Barker Realty is proud to announce we’re opening an office in the Agora shopping center in Eldorado. If you are looking to buy or sell in Eldorado please contact us today or visit www.barkerrealtyeldorado.com. More information about our opening will follow, stay posted!

Real estate is as old as dirt (pun intended) but the business of real estate sales keeps evolving – and so do Barker agents. As these challenging economic times see an increasing number of short and bank-owned sales, the National Association of Realtors developed a new designation for their member realtors R, SFR stands for Short Sale and Foreclosure Resource. One of Barker Realty’s agents, Lauren Sato, recognized the need for local expertise in this area to help homeowners understand their true options in attempting to avoid foreclosure. Last year, Lauren obtained her Certified Distressed Property Expert (CDPE) certification and now Barker Realty is proud to announce that she has now also received her SFR designation.

If you know someone who is having trouble making their mortgage payments and needs to learn the facts on how to avoid foreclosure, contact Lauren at 629-8779 or email LSato@BarkerRealtySantaFe.com

Analyst: 6.2 percent jump fueled entirely by strength in Southern markets

The Associated Press

WASHINGTON – Sales of new homes rose last month to the highest level in more than a year as strong activity in the U.S. South offset weakness in the rest of the country.

The Commerce Department said Wednesday that sales rose 6.2 percent to a seasonally adjusted annual rate of 430,000 from an upwardly revised 405,000 in September. Economists surveyed by Thomson Reuters had expected a pace of 410,000.

There were 239,000 new homes for sale at the end of October, the lowest inventory level in nearly four decades. At the current sales pace, that’s a 6.7 months of supply, down from last winter’s peak of more than a year.

“If you’re looking for a sign that builders will need to start swinging their hammers again soon, this is it,” wrote Mike Larson, real estate analyst at Weiss Research.

The report tallies signed contracts to buy homes, rather than completed sales. Home shoppers in October were acting before lawmakers decided to extend a tax credit for first-time buyers and expand it to some existing homeowners. The credit now covers contracts signed by April 30, and analysts expect it to further the housing recovery in the coming months.

“It’s all thanks to the government,” said Jennifer Lee, an economist at BMO Capital Markets. Sales are up 31 percent from the bottom in January, but down 69 percent from their peak in July 2005.

The surge in sales was driven entirely by a 23 percent increase in the South. Sales fell about 5 percent in the West and Northeast, and fell 20 percent in the Midwest.

Despite the lack of certainty about the tax credit that buyers faced in October, sales were up 5.1 percent from a year ago, the first yearly increase since November 2005.

The median sales price of $212,200 was almost even with $213,200 a year earlier, but up almost 1 percent from September’s level of $210,700.

Last month, Ryder Homes of Nevada Inc. resumed construction on houses at two of its communities around Reno. “We’re finding people aren’t coming in willing to wait six months,” said Rob Dunbar, Ryder’s land development manager.

The resale market is also strong. the National Association of Realtors said Monday home resales rose 10 percent from September to October, the biggest monthly increase in a decade. Along with the tax credit, buyers are being attracted by low prices and mortgage rates.

The average interest rate for a 30-year fixed mortgage was 4.78 percent this week, matching a record low set at the end of April, Freddie Mac said Wednesday.

By KATE MURPHY

WHEN Matthew White, a landscape architect, decided two years ago to sell his 1,300-square-foot apartment in Philadelphia, he knew real estate prices were plummeting. Nevertheless, he thought he could get $760,000, about what he had paid two years earlier, because he had made many improvements to the space, an airy penthouse with two verdant terraces.

“It’s an incredible property, with spectacular views,” he said. Within a month, he got what he considered an “insulting” bid of $525,000. Five price reductions later, he wishes he had taken that offer. “I wasn’t realistic about what I could get,” said Mr. White, whose apartment is currently listed for $449,900. “It is such a special place, but now I realize that doesn’t matter during a recession.”

