By Rey Post, Managing Editor & Associate Broker, Santa Fe Realty Partners
When the calendar reads April, it means the start of baseball season. I am reminded of one of the most famous baseball comedy routines ever performed–—the “Who’s On First?” sketch between Bud Abbott and Lou Costello. For anyone unfamiliar with the premise of this skit, perhaps best known from a live recording made in 1945, the humor lies in Abbott rattling off the unusual names of team players to a confused Costello (who’s on first; what’s on second; I don’t know is on third; and so on.) The resulting rapid-fire dialogue between these two vaudevillians produces one of the most memorable moments in stand-up comedy (in 1999, Time magazine named the routine ‘Best Comedy Sketch of the 20th Century’.)
So what does all this have to do with real estate? Well, I see a little metaphor in the message of the skit when it comes to interpreting much of the news about the status of today’s real estate market. Turning the title of the comedy routine a bit, illustrates my point: “who’s truly on first?”
In his weekly published column, political analyst Charlie Cook observed on April 20th that people are increasingly seeking comfort in news from outlets–—whether it’s TV, radio, print, or the Internet–—where they can feel a sense of shared values with the hosts or writers. Their feelings, Cook notes, are reinforced and often amplified rather than challenged or complicated by facts that do not concur with their beliefs. Cook suggests that people are adopting the old Burger King slogan of “have it your way”–—constructing their own realities based on their own sets of facts, which are free of nuance and leave little room for gray areas.
Today’s 24/7 news cycle invites a lot of what would have to be considered negative news, since that–—as most people in the news industry know–—is what produces the kind of viewer/listener/reader ratings that “good” news can seldom match. In this climate, it’s no wonder that–—as Charlie Cook observes–—the already challenging circumstances of our current economic situation are easily amplified by the seemingly never ending drum beat of bad news about the housing market.
It still holds true that until we can get the national unemployment rate down, address the volume of national home foreclosures/short sales and bring a renewed sense of optimism and equilibrium to the home buyer-seller equation–—then the reality of the state of the housing market will continue to closely parallel the negative editorial review coming from the media.
So, if we look at ‘first base’ as symbolically being a starting point, then (stay with me on this one!) let’s use my word twist on the title of Abbott and Costello’s comedy routine, to offer up some good news about housing–—“who’s truly on first base?”:
» The U.S. Department of Commerce reports that nationally, the sales of newly built homes shot up 27% in March–—the largest monthly gain since 1963. In Santa Fe, home sales in the first quarter of 2010 were up by 16% over the same period in 2009.
» The Commerce Department also reports that nationally, the pace of new construction rose roughly 2% from February to March and applications for building permits–—a good gauge of future activity–—rose 7.5% in the same period (the highest level since October 2008.)
» National mortgage lender Fannie Mae, suggests in their April 2010 Economic Outlook report that June 2009 was the end of the recession and that current key indicators for existing home sales, including pending home sales and purchase applications, are showing good signs of a pickup.
» Fannie Mae’s just-issued National Housing Survey shows that: 65% of Americans still prefer owning a home; 64% think it is a good time to buy a house; 73% think housing prices will go up or stay the same; and 70% said they believe buying a home continues to be one of the safest investments available.
» The National Association of Realtors (NAR) reports that vacation home sales are up nearly 8% and that 70% of these sales in 2009 were in the South and West regions of the country (good news for New Mexico.) And in a separate NAR national survey, 90% of buyers considered knowledge of the purchase process, responsiveness and knowledge of the real estate market as very important reasons for working with an agent (good news for New Mexico real estate brokers.)
This month’s article contributors offer some first-class springtime real estate commentary. If you wish to follow-up with any of these writers, their contact information can be found under the “Contributor” column. As always, Kate, Melissa, Susan and Jane have designed and produced a terrific publication.
So, until next month, I wish you good luck and good fortune in “ALL THINGS REAL ESTATE.”
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As a mortgage is a loan secured by real property, an appraisal is the most critical piece of information in the processing of a mortgage. The central part of an appraisal is the valuation which is supported by comparable sales. In most parts of the US, there is a requirement that those comparable sales are no greater than 90 days old nor further than one mile from the subject property. We have some leeway in Santa Fe, though no comp can be older than 6 months and the distance must be justified by the nature of the property.
The question on most peoples’ minds in this economy is: “Why build right now?” or “Is now a good time to improve my house?” In our opinion, and yes we are a bit biased considering we are builders, now is an excellent time to build. All the financial news of late suggests that we are at the bottom of this recession and even housing sales are taking a turn for the positive. New construction in Santa Fe has slowed to a crawl just like the rest of the country, however we do not have the “new home” inventory that you would more likely see in the major metropolitan areas. As a result, material and subcontractor costs have come down and General Contractors are much more competitive in their pricing. In addition, builders are not spread as thin as they were in recent years, allowing for the attention you deserve in your project.
Oh, how correct Bob Dylan was when he wrote this song 40 years ago! Not only has the mortgage market suffered through the most chaotic period ever, but now, in response to the chaos, the regulators are wielding their might axes to make sure that it never happens again.