Fear

Why are some people reluctant to buy a home in what is obviously a “Buyer’s Market”, when there are great investment opportunities available in certain highly-desirable areas of the country like Santa Fe, New Mexico? The answer is fear. Fear of the unknown and fear of failure (loss).

Nobody wants to fail or experience loss in any endeavor, and a home purchase is the largest financial endeavor most people will ever be involved in. But keep in mind, although you want your home to be a good long-term investment, you also want it to be a good place to live. Even if it’s a second or third or even fourth home, it should be something an owner is proud of and happy to be a part of.

Santa Fe, New Mexico is a place that offers homeowners both…good investment opportunity and good place to be (for alot of reasons). Find out for yourself why Santa Fe may be the perfect place for you.

Go to my website www.williamotto.net to learn more.

Santa Fe, New Mexico Real Estate News

Welcome to my newsletter dedicated to keeping you updated on news and trends in Santa Fe’s real estate market!  I hope you find this information helpful and that I can be of service to you in finding the perfect home in beautiful Santa Fe, New Mexico.

As a professional realtor specializing in Santa Fe properties, I am dedicated to working with buyers and sellers in the luxury home market of New Mexico’s state capitol.  My clients have discriminating taste and seek unique properties:  a compound in Las Campanas, ranch property for horses, mountain view  homes, customized golf course properties, or rural adobe estates.  Whether you are a buyer or seller, you will find that working with me and my team will be a pleasant and rewarding experience.

Foreign Investors Love US Real Estate

Not surprisingly, the weak dollar has made an investment in US real estate an attractive alternative to low rates of return in their own countries.

The weak dollar has made the American real estate market look attractive to foreign bargain hunters.

The U.S. rose to the top of lists of the “most stable and secure” countries for real estate investment and the countries with the best opportunity for appreciation, according to the 16th annual survey of the Association of Foreign Investors in Real Estate (AFIRE)released Jan. 28. New York City and Washington D.C. were the top two global “Cities for Foreign Investors’ Real Estate Dollars,” according to the survey.

Most Stable and Secure Countries for Real Estate Investments
1. U.S. – 56% of vote
2. Germany – 11% of vote; up from #3, with 4.5% of the vote in 2006
3. United Kingdom – 8.8% of vote; down from #2, with 11% of the vote in 2006
4. Australia – 8.8% of vote; up from #5, with 3% of the vote in 2006
5. Japan – 5.3% of vote; with 3% of the vote [tied with Australia], unchanged from 2006

I expect we’ll continue to see a surge of foreign investment capital in US real estate markets.  We are already seeing some of that in New Mexico, especially with the Spaceport project in the southern part of the state.

Why US Real Estate Investing Makes Sense for Europeans

There’s been a lot written recently by investment analysts on why Europeans can benefit from investing in U.S. real estate.  Here are some excerpts from the recent pension fund investment report by TIAA-CREF on asset management:

In addition to providing diversification benefits for dollar-denominated portfolios, investment in U.S. real estate can also be viewed as a diversifier vis-à-vis European real estate. In fact, diversification is perhaps the most powerful rationale for cross-border investment. Research has shown that domestic stock and bond portfolios benefit from international components.

…  Second, we demonstrate that U.S. real estate can be a source of attractive risk-adjusted return visà-vis stocks and bonds, and further, that U.S. real estate can be a source of attractive risk-adjusted return as compared with European real estate. Finally, we show that U.S. real estate is a key component of a “market-neutral portfolio,” and especially when viewed from a global perspective. The two other reasons for investing in U.S. real estate discussed in our initial paper — real estate’s inflation-hedging capacity and solid cash flows, especially for those concerned with liability matching — still apply … 

The amount of foreign investment in US real estate has shown dramatic growth:

In 2004, for example, European purchasers accounted for over 40% of total real estate purchases while Australian purchasers accounted for 19%.

 

Also, from the National Real Estate Investor:

Foreign investors poured $163 billion into U.S. commercial real estate in the first half of 2007, a 37% increase over the first half of 2006, according to real estate services provider Jones Lang LaSalle.

Nowhere is the shift more pronounced than among German funds, historically the largest source of foreign capital in U.S. commercial real estate. In 2006, the funds sold more than $11 billion in assets in the U.S. and bought only $2.8 billion. In the first half of 2007, German investors spent $2.26 billion — nearly as much as they spent in all of 2006 — even though they still remained net sellers by $1.4 billion.

Real estate in the United States, according to this early 2008 article, continues to look like a bargain for European investors:

Meanwhile, returns on investment for European real estate are declining because an excess of capital in those markets is driving up the prices, real estate executives said. By comparison, especially to European investors, American real estate looks cheap.

The analysts appear accurate, based on my observations of recent buyers coming into the Santa Fe, New Mexico luxury home market.  They view this market as providing tremendous value, and upside investment potential. 

 

Santa Fe Real Estate Buyer Profile

Who’s buying real estate in Santa Fe, New Mexico these days?  Anyone who can see that it’s a buyer’s market is taking advantage of the lull in transactions.  Santa Fe has a long tradition of attracting an electric mix of home buyers:  international, ranching, spiritual, western, enviro-conscious, new age, and everything in between.

More than 40% of home buyers seek Santa Fe as a second home location.  That trend continues today, with more and more real estate investors taking advantage of the value of owning a home in northern New Mexico.

Here are some recent examples of what you can buy in Santa Fe:

Asking Price: $875,000.00

Acres: 2.070
Bedrooms: 3
Bathrooms: 3 (2 0 1)

Asking Price: $850,000.00

Acres: 1.900
Bedrooms: 4
Bathrooms: 3

 

These prices and values are beginning to attract a sophisticated European audience who understand the power of the strong Euro against the United States dollar.  Expectations are that investors from France, Germany, Great Britain, and Switzerland will soon be leading the pack of European investors.

 

More recent listings in Santa Fe, New Mexico can be found at my website.

News and Newsworthy

Santa Fe property values continue to rise, topping $6.2 billion dollars in the most recent report from the Santa Fe County assessor’s office.  Today’s estimated figure compares to $5.4 billion in 2006 and $3 billion in 1997.  The nearly 15% increase over last year’s figure is largely due to the construction of new homes, new subdivision lots, and the active appreciation in the real estate market.  Read more in today’s New Mexican.