There are two parts to this summary. The first part, General Trends in the Los Alamos Market provides data on price trends since 1996. We present the average price per square foot of homes in the Los Alamos - Jemez area; similar statistics are presented for individual areas.

The second part, Specific Measures of Market Activity describes some means to assess the type of market activity - is the market very active or slow, is it a "sellers' market" or a "buyers' market"?


Executive Summary

The Los Alamos real-estate market can still be considered a very favorable market for buyers, although there are indications that this trend is changing. Houses are selling at a rate that is lower than average for a normal market, and prices have dropped by 17% since the first half of 2006! As we shall see in the statistics below, there was an increase in the number of homes sold in the second half of 2009 compared to the same period in 2008 and the first half of 2009, but there was a subsequent drop back in 2010; prices have stabilized, and are beginning to show an upward trend in some areas. The low mortgage rates (in June 2010) coupled with the relatively low home prices are encouraging buyers to look for a deal.

Figure 1 presents the average price per square foot of homes since 1996, in semi-annual steps. The figure also presents the "spread" (aka "standard deviation" for statisticians), that is a measure of the range around the average value that one can expect the price of homes to be in. As an example, in the first half of 2010, the average price of a home is 139 dollars per square foot, and the spread is 31. This implies that approximately 2/3 of the homes sold will be in the range 108 (139-31) to 170 (139+31) (dollars per square foot). The sales price of a home depends on many factors, and the average price is appropriate for an "average" or typical home. We note that between 1999 and 2001, there were no significant changes in the average price for homes in the Los Alamos area. In 2002, there was a significant increase, of close to 10%, from the end of 2001. Since then, prices have increased steadily till the middle of 2004, and subsequently leveled off till 2006, where we note an average increase of 6.8% in the first half of the year. However, since 2006 we have seen a decrease of the average price by about 23%. Since we started these statistics in 1996, we have seen an increase to date of 51% in average prices of homes.

Similar trends are evident in figure 2, that details prices for Barranca Mesa (including Ponderosa Estates till 2004), White Rock, Quemazon and North Mesa. Prices in White Rock have decreased by about 27% from their highest point, and in North Mesa - by about 23%. Barranca prices have decreased by 22% from their highest point.

Figure 3 presents similar data for other areas, where significant declines are again evident (except for the Jemez).

Specific Measures of Market Activity

Supply (number of homes on the market) and demand (the number of qualified buyers looking for homes), as well as the perceptions of buyers and sellers, determine whether the market is a "buyers' market" (i.e., since there are few buyers compared to the number of houses on sale, buyers can strike good deals), or a "sellers' market" (i.e., a relatively large number of buyers sometimes competing for the same listing, driving prices up). We consider some indicators to help us determine the market we have in mid-2010.

• The number of homes sold above asking price (Figure 4). This number will increase in a sellers' market, because buyers make offers that are higher than the listing price, in order to close a deal before competition starts, or to outbid a competitor. In 2002, the number had increased significantly, to about 25%. Since then, the number has declined to a December 2007 value of 6.7%, and in the first six months of 2008 (January to June 2008), no homes were sold above asking price!. However, in the first half of 2010, the number has recovered to a value around 10%. This metric is one of the indicators of a buyers' market.

• The average sales price is usually a little lower than the asking price. In a sellers' market, the sales price comes closer to the asking price. Figure 5 presents how much lower (in percent) the average sales price is, compared to the asking price.
  

• The number of days a home is on the market decreases in a sellers' market. Currently, the number of days that a house is on the market (till a contract is signed) is at an (almost) all time high of 156 days! Further analysis shows that 35% of the homes that came on the market in the first half of 2010 came under contract within 2 months. One can conclude that houses that are priced appropriately can sell, but it could take a couple of months.
  
  

• The number of houses sold in any given period is another indicator of the vitality of the real-estate market. This number bottomed out in the second half of 2004, and peaked in the first half of 2006. In the first half of 2008, 90 houses sold, the second lowest number compared to the previous years since 1996. In the first half of 2010, 97 homes sold, still quite a low number.
  
  

So what can be deduced from these data? The middle of 2010 finds us with a strong buyer-oriented real-estate market, with around 120 properties for sale in Los Alamos county. The number of properties on the market has increased slightly since January, suggesting that more people are now willing to put their homes back on the market.

In mid-2005, there were more than 280 houses on the market, waiting more than three months (on average) till a contract is negotiated. Now, the waiting time is longer, and less houses are sold. The 2008 market was very similar to the 2007 market, and it did not mirror the dramatic national trend of decreasing prices in 2008. However, in 2009 prices continued to drop, but stabilized in the July to December 2009 time frame. In the first half of 2010, there is a small increase in prices in some areas. We have seen an overall decrease (from 2006 values) by about 17% in the selling price per square foot. Sellers can still get a reasonable price for their home, but not should not expect as high a price as they could have received two or three years ago. If you are considering trading up to a larger home, now is a great time to do so, since the difference between home prices has also decreased, and mortgage rates are currently very low (as of June 2010). In addition, we are now beginning to see signs of an upward trend in sales that could push prices up. So, if you are considering buying a home, please contact me at your earliest convenience to start looking. If you are considering selling, please contact me to make sure you get the most up-to-date information and assistance to sell your house without delay. Houses can sell quickly when priced right!

Please feel free to consult the maps as needed:

Los Alamos map
White Rock map