Market Confusion?

In a CNN interview, Warren Buffet was talking about coping with the current economy. He said, “If you are fearful and confused, you don’t get over being fearful until you get over being confused.”

Not all homes are created equal in the Santa Fe market. For people looking to buy a home here, the cost per square foot is all over the board. The range can be anywhere from $180 per square foot to over $1,000 per square foot! "On paper" a listing may look great when you're calculating price per square foot, but when you actually see it, disappointment settles in.

So how do you avoid the confusion? So many things need to be factored in when trying to determine market value: location, views, finish level, details, materials used, single or two story, lot size, floor plan, design, functional and economic obsolescence and more. Work with a professional who knows the market inside and out.

Now to address the other part of Buffet's statement: getting over being fearful. Start by defining what you're fearful of. Are you terrified of overpaying and not buying at the very bottom of the market? Do you think a better house will come on the market if you wait? Are you thinking interest rates will go down even further?

Remember, there won't be a red light indicator to announce that we have finally arrived at the bottom of the market. You have to watch the market closely and look for the indicators. Things like prices stabilizing, more properties selling, fewer discounts, and a closer balance of supply and sales.

Santa Fe was relatively insulated from the rest of the country with foreclosures and rapid appreciation. Unlike the Las Vegas, Miami and California markets, Santa Fe grew at a conservative, steady pace. I believe that built stability into our market and helped preserve equity.

No one likes to overpay and everybody wants the lowest interest rate. I believe that our market hit the bottom about 2 months ago and has stabilized. While I think prices will be somewhat flat for the next 3 years, interest rates will not. Look for increases in the next 9 to 12 months. And when rates go up, I believe it will be so fast, almost overnight and with a 1 to 2% move. Take advantage of the low prices and maximize your buying power with low interest rates.

Hope you're a little less confused after reading this. I'm always happy to meet with you in person and talk in-depth about the various factors in the Santa Fe real estate market. I love the City Different and am happy to help demystify your home buying or selling process however I can.