Even in the best of times, it’s hard for individuals to objectively value their homes, which often reflect their sense of self and personal style. Making things even more difficult has been general market inactivity lately, if not paralysis, which has provided little in the way of pricing guidance. But by using online resources, investigating neighborhood trends, consulting real estate experts and perhaps even asking the opinions of brutally honest friends, homeowners can arrive at a reasonably accurate appraisal even in these uncertain times.

A good place to start is your local tax assessor’s or county clerk’s office, many of which post real estate transactions on their Web sites. Links can be found at onlinedetective.com (parts under construction) and netronline.com. Those records will tell you what has recently sold in your neighborhood and for how much. Look for comparable homes with similar features and square footage.

Be aware that prices may not always totally reflect reality. “The house could have been sold to a sister or been part of a larger transaction,” said Dean Gatzlaff, a professor of real estate investment and urban economics at Florida State University in Tallahassee, like maybe a 1970s Eldorado convertible was thrown into the deal.

People living in “nondisclosure” states (Alaska, Idaho, Indiana, Kansas, Louisiana, Maine, Mississippi, Missouri, Montana, New Mexico, North Dakota, Texas, Utah and Wyoming), where the sale prices of homes in most jurisdictions are not public information, have to approximate by looking up mortgages on transferred deeds of trust and factoring in typical down payments and interest rates. In any event, don’t trust tax appraisals, as they are notoriously inaccurate.

“Look for sales within the last two to three months if there are any,” said David Kupfer, a real estate agent with Keller Williams in Phoenix, where prices in some neighborhoods have fallen as much as 50 percent in the last two years. “Six months ago is obsolete,” he said, because markets have been changing so rapidly.

Indeed, real estate agents and appraisers from Manhattan to Menlo Park said they now consider sales figures older than six weeks unreliable. Other sources of information are free online home value estimators on sites like zillow.com, trulia.com and forsalebyowner.com. But these derive some of their information from public records, including tax appraisals, and are thus subject to error. A test of those sites using various residences nationwide provided valuations that ranged from exactly right to incredibly inflated. Most estimates, however, were within the rough range of reality.

Compare the estimates with prices of homes on the market now. “These are your direct competition even if the homes are foreclosures” or fire sales by distressed home builders, said Jim Amorin, a real estate appraiser in Austin, Tex., and president of the Appraisal Institute, a trade organization. “That’s hard for a lot of people to accept,” he said, when their homes weren’t abandoned, repossessed or otherwise forsaken.

Leonard Calandriello, a retired banker in Chandler, Ariz., said he felt “entitled” to $500,000 for the 1,975-square-foot town house he bought new in 2007 for $470,000, then upgraded with enhancements like plantation shutters and a travertine patio, spending another $30,000. But with nearby foreclosures and the developer of his community cutting deals, he has had to reduce his asking price twice since May, to $399,000. “We may have to come down more,” he said. “Psychologically it can really get you down.”

Real estate experts recommend that homeowners do as Mr. Calandriello did and attend nearby open houses to see how their homes compare in size and amenities. But be realistic about what truly adds value and perhaps consult the Marshall & Swift Residential Cost Handbook, which professional appraisers use to assess how much, say, a fireplace or three-car garage is worth. The $300 tome is available in some business school libraries, but you can also pay $10 to use the SwiftEstimator at swiftestimator.com, which lets you do an item-by-item calculation of the value of your home.

The attractiveness of construction and design elements is subjective, so experts said it might be as meaningful to poll your most straight-talking friends. “You may love your new sauna and think it’s a wonderful and attractive feature, but someone else may not care, or even think they need a deduction so they can rip it out,” Mr. Amorin said.

That’s a lesson that Michel Shanks, a financial adviser, learned over the last year as she and her husband, Rick, a lawyer, tried to sell their 4,000-square-foot Mediterranean-style house in Bellaire, Tex., a suburb of Houston. Against the advice of their real estate broker, they listed their home for $825,000, more than the prices of nearby homes.

