Santa Fe real estate continues to be a buyer’s market with a sales decline of 33% in the first quarter of the year compared to the same period the previous year. This is greater than the two preceding year’s declines of 26% each year. Dollar volume of sales declined 36% compared to the first quarter of last year, -$52,103,319. Average days on market increased by four days to 192. The first quarter is typically the slowest and lowest quarter of the year but usually is a fairly good indication of what to anticipate the next two or three quarters.

The Santa Fe areas I use for my sample are the city and near county areas adjoining the city including Eldorado, our largest suburb. This would include Las Campanas, La Tierra, Tesuque, Casas de San Juan (at the opera), La Cienega and all adjoining areas. All types of residential real estate are included – single family homes, condominium, townhomes, modular, etc.

Breaking the Santa Fe real estate market into price groups of <$500,000, <$1,000,000 and >$1,000,000 sales in units are comparably distributed in both first quarters with 67% under $500,000; 26% between $500,000 and $999,999 leaving 7% over one million, the luxury home segment. The largest sale in 1Q 2009 was $2,350,000 while in 1Q 2008 the largest sale was $6,150,000.

Vacationing tourists are often the future buyers of second and retirement homes once they have sampled the unique living we enjoy in Santa Fe. The experience of four real seasons in the high desert is exhilarating joined with over three hundred days of beautiful clear skies. Summer temperatures are mild with cool nights and highs in the 80′s. Our visitor counts are lower this year due to the economy and this is a precursor of sales this year.

Fortunately Santa Fe real estate did not have a housing boom like some of the markets on both coasts, Arizona and Nevada, so the level of these forms is less.

First a brief definition of each. A foreclosure is the process of the lender taking back the property from the owner because the owner defaulted on the loan and has by due process, recovered the asset. A REO is “real estate owned” a term used in the industry describing property that is owned by the lender and usually for sale. A short sale is usually a situation where the owner is still in possession of the property and has placed it on the market with the hope that a buyer will make an offer and the owner will then take it to the lender to determine if the lender will accept/negotiate the offer and remove their liability on the mortgage.

My definitions are simple and, I believe, accurate, but not comprehensive.

So, what does this mean for a buyer. Usually buying a home is somewhat complicated in the negotiation and transaction steps necessary to go to closing such as securing a loan commitment, reaching price agreement, closing date, inspections, etc. On top of this is the emotion involved in purchasing and selling a home that psychologists rank with divorce, death and other major life events. These new forms add more steps, longer process times, more uncertainty because the buyer is dealing with banks, lenders, etc that are business and have their own procedures in dealing with these situations, none of which appear to be streamlined.

Most of the situations I have read and heard about sometimes take a month just for the response from the other side.

As the economic stimulus becomes more clear, hopefully we will see procedures improved to make it less taxing on the buyer.