Boulder, about 30 minutes north, has 100,000 souls (well, arguably in Boulder there are no souls per se, but that’s another matter). Golden is nestled at the foot of the mountains with about 25,000. Within a tight geographical area you’ve got at least 3,125,000 people. And people in Colorado love their mountains and love to play in them.
Since there is a single route into the mountains for three million people to boogie over to Winter Park, Arapahoe Basin, Copper Mountain, Vail, or Breckenridge (these resorts are all bunched together within roughly the same region), nightmarish, epic, world-ending traffic is the result. I-70 is a parking lot at 10,000 feet. In the winter.
Gracias, pero no.
A light day on I-70 near Vail. Multiply this by three for average traffic.
Colorado locals know that if you plan to head to one of those resorts in winter, you’re looking at a two-and-a-half hour haul, minimum. More likely, that drive metamorphoses into a four-hour grind because of the inevitable traffic backup at the Eisenhower tunnel, which crosses under the continental divide at 11,150 feet. So if you live in Denver or Boulder and you just want to “go in” for the day, you gotta do some serious planning. Like, get out the spreadsheets. There, folks are very often forced to rent a condo or stay at a hotel for a couple of nights, because the drive’s just too much to deal with. So what was a $110 ski day turns into a $1,400 weekend. For a local. Yes, there’s a resort up the hill from Boulder called Eldora and it’s a charming little hill; but even Eldora gets absolutely overwhelming traffic from Denver.
Unless you own a place in the mountains in Colorado, skiing is, in point of fact, a pain in the rear. It’s a poorly kept secret.
New Mexico: Lightly Dispersed Population, More Favorable Geography
Let’s contrast that to what it’s like if you’re in Santa Fe or Taos. New Mexico is a lightly populated place, thank God. When you move here from somewhere else or come back after having lived somewhere else, you’re immediately struck by how much breathing room there is. And this makes a difference in the winter. New Mexico’s largest city is Albuquerque, which is an hour southwest of Santa Fe, with a population of 560,000. And Santa Fe is home to only about 80,000 souls. That’s pretty much it for the entire northern part of the state. 650,000 people or so.
Yours truly and the niece and nephew at the base area in Taos
The northern part of New Mexico is sprinkled with ski resorts: Ski Santa Fe and the venerable Taos Ski Valley are the most well-known. But tucked into the Sangre de Christo and Jemez mountains are Sipapu ski area (north of Santa Fe and east of Trampas, on the east slope of Sangre de Christos on New Mexico 518), Red River (north of Taos and west of Cuesta on New Mexico 38), Pajarito (Spanish for ‘little bird,’ just up the hill from Los Alamos, off New Mexico 502), and Angel Fire (east of Taos on New Mexico 64).
Different routes to each one.
Less than 20% of the population + more favorable geography + quite a bit of skiing capacity = an entirely different skiing experience.
Somewhere on the backside in Ski Santa Fe
The Laid-Back Local Ski Routine of Santa Fe and Taos
What’s the ski routine when you live in Santa Fe? Well let’s assume you’ve packed your stuff the night before and you’re headed to Ski Santa Fe. You wake up, drink coffee (do not omit this step), hop in the car, head up Ski Valley road, park, walk to the lift, mumble something to the liftie, and hop in the chair. If it’s a normal day, you’ll be looking at your ski tips in 55 minutes. In fact, it’s so easy that just taking a half a day, driving down, having lunch at The Shed, and enjoying the afternoon doing something civilized is a viable approach to a Saturday.
If you’re headed to Taos, add an hour each way. If you drive from Santa Fe up the Rio Grande canyon on New Mexico 68, it’s about a 70 or 80-minute drive, even in winter. When I roll into Taos, I typically stop at World Cup Coffee for a latte and some convo with the local hippie types before I head up the hill.
World Cup in Taos
Then I park, hop on the shuttle, head down to the lift at the bottom of Al’s run, and up I go. Two hours from entering the car to climbing on the lift chair at Taos Ski Valley. And it’s a lovely drive to boot, with little traffic.
A carved up Kachina peak at Taos Ski Valley
So, for locals in New Mexico, the attraction of winter sports is that they remain accessible, uncrowded, relatively inexpensive, and fun. Along the Front Range, some percentage of 3,500,000 people drives into the mountains via a single route every weekend. In Santa Fe, some percentage of 650,000 people drives into the mountains via several different routes, in a dispersed fashion, every weekend.
