The number of home sales climbed for the sixth straight year in Santa Fe, but concerns about the state’s economy and headwinds from the region’s oil and gas sector may hurt that momentum.
The Santa Fe Association of Realtors on Wednesday reported that closed sales in 2015 climbed 9.9 percent countywide from a year earlier. The median sales price, now at $292,250, fell about 1 percent, while the inventory of homes for sale also has declined.
Sales were especially strong in the early part of the year but actually fell the last three months of 2015 — down more than 20 percent in the unincorporated areas. The brightest spots in the market during the fourth quarter were condo and townhome sales, which climbed 17 percent as prices fell.
Gary Bobolsky, a broker at Sotheby’s International Realty in Santa Fe and president of the Realtors association, said it’s still a buyer’s market in Santa Fe, which is in contrast to markets in nearby California and Colorado.
“I still think it’s more of a buyer’s market, but that’s starting to level out,” he said. “The market is getting stronger for sellers.”
He added that Santa Fe sales tend to lag the rest of the United States by one to two years. So as other areas have recovered, so will Santa Fe.
He doesn’t think small interest rate hikes will have much impact on higher-income buyers, as many of those home purchases are for cash. For the middle of the market, however, there might be a short-term boost to sales as buyers get off the fence and make purchase decisions while rates are still low.
“Maybe it’s a little more motivating for people on the fence to be buyers to make the purchase and lock in a house before rates go higher,” Bobolsky said.
Kevin Moores of the Bank of Albuquerque on St. Michael’s Drive in Santa Fe, one of the highest-volume mortgage brokers in the city, agrees that interest rates are still historically low and that modest increases won’t hurt sales.
“I don’t think it’s going to have any major effect immediately,” he said. “But if we get 1 or 2 percent higher, then it will cool the market down.”
A larger factor for Santa Fe might be the economic slowdown in adjacent states such as Texas, where the oil and gas industry has cratered due to an oversupply of crude oil, pushing prices to the lowest level in a decade. That has slowed new development activity and caused layoffs in the industry.
One new report indicates even Santa Fe home prices are vulnerable to a decline due to the energy patch.
In economic modeling released by the Arch Capital Group, New Mexico is one of five states vulnerable to a recession from the slowing energy sector. The state joins North Dakota, Wyoming, West Virginia and Alaska. Likewise, the analytic lists all the metro areas in the state — Albuquerque, Santa Fe, Farmington and Las Cruces — with an “elevated” recession risk.
At 6.8 percent, New Mexico now has the highest unemployment rate in the country. And although the economy is still adding jobs statewide, overall expansion has slipped to 45th nationwide, according to the U.S. Bureau of Labor Statistics.
Santa Fe has seen a steady number of buyers from Texas and Oklahoma — not just for higher-elevation second homes but for retirement properties, Bobolsky said.
“They love the city, and they love the climate and they like it because it’s close. We’re a haven for Texas oil money,” he said. “They come here and they meet a lot of their friends here.”
“Texas is a big feeder market,” Moores added. “A lot of people come here for vacation and they come to ski, and if they can’t sell their home, they can’t come here” to retire.
Contact Bruce Krasnow at email@example.com.
Santa Fe County home sales, 2015 vs. 2014
Closed sales: 2,462, +9.9 percent
New listings: 3,693, -2.2 percent
Days on market: 160, -6 percent
Median sales price: $292,250, -0.9 percent
Percent of original list price received: 93 percent, +1.7 percent
Inventory of homes for sale: 1,620 -9.1 percent