SANTA FE SHOWING STRONG MARKET INDICATORS; FENCE-SITTERS ENCOURAGED TO BUY THIS YEAR BEFORE AFFORDABILITY BECOMES AN ISSUE
Reports on the Santa Fe housing market published this month by CBRE and the MLS show that Santa Fe buyers and renters present strong demand. Rental vacancies have dropped below 5% despite a wave of new units that were completed in 2014.
Rents are rising with an average rent of $817, reflecting an increase of $34 over the prior year. Continued strong occupancy indicates a worsening supply/demand imbalance. The reporters noted that the Santa Fe apartment demand is stronger than seen in many years. Likewise, the available affordably priced homes for sale have a reduced time on the market, down to pre-recession levels, hovering around six months. Santa Fe unemployment declined in December to 4.9% and is well below Albuquerque (6.4%) the statewide average (6.1%).
What do these numbers mean for our clients who are in the market to purchase a new home? I think it shows that homebuyers may have more confidence in purchasing homes. Perhaps there is a general increased sense of employment stability or that recently sold homes have been more appealing than in the years of economic downturn. To homebuilders and sellers it means that demand for their product is stronger. They often infer that pricing should be increased. It may also imply that the supply of homes for sale is diminished.
I think the strong market report is good news for Santa Fe in general. While our buyers appreciated the opportunities for bargain sales over the past few years, they were also nervous about committing to the prospect of buying a house they might not be able to resell without losing money. A balanced market is better. The decision to purchase a home is easier when the surrounding neighborhood is filled with other stable homeowners instead of vacant homes and for sale signs all around. There are still plenty of modestly priced homes on the market – especially in the southwest sector. This inventory is priced well below the original cost, but that supply is dwindling. Interest rates continue to remain at record lows, so fence-sitters should purchase this year before affordability becomes a greater issue.
Sharron Welsh, Housing Trust Executive Director