It’s not at all the same.
Taos Ski Valley is well known as a challenging, steep mountain with some great high-altitude ridgeline skiing. And Ski Santa Fe is a wonderful hill with some great runs, and great local flavor. All of the northern NM resorts have their own character. But that’s not the point. If you want to be able to ski or board and concentrate on actually doing that rather than sitting in traffic for four hours and getting elbowed by an irritable portfolio manager from New York who forgot to take his Zoloft, come to Santa Fe.
It’s just better here.
On the way up the triple chair at Ski Santa Fe
Vőlkls are for locals
Setting Pricing in The Top End of Santa Fe’s Residential Market
About a week ago, I hauled off in search of data on the luxury end of the housing market in Santa Fe as a sort-of self-imposed homework assignment.
At the top end of the market in Santa Fe (let’s define it for now as $3MM and above) property pricing can be an interesting exercise because of scarce data. Why? Many sales at the top end take place confidentially, to one degree or another. Some transactions are effected off the MLS system altogether, are not listed, and are not reported publicly. Other listings are visible only within a single firm. Privacy concerns typically govern this: sellers may not want their motive disclosed and buyers may not want prices known.
Less Consistent Price Appreciation
In my search for data, I went back to 2017 to look at the category of the luxury market to track price appreciation to the present. That’d surely be supportive to my pricing thoughts because I’d show steady appreciation for the high-end category, just like in the rest of the market. Right?
Not really.
From the beginning of 2017 through October 18, 2023, the average home price for the luxury category (again, over $3MM) increased by a total of 22.50% (depicted via the orange bars and adjacent values below). Compared to the rocket-like increases in the rest of the market, this level of price growth seemed tepid.
So I looked at a few other measures.
Sales volumes (in blue) seemed to increase at a normal clip, from eight homes sold over $3MM in 2017 to 33 in 2022, with what looks like a bit of a slowdown this year. The time it took for these properties to sell (average days on market, in grey) declined steadily. A decline in average days on market is usually a bullish measure. And the oft-abused (in my opinion) indicator of price per square foot (the yellow line at top) grew by 43.68% during this period, to land at $792.61. Overall, it’s inconclusive.
But it can’t be ignored: the top end of the market has not behaved like the rest of the market, with less crazy-insane appreciation over the past few years. At a minimum, it points to a need to be extremely careful in setting prices in the luxury market, where data is scarce.
So I looked at inventory.
Relatively Greater Inventory at the Top
Recently, inventory at top end has remained steady and has decoupled from the tight supply in rest of the market. In relative terms, it’s plentiful. (I wrote here that high rates are constraining supply for the middle of the market; those with low-rate loans are staying put.) Owners’ finances at this level aren’t tied to mortgage markets and they are much freer to move or sell when they desire, resulting in more normal inventory.
Anecdotal observations support the conclusion that there is at least adequate luxury inventory: MLS listings in Santa Fe are plentiful from $3.5MM to $25MM right now. Data supplied by the Santa Fe Association of Realtors (SFAR) to Sotheby’s shows that at the end of Q3 2023, we had 92 single-family homes and condos over $2MM (this is simply their break point) on the market. At Q3 2022, that number was 87. Normally, the high-end numbers are perhaps a smaller proportion of total inventory. Read the full Sotheby’s market report here.
What’s ahead?
Steady inventory at the top end of the market makes properly researching a pricing strategy THE critical component to a quality execution — as luxury sellers seek to exit their homes in a reasonable period of time. Very often, it’s tempting to set prices in this category by the “this is what I want for it” method or the “wouldn’t it be nice if I could get X for it” method. Right now, the data I see on the luxury market in Santa Fe does not support that. Rather, it supports the practice of setting asking-price levels just above where one wants a transaction to take place and sticking to one’s guns in negotiations.
The decoupling we see in the market means that the top is not behaving the same way the rest of the market is, so well-researched strategies and prudence are warranted.
Video: To Understand Real Estate Markets in Santa Fe, Look to the Bond Markets
I wrote the text version of this article a couple of weeks ago, and recorded this video on Sunday, October 15. Since then, the case I make in this piece is even more true, with the 10-year U.S. Treasury (off of which fixed-rate mortgages are priced) now at an intra-day level of 4.99%, which is a huge move from last week’s close around 4.63%.