“You’re emotionally attached, so you think your home is worth more,” she said. “I had a landscape service and a Sub-Zero refrigerator and an icemaker on every floor, but buyers don’t care, they want deals.” The house eventually sold last February for $605,000 after 10 months and four price reductions.

Indeed, real estate experts said the only things that command premiums these days are location, light and space. “These are immutable, everything else can change,” said Carey Adina Karmel of the Corcoran Group in New York. Even so, she said, these attributes are not worth what they once were: “Sellers have had to lower their expectations, and it’s painful.”

Seeking pricing advice from real estate agents or paying $250 to $500 for a professional appraisal are options. But know their respective biases. “The Realtor has the incentive to start high to get a bigger commission, so if you are not in a rush to sell and can accept having to lower your price later, then go with the Realtor’s price,” said Karl Case, a professor of economics at Wellesley College and a founder of the Case-Shiller home price index. “Appraisers are worried about getting sued for inflating prices, as we saw leading up to the mortgage meltdown, so their natural bias now is to quote low. So if you want to be realistic, go with their estimate.”

In the end, the value of a home is the price the buyer is willing to pay. It’s chance, circumstance and psychology as much as location, square footage and design that ultimately determine the price someone will pay for your house.

“Your home is where you live,” said Kathy Wetmore, a Houston real estate agent, not an investment with a guaranteed return. Recalling several boom and bust cycles in her 22-year career, she added, “You make money in business, not in real estate.”

David Hultin

New Mexico Bank & Trust

The appraisal process is more involved and more complicated than most people are aware. They see the appraiser visit the property, take a couple of pictures and leave, and they think that he then goes to his office, types up the report and can now spend the rest of the day drinking beer. Not so. Let’s take a look at the process as it should occur.

The appraiser makes a physical inspection of the property to understand the exterior and interior condition and measure it to develop square footage for comparative purposes. The appraiser will ask the homeowner or realtor what improvements have been made (roof? Stucco?), look at the complexity of the floor plan and assess amenities and the quality of the interior. This will be used to help develop an “effective age” of the
property. If, for example, the home was built fifty years ago, but has had recent extensive remodeling, the effective age may be only a few years, not fifty. This will be a key component in establishing a value for the property. The appraiser then returns to the office and the hard work begins.

In a perfect world, the appraiser would find three comparable properties that have sold within a mile of the subject property in the last six months. In an area of homogenous housing such as Albuquerque, this may be possible, but far less likely in Santa Fe (an appraiser of thirty years experience with seventeen in Santa Fe told me that Santa Fe is the most complex real estate market in the Southwestern US to appraise). In Eldorado, for example, an identical house may well be three miles away, yet in the same subdivision.

Moreover, in times of diminished sales, the six months may not be reasonable. So the appraiser will make adjustments and explanations as to why the location or date of sale of the comparable goes beyond the preferred range. To find suitable comparable properties, the appraiser must have local knowledge and experience to understand what neighborhoods represent similar value as the subject property. This is a most important element of the appraisal process and follows the “jurisdictional competency” rule of licensed appraisers: if they do not know the real estate market in question, then they are required to seek assistance from an appraiser that does. Information on sold comparable properties can be derived from the Multiple Listing Service (MLS) of the local realtor association. Short sales are identified as such in the MLS data and are not used, considered an anomaly to the appraisal process. If you think values have declined in your neighborhood because of short sales, it is not so. But if the short sale were to become the predominant type of sale, they then might be used.

Once the comparables are identified, the appraiser then has to visit those properties and take photographs to include in the appraisal report. Each complete appraisal valuation can take six to eight hours to complete.

The condition of the property, the effective age, and the location are the most important characteristics in ascertaining the value. Extensive landscaping may help sell the property more quickly, but it does not add significantly to the value. If a homeowner were to ask an appraiser today why home values are decreasing, he would likely answer “supply and demand”. Basic economics: the supply exceeds the demand.

