Existing-Home Sales Increase in May
Existing-home sales experienced their first back-to-back monthly gain since September 2005, according to May data released by the NAR. Housing affordability and the $8,000 first-time buyer tax credit contributed to the 2.4 percent rise in existing-home sales last month, and their seasonally adjusted rate of 4.77 million units. The data, which includes single-family, townhomes, condominiums and co-ops, increased over April’s 4.66 million unit rate, though the totals are 3.6 percent lower than May 2008’s 4.95 million rate.

Government Offers $6 Billion to Buy Foreclosure Homes
State and local housing authorities, and many non-profit organizations, are now eligible to take funds from a $6 billion federal government pool set aside to buy foreclosure homes for middle- and low-income families. The program, called the Neighborhood Stabilization Program (NSP), was created to improve neighborhoods and reduce the number of foreclosures on the market.

Lawmakers Urge Fannie, Freddie to Relax Condo Mortgage Rules
Representatives Barney Frank (D., Mass.) and Anthony Weiner (D., N.Y.) are urging Fannie Mae and Freddie Mac to relax the standards for granting mortgages for new condos. The current tough standards are, they say, contributing to the slowdown of the housing market and affecting the development of new units.

Disagreement Over Consumer Protection for Mortgages, Credit
President Barack Obama’s plan for a Consumer Financial Products Agency, which would protect consumers against bad mortgages and credit practices, is creating intense disagreement in Congress. Key Democrats, including House Financial Services Chairman Barney Frank (D-Mass.), support the creation of the consumer agency, believing that consumer issues have not been part of financial regulation in the past. Meanwhile, Republicans including Rep. Scott Garrett (R-N.J.) say that the agency will be too heavy-handed and impose a “government-knows-best” set of regulations for the financial sector.

The prediction came in a recent story on usnews.com, the Web version of US News and World Report. Researchers said they expect the Santa Fe real-estate market will grow at a rate of 3.6 percent annually through most of 2018.

Most of America’s real estate markets overall will appreciate during the next 10 years, some more than others, Mark Zandi, chief economist at Moody’s Economy.com., said in the report.

Moody’s Economy based its forecast on employment and population data, as well as geographic and industry trends.

Unlike most other cities in the top 10, Santa Fe lacks an industrial base to boost the city’s economy. But other factors could be at work.

Among the reasons for optimism about Santa Fe?

The community’s 300 art galleries and dealers and the estimated 1 million visitors who come to Santa Fe every year, “making tourism a key component of the local economy,” the article stated.

Real-estate brokers were delighted with the prediction, including Mary Schroeder, president of the Santa Fe Association of Realtors, though she was a little cautious.

“That’s actually good news,” she said. “I haven’t seen that about Santa Fe before. The news is usually about Albuquerque. I get tired of hearing about Albuquerque.”

Santa Fe isn’t seeing that 3.6 percent growth rate just yet.

In the first quarter of 2009, according to the Santa Fe Association of Realtors, the rate of growth was about 2 percent in the city of Santa Fe, with the median sales price rising from $301,500 during the first quarter of 2008 to $308,000 in the same period in 2009.

In Santa Fe County, the result was not as good. The median sales price dropped from $480,000 to $440,000, a decline of 8 percent.

“The biggest thing we need to do over the next 10 years,” Schroeder said, “is to reduce the supply of homes for sale. In some neighborhoods, we’ve got several years’ supply. There are thousands of homes on the market. We’ve got to get rid of that inventory. That will make a big difference in our pricing.”

Once that happens, “I think people will wake up,” Schroeder said. “They’ll be wondering, ‘Oh my God? Did I miss the bottom?’ And then go out and buy a house.”

The market also will be affected by the slowdown in new construction, Schroeder said. “If they’re not building anything new, resales are going to go at a higher price. I think that will have a positive impact on the market.”

People also will buy homes in Santa Fe because of the air quality and because they want to live in a town where green building is a priority, Schroeder said. “We could be a model city for those kind of changes.”

Santa Fe also has the advantage of being considered free of such natural disasters as earthquakes and hurricanes. “It’s pretty safe here,” Schroeder said. “The more people realize what a safe haven Santa Fe is will help with people retiring here,” she said.

The only problem is that Santa Fe is not as cheap as other places to live, she added.

One government program helping sales is the federal income-tax credit of $8,000 for first-time home buyers.

“It helps a lot,” Schroeder said. “My son used it to buy a house in Las Cruces. He was thrilled with that.”

Alan Ball, publisher of a quarterly real-estate newsletter and general manager of Southwestern Title & Escrow, also was glad to the forecast for Santa Fe’s real estate. But he was hesitant about predicting the course of real-estate prices over such a long period.

“I might take a stab at one year,” he said. “Much less two or 10 years.”

Ball added: “I can’t imagine us leading anything nationally since we’re such a small MSA (metropolitan statistical area). But I think it’s possible. The good news for us is that we didn’t have the runaway appreciation some cities had and therefore we don’t have the crazy drops in housing values that other places did.

“We also didn’t have the large number of foreclosures. In some markets, 3 to 5 percent of the homes are bank-owned. The stability here is really nice.”

Ball cautioned, however, that trends toward government forcing builders to provide affordable housing are “prohibitive for normal development” and “will put a wall around the city.”

Rising incomes will be necessary if residents are going to buy homes in Santa Fe, and New Mexico personal income growth is expected to be 2.2 percent in 2009, 2.7 percent in 2010 and 4.5 percent in 2011, according to Mark Boyd, an economist with the state Department of Workforce Solutions.

“It’s hard to know how things will turn out,” Boyd said. “But all the forecasts see us getting back on the track we were on” before the recession hit. “Perhaps with a few lessons learned.”

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

PICKED TO UPTICK

A list of cities and projected annual percent change in home prices from the fourth quarter of 2008 to the fourth quarter of 2018:

1. Bremerton-Silverdale, Wash.: 5.22 percent

2. Glens Falls, N.Y.: 4.71 percent

3. Fort Collins/Loveland, Co.: 4.06 percent

4. Corvallis, Ore.: 3.95 percent

5, Anchorage, Alaska: 3.8 percent

6. Duluth, Minn.: 3.74 percent

7. Sandusky, Ohio: 3.66 percent

8. Santa Fe: 3.57 percent

9. Pittsfield, Mass.: 3.51 percent

10. Decatur, Ill.: 3.44 percent.

Bob Quick | The New Mexican

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