Ironically, this holds some good news for homebuyers. While mortgage loans are more expensive, the high rates we see now are limiting supply and driving price increases even in the face of declining demand. As long as high treasury yields are in place, we might expect stable and increasing prices in most segments of the real estate market in Santa Fe. And we could be in for an extended period of high rates. Again, this may seem like bad news — but its effect on prices is a BIG positive for homeowners and homebuyers.
An Unwitting Mentor
He used to call me “parasite.”
And I loved that. It felt like he was fond of my presence but also found me a bit irritating and flea-like. Eventually I started calling him “Hostess.” The thing Jim Rowley does not know to this day (alas, I’ve been unable to find him, despite some digging) is that he was an enormously positive influence on me and on my family.
From the time I was six or seven, I swam on one of Texas’ AAU (the predecessor to US Swimming) teams, Houston Swim Club. Somewhere around 1975, we got a new coach, a guy named Gene Shumway, who is now something of a legend in Texas swimming. Gene is an ex-Marine. At the time, his real job was flying DC-9s for Texas International, Southwest Airlines’ (then) main competitor. Gene developed us into a very tight-knit, close, extremely competitive group. Gene was super tough. After a while, we got fast and started winning. And during this time I apparently latched onto Jim.
Rowley was three years older than I was. I think I idolized Jim because he was funny, witty, smart, happy, a very good swimmer, got along with everyone, and had these cool passions. As his parasite, I got swept away in some of that. At just 15, Jim was an accomplished Beatlemaniac. And his love for the Beatles very quickly took root.
In 1975 and 1976, you could turn on the radio in Houston, tune it to 104 KRBE, and you’d hear The Beatles’ Hey Jude, which was still (after six or seven years) at the top of the charts and played incessantly over the airwaves. Rowley eventually took me down to Sound Warehouse, where I bought my first LP, The Beatles White Album, on white vinyl. I still have that copy (above). Of course, Jim dutifully played Revolution 9 backwards for me so I could hear the sinister messages of “Turn me on, dead man,” supposedly about Paul McCartney having died, which of course was just the product of Beatle fans having too damn much time on their hands.
So Jim introduced me to the Beatles and that eventually morphed into a lifelong love of both that band (with its never-to-be-equaled abilities) and of music in general. So with that $16.99 purchase of the White Album, my days of vinyl hoarding began. Just for grins, a few other titles are below.
But it wasn’t just music. Jim was an avid road cyclist. In the mid and late 1970’s in the U.S., this was downright eccentric. This was before the 7-11 team, before Andy Hampsten, before Greg Lemond, before the USPS team, before Mr. Doping Cheaterhead, and indeed, before cycling was well known in the U.S. at all. But there was one very cool bike shop in Houston called Daniel Boone Cycles, and Jim took me there many times. I remember looking up at the racks and racks of racing wheels and thinking how cool it all was. Later Jim donated an old (1971 or so) Raleigh frame to the Stewart cause. That frame was wayyyyy too big for me but it was enough to get my brain spinning. I rode a little in high school, and when the chance came to do a touring trip up around Lake City, Ouray, and Montrose in Colorado, I hopped. And by 1981, I was hooked. Cycling became a lifelong passion.
The point, as you may have gathered, is that to this day, Jim likely has no idea whatsoever that he was such a huge and positive influence. I’ve realized, in my dotage, that this is probably very common. All you have to do is think about it. There are, for example, a few former colleagues at Thornburg Investment Management whose critical thinking abilities (not quantitative skills, I note) I was able to emulate and adopt. I recall many quarterly meetings in which two of the portfolio managers and I discussed possible themes to write about in our commentaries. Invariably, we would settle on carefully and gingerly putting forth a theme that was fully supportable by events and data. And it was that kind of thinking that allowed me to make this analysis of Santa Fe real estate markets’ behavior being a reflection of events in the bond markets – without making fundamental errors in the argument.
My point is not to draw attention to myself, but to throw a little light on a reality. If you accept that there are at least a handful of people who have unwittingly and unknowingly influenced your life, it’s also likely that you have done the same for a few people too. You may never know about it, but it’s probably true.
I think that’s a cool reality to ponder.
Santa Fe Neighborhood Focus: Las Campanas
City-and county-wide sales data are instructive, but sometimes it’s helpful to focus on a discrete area of Santa Fe. In the case of Las Campanas (the sprawling area northwest of town where a large proportion of Texans have homes), a healthy adjustment and recovery is underway. As our office’s Linda Varela (the real-estate statistical overlord) wrote, “The stats for Las Campanas are not scary.”