Staci Matlock | The New Mexican

Several people with surface water rights in the Nambé, Pojoaque and Tesuque stream system — including Gerald Peters and his son Soren Peters — have challenged the priority date given their ditches by the New Mexico State Engineer. They’ll now have a chance to prove their ditches were used for irrigation earlier than the official year given by the state. In addition, their neighbors on other ditches can challenge the Peters claim and other protesters on any proposed changes to priority dates.

The action is another important step in the Aamodt case filed 43 years ago to settle the water-rights claims by Nambé, Tesuque, Pojoaque and San Ildefonso pueblos. The pueblos, the state, the city of Santa Fe and Santa Fe County in 2006 reached a settlement that needs congressional approval. This year, Congress has steadily advanced legislation to ratify and fund the settlement, but no final act has been passed. Some of the nonpueblo landowners in the valley with domestic wells have fought against the settlement for years and continue to oppose portions of it.

Meanwhile, the federal district court must finalize the priority dates on acequias in the valley as part of the settlement. Priority dates were given by the state to more than 70 streams in the area and people with water rights had an opportunity to ask for a change in the date.

Priority dates on irrigation ditches are a critical part of New Mexico’s water law and the wheeling and dealing by cities and developers over water rights. New Mexico follows a “first in time, first in right” approach to water — the first person, or ditch, to use water beneficially has the senior claim on the water. The ditches with the oldest priority dates receive their water first off a stream.

The pueblos are recognized as the first people in the valley to use water for farming and other uses, so they have first rights to water.

Priority dates on the acequias in the Pojoaque Valley range from 1728 within the Rio Tesuque to 1907 on parts of the Rio en Medio. Gerald Peters, for example, believes the priority dates on several irrigation ditches fed by the Rio en Medio should be older than the those given by the state. The state gave the Questa Ditch a 1907 priority date; Peters believes it should be 1899.

According to a legal notice published Friday in The New Mexican, people who have challenged their ditch’s priority date and those who want to challenge any changes have until Dec. 31 to file notice they intend to participate in the court proceedings. They must also attend a pretrial conference Jan. 13 with the special master reviewing the priority dates. This is the only opportunity people with surface water rights will have to participate in the adjudication of priority rights, according to the state. Anyone who doesn’t participate won’t be able to object later.

The City of Santa Fe Market Summary Compared to the Article on the National Market

National home resales increased by 9.4% to a 5.57 million annual rate from 5.09 million. Santa Fe home resales increased by 2% from an annual rate of 692 in August to 709 in September in the city.

Sales have gone up in five of the last six months nationally. In the city of Santa Fe sales have gone up four out of the last six months.

By CONOR DOUGHERTY and JOHN D. MCKINNON

Sales of existing homes surged 9.4% in September to a seasonally adjusted annual rate of 5.57 million units, as lower prices and the looming expiration of a federal tax credit lured more buyers into the market. (more…)

TravelandLeisure.com did a survey trying to find “America’s Favorite Cities”. Click here to see how Santa Fe faired (If you live here, you won’t be surprised)

Former Gov. Anaya says infusion of federal cash keeps state out of depression

Kate Nash | The New Mexican

More than 8,600 New Mexico teachers, construction workers and police officers kept their jobs or found new employment thanks to the federal stimulus package, says a new quarterly report by the state Office of Recovery and Reinvestment.

Many of the government jobs were in education, and a “significant amount” were in the private sector, according to the report, which was required by the federal government.

That figure only includes a small chunk of stimulus spending in the state so far, and doesn’t include so-called indirect jobs, like concrete suppliers who provide materials for a stimulus-paid construction job, said former Gov. Toney Anaya, who heads the state’s stimulus office.

The Office of Recovery and Reinvestment’s first quarterly report showed that for $77 million in spending through Sept. 30, 8,641 people had at least part-time work, which translated into about 4,100 full-time equivalent jobs, based on a federal formula for job creation that considers how many hours a person worked.

