Las Campanas Santa Fe Homes

By Alan ball

And yet here we are in December 2013, approaching another successful year end with increases in almost all important categories for Santa Fe residential real estate sales. Unit sales are up, dollar volume is up, average and median home prices are up (last time I checked) and we have much to be thankful.

The unfortunate news is that mortgage rates are rising. All reputable pundits predict mid 5s for long term interest rates by this time next year. That increase in borrowing cost is in league with efforts to limit the number of home buyers that are able to (CAN?) purchase a home with less than 20% down.

In years past, as many as 60% (or more) of home buyers borrowed in excess of 80% of the price of the home they purchased. Certainly some could have still purchased with less down, but if a large percentage of potential homeowners is denied access to the “American Dream” because of restrictive borrowing standards, what will become of our housing market recovery?

Lawrence Yun, of the National Association of Realtors, speaking in Santa Fe at our local association annual meeting, predicted that if all homeowner hopefuls must have a minimum of 20% down payment, ownership may be delayed by as much as 12 years for that group that did not begin with the amount of 20% down payment in their possession.

And what does that mean for our recovery? Just the government mess we all watched this year, when some tried to force their agenda on all by threatening a government shut-down, was enough to discourage home buyers in measurable ways. We have seen contracts decline each of the last 5 months from that Washington debacle.

Love your country, be a patriot, but please take care of business. People’s lives and futures depend on it. We hope to see the light in Washington someday. For now, that light you see may be an oncoming train. I hope we can avoid a big dip in this drawn-out recovery.