A Credit-Driven Slump versus a Rate-Driven Adjustment
Way back in 2010 and 2011, they kinda were scary. This was in the wake of the great financial crisis (portfolio managers call it the GFC). And the GFC was a credit-driven event. We saw a high proportion of homeowners in 2006, 2007, and 2008 qualifying for loans that they should not have been able to get into, and when the slowdown hit, Las Campanas suffered. I remember being here in 2012 and hearing of foreclosures having happened even in the high-end homes in Las Campanas, and indeed, if you look at volumes for 2010, it’s evident in the numbers. 2010 sales volumes were just 52.9% of their 2008 high.
Happily, Las Campanas recovered and is in a strong position; the recent rate-driven adjustment (as opposed to 2010’s credit-driven slump) has been quite modest and driven by different factors.
Annual Las Campanas Home Sales and Prices, including the Year-to-Date through October 11, 2023
The Beginnings of a healthy Bounce
Year-to-date sales volumes through October 11 are already at 60.3% of their total for all of 2021. So with the addition of three months’ worth of sales, the area is on track to surpass last year’s numbers, perhaps hitting levels similar to 2019’s. This milder sales adjustment versus what we see in the rest of the city is likely because in this segment of the market (well over $1MM average price), a large proportion of sales take place on a cash basis.
Given the greater supply in the top end of the market, a bit of a down tick in prices has happened, though it’s modest. Mean sales prices are off 2021 peaks by just 2.4% and the median (the midpoint) off 7.7% of the 2021 peak. This is quite manageable, frankly, and simply reflective of greater liquidity in supply at the top end of the market — a healthy thing.
Santa Fe Residential Real Estate Prices Climb, Even as Volumes Drop
On September 21, I wrote here on residential sales volumes in Santa Fe, which stand at about 70% of their 2020 and 2021 highs. It’s straightforward; higher rates have cut into local sales by roughly 30%. But prices have reacted to higher rates in a way we don’t normally expect. Usually, with 30% lower volume, you’d expect prices to fall. Instead, the opposite has happened. Depending upon which number one uses, single-family residential prices have exceeded 2021 highs by 17.2% to 23.8%.
Weird.
Single-Family Sales Volume Review:
Q3 2021 Closed Sales: 563 units
Q3 2022 Closed Sales: 425 units
Q3 2023 Closed Sales: 378 units
Here, the Q3 2023 figure is 67.1% of the 2021 high.
Now let’s look at average price data for the same time frame. (Note that Sotheby’s International Realty presents a median figure and what they call an “average” figure, which is a mean. For a given data set, of, say, 41 things, a median is simply the midpoint, with 20 data points above and 20 data points below. The “average” as Sotheby’s calls it, is the sum of all the prices in the data set, divided by the number of units in the set. It’s a mean.) Both numbers are instructive.
2021, 2022, and 2023 Third-Quarter Price Comparison (using the mean):
Q3 2021 Mean Closing Price: $790,000
Q3 2022 Mean Closing Price: $880,000
Q3 2023 Mean Closing Price: $926,000, or 17.2% higher than Q3 2022
If one looks at the median (again, simply the midpoint), things are similar.
2021, 2022, and 2023 Third-Quarter Price Comparison (using the median):
Q3 2021 Median Closing Price: $581,000
Q3 2022 Median Closing Price: $660,000
Q3 2023 Median Closing Price: $719,000, or 23.8% higher than Q3 2022
Volumes have dropped by 32.9%, and prices have climbed by roughly 20% during the same period. This weird situation, as I wrote here, is due to the mortgage-rate-lock-in effect. My expectation is that with continued higher mortgage rates (not a certainty, by any stretch), we’ll continue to see diminished supply and stable prices.
Median and Mean Sales Prices Climb, Even as Sales Volumes Drop
Read Sotheby’s full third-quarter market report here.
Five Reasons Not to Hike Santa Fe’s Aspen Vista Trail in October
- You Loathe the Color Yellow
This is often cited by many local hiking groups as the principal reason they avoid Aspen Vista. For the nation’s many haters of the color, it is reputed to be a terrible experience, with many complaining of having seen virtually nothing but yellow until they climbed above 10,500 feet, and some even vowing to report the offense to the county. Even those who have covered their eyes for the first 1,000 vertical feet have complained that when in the higher elevations of Spruce and Fir, the vast groves of revolting yellow Aspens were visible from the top. Some of those hikers even reported seeing orange, which they hold to be an affront.