Anaya said the money for jobs and education spending in particular couldn’t have come at a better time.

“We would be literally in a depression in this state if you took away a couple of the impacts of the stimulus,” he said.

While he noted that some people do consider the state’s economy to be in a depression, Anaya said things could be much worse.

“The other impact it’s had that’s hard to measure by the data I’ve been able to put together is we were able to at least temporarily balance the budget … and schools didn’t have to lay people off,” he said.

“It’s been a godsend on many fronts, but it hasn’t been enough to save us from what’s coming.”

What’s coming is a special session of the Legislature, in which lawmakers need to plug a budget hole that could amount to $700 million. Gov. Bill Richardson has already said he plans to use about $91 million in stimulus funding for public schools.

While some have welcomed the money with open arms, others worry about whether it will be here next year to pay for recurring expenditures.

The state is getting stimulus money for everything from airport improvement projects to new roads and energy-efficient traffic lights.

The jobs it has created include work for teacher’s aides, weatherization equipment installers and some summer jobs, among other things. It wasn’t immediately clear how many jobs were saved and how many are new.

That figure is one thing Anaya’s office will sort through as it goes back over data required by the federal government.

That reporting process — required every quarter now — was quite a task, he said.

“What struck me about the reporting process was that it was just a horrendous challenge for the state,” he said. It required just a huge effort on the part of state agencies … I don’t think there’s ever been this kind of a reporting effort on the federal level, ever.”

Overall, the state is expected to receive more than $3 billion from the massive stimulus package. One report said New Mexico would create or save 22,000 jobs, but Anaya said the number could be higher.

The new jobs come as the state is struggling with a rising number of people who are out of work.

New Mexico’s unemployment rate in August was 7.5 percent.

The office also reported spending a total of $370 million in stimulus funds through Sept. 30, including unemployment insurance benefits, food stamps and Medicaid.

New data suggest that foreclosures are rising in more expensive housing markets.

About 30% of foreclosures in June involved homes in the top third of local housing values, up from 16% when the foreclosure crisis began three years ago, according to new data from real-estate Web site Zillow.com. The bottom one-third of housing markets, by home value, now account for 35% of foreclosures, down from 55% in 2006.

The report shows that foreclosures, after declining earlier this year, began to accelerate in the late spring and that more expensive homes have more recently accounted for a growing share of all foreclosures. “The slope of that curve in recent months is much sharper than it was recently,” said Stan Humphries, chief economist for Zillow. Rising foreclosures among more-expensive homes could create added pressure for a housing market that has shown signs of stabilizing in recent months as sales of lower-priced homes pick up.

The Zillow research compared homes against the median values for their local market and broke each market into three tiers by value. Zillow then looked at the share of monthly foreclosures in each tier over the past decade.

Foreclosures are rising in more expensive markets as home values in those areas fall, leaving more homeowners with mortgages that exceed the value of their properties. Prime loans accounted for 58% of foreclosure starts in the second quarter, up from 44% last year, according to the Mortgage Bankers Association. Subprime mortgages accounted for one-third of foreclosure starts, down from one-half last year.

The prime category includes so-called exotic mortgages that were increasingly used to buy more expensive homes, including interest-only mortgages that allowed borrowers to defer principal payments during an initial period. Borrowers often aren’t able to refinance out of these products because the drop in home values has left them with little equity in their homes.

Default rates are particularly high and expected to rise on option adjustable-rate mortgages, which allow borrowers to make minimum payments that may not cover the interest due. Monthly payments can increase to sharply higher levels after five years or when the outstanding balance reaches a certain level. A study by Fitch Ratings found that 46% of option ARMs were 30 days past due last month, even though just 12% of such loans have reset to higher monthly payments.

Zillow estimated that nearly one in four homes with mortgages was worth less than the value of the property at the end of June. Mr. Humphries said he didn’t expect to see foreclosure volumes level off until later in 2010.