Area home prices fall in first quarter

Bob Quick | The New Mexican

4/9/2008 - 4/9/08

Santa Fe home prices fell in the first quarter of 2008, with the median sales price down 15 percent in the city and 7 percent in the county.

The decline mirrors the national trend as demand weakens and credit standards tighten.

"Price reductions occurred in every market area of the city and in the southwest area of the county," a Santa Fe Association of Realtors statement said.

Local real-estate analysts have long noted that Santa Fe home sellers were reluctant to reduce asking prices. That was because of the strength of the Santa Fe housing market, which has generally kept rising, rewarding those who held out for top dollar.

However, Wednesday's statement quoted Baro Shalizi, president of the Realtors group, as saying: "Sellers responded to increased home inventories in the Santa Fe area by reducing prices during this quarter."

In comments at a Wednesday news conference, Shalizi said the lower prices do have the advantage of "giving a new segment of the market the opportunity to buy in the city of Santa Fe."

Within the city of Santa Fe, the median sales price in the first quarter of 2008 fell to $301,500, down from $354,125 during the same period a year ago.

The last time the median sales price in the city was in the $300,000 range was in the first quarter of 2005, when the figure stood at $298,500. A year later, the median came in at $308,000 in the first quarter of 2006, and by the first quarter of 2007, it had risen to $354,125.

In Santa Fe County, the first-quarter median sales price for single-family detached dwellings was off by 7 percent, falling to $480,000 from $517,000 a year earlier.

The median means as many homes sold for more than that price as did for less.

The Santa Fe Association of Realtors cautions that the median sales price is determined from only those sales listed on the association's Multiple Listing Service, which does not include every sale in the area.

One market sector that took a big hit in the first three months of the year was condominiums and townhouses. The number of such units in the city and county fell by 28 percent, and the median sales price slipped by 26 percent to $230,000.

Gary Wallace, an associate broker with Santa Fe Properties, said the lagging sales of condos and townhouses might have been because buyers had the opportunity to acquire single-family homes in the city or county at lower prices than before.

"We're predicting things will be better within the next six months," Wallace said. "The money is there, and the rates are low."

Kitty Wolfe, an agent with Barker Realty, sells both freestanding homes and townhouses. At Park Plaza, a townhouse development with some freestanding homes located off Rodeo Road, she said, "for the first time since 1998, there were no homes sold in the first quarter. But I do have three under contract."

Wolfe said, "Prices are flat right now, but there seems to be a pent-up demand for homes from locals. That's where a lot of sales are coming from."

As for sellers, she said, "I'm advising my clients to wait it out unless they've got a really good reason to sell."

Sales in the popular Eldorado subdivision southeast of Santa Fe also softened in the first quarter of 2008, with the median sales price falling to $349,000, compared to $411,000 a year earlier.

The number of homes sold in Eldorado also dropped — to 21 from 29.

Shalizi said sales in Santa Fe County have been affected by a company's announced plan to drill new wells for oil and gas in various parts of the county. "I know a couple of (home) sales that were terminated due to concerns about the (planned) drilling," he said.

Another indicator of soft sales in the first quarter was the average number of days that a home stayed on market before it was sold. A graphic compiled by the association indicates homes in five of nine areas in the city and county took longer to sell in the first quarter of 2008 than in the same period of 2007.

Another chart compared the sales price to the asking price.

That figure was in the 90 percent range throughout 2007, then dropped to 76 percent in January of 2008. It rose to 88 percent in February of 2008 and then to 97 percent in March of 2008.

"It shows that homes are now selling close to their list price," Shalizi said. "Sellers are now responding to market conditions by pricing their homes more competitively in all price ranges."

Francis Phillips, branch manager of 1st Metropolitan Mortgage in Santa Fe, said at the news conference that sales activity at his office has been brisk, despite the slowdown in the national economy.

"Seventy five to 80 percent of our mortgage activity is refinancings," he said, adding that rates are attractive at this time.

1st Metropolitan is working with the Federal Housing Administration and the city of Santa Fe's Housing Trust (previously Santa Fe Community Housing Trust) and other government entities to provide mortgages to low-income home buyers, he said.

For more affluent buyers, jumbo loans are now more available than before, and rates are reasonable, Phillips said, coming in at around 5 to 6 percent for qualified borrowers.

Linda Rodriguez, a mortgage loan originator with Century Bank, cautioned real-estate agents to ensure buyers are "solid" before they apply for a mortgage. "Deals are getting tougher and tougher right now," she said. "The sooner you get the borrower and lender together, the better."

Rodriguez added home appraisals "are a big deal now" and must be realistic for lenders to accept them.

"People are going in (for a loan) thinking we're in the same market we were six months ago," she said. "Now the mortgage industry has changed. You have to have the income to buy a house."

Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com.

BUYER'S MARKET

The news: Tighter credit and weaker demand forced sellers to accept lower prices for homes sold in Santa Fe during the first quarter of this year.

Background: As houses stay on market longer, local conditions reflect the national slowdown. Falling interest rates bring mortgage lenders business from refinancings.

Results: Softer prices open more of the market for houses to locals with good credit or healthy incomes, while sales of condominiums and townhouses slip.