2. You Prefer a Grade of 23% and Piercing Back Pain
If you’re up for a difficult, painful, rocky climb with scary scrambles, annoying climbers with ropes yelling annoying things to each other in Greek, and debilitating knee and back pain, Aspen Vista is not optimal. The trail, a maintenance road for vehicles to reach the antennas atop the 12,200-foot Tesuque Peak, has a gentle grade. If you must suffer, it’s likely that Aspen Vista’s relative ease means a barefoot sprint up Baldy with no food or water is best for you.
3. You Want Your Dog to Have a Horrible Day
If you are committed to the idea of leaving your dog at home to stare at the fireplace, you may want to avoid this, one of the best doggie trails in the Santa Fe area, and instead sit in a climate-controlled chamber at 7,000 feet. Several local canines (male and female) interviewed for this article have stated that the many conversations they have had up and down Aspen Vista’s 7-mile length constitute the finest doggie social hour in New Mexico.
4. Lunch at the Lunch Rocks Seems Ridiculous
If your hiking party would prefer not to have the perfect place, approximately four miles up the trail, to divert a bit and enjoy a nice picnic lunch or snack on the way to the top, this should be stricken from your lists. Other hikes, such as Lake Peak, may make it harder to find an easy, beautiful, airy, open place for a break, and if you’d prefer to be dehydrated because you can’t find a place for a decent break, those are better options.
5. You Loathe the Idea of Achieving a Goal and Can’t Stand Strolling around atop 12,200-foot Tesuque Peak
Since Aspen Aspen Vista leads gently to the top of 12,200-foot Tesuque Peak, it is highly unpopular with New Mexicans (and even some Texans) who can’t stand the idea the amazing views and the feel of the brisk Alpine breeze at the top. If you are a member of this group, you may indeed prefer to stare at the fireplace, and let your friends show you summit videos and photos from their phones upon their return.
To reach the Aspen Vista trailhead, head up Ski Valley Road 12.6 miles from the stoplight, and drive past the Big Tesuque trailhead on your right. Shortly after Big Tesuque, you’ll reach the Aspen Vista trailhead, where there’s a decent sized parking area and restrooms. The trail departs from the far side of the metal auto gate. For an extra treat, park at Big Tesuque and hike up that streamside trail, which is a bit steep in spots but which intersects with Aspen Vista after about ½ mile. Note that Aspen Vista has no water along its stretch after it crosses Tesuque creek, so you’ll need to pack a liter or two and some snacks for the 11.6-mile round trip.
More photos:
To Understand The Real Estate Markets in Santa Fe, Look to The Bond Markets
On August 15, I wrote here that the odds of mortgage rates falling over the next several months were probably not as good as their going up. On that day, the 10-year U.S. Treasury note closed at 4.22% and I wrote that it might well rise to 4.75% or 5.00% with no input from the Fed. Well, I got lucky. That’s exactly what’s happened.
Now I’d like to try to tie together what’s happening in the bond markets to what’s happening in Santa Fe’s real estate markets. With the 10-year now having closed Wednesday at 4.72%, the average 30-year mortgage now lies around 7.83%, according to Bankrate.com. Without the Fed having done anything, mortgage rates are markedly higher than they were two months ago — all because of a monster bond market selloff.
Now let’s look at a couple of metrics from the Santa Fe housing markets. The Santa Fe Association of Realtors just released a report on sales volumes and prices for the third quarter of 2023. For Santa Fe County, the number of transactions versus the year-ago quarter was down 11.6%. But the median price versus the year-ago quarter was up 9.2%.
Why? As I wrote here, homeowners who have existing mortgages of 4% or below aren’t exactly inclined to hop into a mortgage at 7.83% so they can move and get a bigger bathroom. This has dramatically limited supply of existing homes. Especially around the median sales price, where most buyers take out mortgages, I might expect there to be tighter supply in Santa Fe and for prices to continue to climb, though not to skyrocket. It’d be a reasonable interpretation of the data.
For the moment, this is good news. And anecdotally, we have seen that there is proportionally greater supply in the top end of the market, and that it hasn’t been whipsawed as much by bond markets. That’s a good thing. That market is functioning quite normally.
Today’s higher 10-year Treasury yields have a direct effect in limiting housing supply and supporting prices. Hasn’t always worked that way! So, if you want a peek into what may happen in Santa Fe housing markets, look at this table fairly often.
