After an unusually cool June, we moved into an usually hot July with the cooling monsoons just arriving. Figuratively, however, Santa Fe’s summer season is off to a strong start despite the country’s general economic woes. The International Folk Art Festival reported record attendance earlier this month with overall spending down a slight 3% from the previous year.  The Santa Fe Opera has also enjoyed a good start with strong attendance.  In our world as real estate brokers, we are pleased to report that the real estate market is demonstrating its historic pattern of increased sales activity during the summer months although the increase in sales is coming off a multi-year low in the 1^st quarter of 2009.

As expected in the spring, our residential inventory increased as sellers positioned to market their homes during our stronger selling season.  While the overall average listing price/sq.ft. and the average Days on the Market have remained stable from the 1^st quarter, the selling price/sqft has continued to drift downward.

There were 252 more sales in the second quarter than the 1^st quarter 2009.  The average Days on the Market and List/Sale percentages have remained stable while average price per sq.ft. has declined approximately 5%.   When compared to total sales at the end of the 2^nd quarter 2008, sales this year are off approximately 35%.

Year Over Year Sales Comparison

2009 Year To Date 2^nd qtr to Year To Date 2^nd qtr 2008 Sales

With the increase in inventory, the number of months to absorb all properties on the market has increased approximately 28% as an average of the entire market.  It is important to note, however, that absorption rates differ depending on the price range.  The highest increase in absorption rate has been in the $1,000,000 – $2,000,000 range with an increase of 47%!

Residential Absorption Rates

2^nd Qtr 2009 – Santa Fe City and County

The increase in inventory, absorption, and diminished sales have generally resulted in falling prices (as measured by price/square foot) and falling list to sales ratios.  This can be seen in the activity in two popular areas:

2^nd Quarter Year to Date Comparisons – ’08 – ’09

As previously reported, the residential land market has been severely affected by the market downturn.  Inventory is down slightly from the end of the first quarter at 981 available parcels while only 60 parcels sold in the first two quarters.  If the rate of sales stays constant through out the year, this equates to an eight year supply!

Residential Land Inventory and Sales

Santa Fe City and County

01/01/09 – 06/30/09

Despite all the disappointing news in the above reports, those of us in the trenches each day are encouraged by the definite increase in showing and sales activity.  Positive indicators are emerging such as the number of showings having grown consistently in each of the past three months and a 60%+ increase in pending contracts when compared to June 2008 (for Sotheby’s International properties). Also pointing positively,  12 properties over $1,000,000 have gone under contract since June 1^st which is impressive when considering a total of 21 properties sold in the first two quarters of the year.

Clearly Santa Fe remains a very alluring and attractive community to reside in and many buyers know this is a very compelling time to buy.  It is also not necessarily unattractive for Sellers at the moment. Many may not do as well on the selling end as they hoped for, however, when they purchase a new home they can reap the benefit of lower prices.

As always we hope this market report is of interest to you.  Please let us know if we can assist you or your acquaintances with any real estate questions or needs!