Mom’s Pearls of Wisdom and The Lebanese Food Truck
I flew 615 miles to walk across the street to a food truck with my mom.
Well, not really. I flew down to Austin to visit her. She’s 85, and lives just north of Austin near Round Rock, where my sister can keep close watch on her.
What’d we do? We walked to a food truck. Twice. That’s about it. And we did a lot of talking. Mom calls the sayings that emerge from these counseling sessions, endearingly and a little annoyingly, “pearls of wisdom.” I’ve gotten a lifelong dose, needed or not.
Margaret Stewart practiced real estate in Houston between 1978 and 2018. She worked, in the beginning, for a company called K.L. McGuirt and Company. The first pearl of wisdom came from Mr. McGuirt, who counseled his agents: “Always out-nice ‘em.” Mom has told me that he was referring to times when things can get touchy, edgy, even a little unkind in a deal. Mr. MGuirt’s axiom was meant to convey that if you can’t accomplish something in this business while remaining kind, he probably didn’t want you working for him.
I don’t blame him.
A second pearl: “Listen more than you talk.” This is easy for me because I don’t talk a whole lot anyway. The beauty of it is that the more you listen, what you eventually do say will have that much more value. It really is that simple. The third: “Watch body language.” Most of us do this instinctively as a threat assessment. But it’s so easy to get caught up in events and forget to focus on this, which is probably the most effective way to anticipate events: watch what people are doing. I’ve learned this is, in fact, a very respectful act. Not doing so is the opposite.
The fourth of the pearls is one I’ve amended: “Always be prepared.” My modification (admittedly aspirational) is to insert “more” after “be” and “than anyone else” after “prepared.” Always be more prepared than anyone else. Yes, sometimes you have to force yourself to do the preparedness homework. Discipline plays a role.
Two Blocks to Felafel
One thing for which I’m seriously thankful is the ridiculous felafel sandwich from the Beirut food truck, a mere two blocks away — easily the best felafel I’ve had. In fact, it was so good was it that I dragged mom down there two nights in a row. The walk was admittedly a very slow saunter, but there was ample time for a pearl of wisdom or two.
Land Sales in Santa Fe Show a Significant Uptick, but Remain Below 2021 Highs
Yesterday, I reported on the overall health of the Santa Fe residential real estate market, comparing the average monthly sales volume for the year through August to the same period at the 2021 peak. I noted that 2023 year-to-date sales were at 69.4% of their 2021 peak. Roughly the same thing holds true with land sales.
Through August 2023, at an average of 27 lots a month, land sales are at 60% of their 2021 average of 45 units, though there has been a significant uptick in the past four months.
January 2023: 52.3% of the 2021 high
February 2023: 50.0% of the 2021 high
March 2023: 44.2% of the 2021 high
April 2023: 40.0% of the 2021 high
May 2023: 65.3% of the 2021 high
June 2023: 78.5% of the 2021 high
July 2023: 70.0% of the 2021 high
August 2023: 74.6% of the 2021 high
Again, note the upswing versus 2021 in May, June, July, and August. We are definitely seeing an acceleration versus earlier in the year, which, as I wrote here, may be due to the lower supply of existing homes.
How Healthy Are The Residential Real Estate Markets in Santa Fe?
The Santa Fe Association of Realtors (SFAR) releases a monthly report of residential sales in and around Santa Fe. On occasion the numbers are instructive. The year to date through August 2023 is one of those periods.
I’ve noticed that almost all people (realtors included) tend to view the health of the markets pretty simply: how far off market highs are we? So let’s take a look (these sales volumes include single-family, multi-family, condominiums, and townhomes, but not land):
For the year to date, residential sales volumes average 69.4% of their 2021 peaks:
January 2023: 72.4% of the 2021 high
February 2023: 61.3% of the 2021 high
March 2023: 72.1% of the 2021 high
April 2023: 68.7% of the 2021 high
May 2023: 67.1% of the 2021 high
June 2023: 78.6% of the 2021 high
July 2023: 64.9% of the 2021 high
August 2023: 69.7% of the 2021 high
This may seem like bad news, but it’s certainly not for sellers. Because of the contraction in supply touched on elsewhere in this blog, prices have remained steady and indeed have continued to climb. Transactions are simply more balanced than during the heady 2020 and 2021 days, which were distorted by extremely low rates and effects of the pandemic. In effect, the market is healthy, but 2/3 its previous size.
