2nd Quarter 2008 - Las Cruces Home Sales Report

Observations:

* We continue to see a sharp drop in year over year sales for the second quarter but continued strength in both average and median home prices.  Why?  We did not have the irrational behavior in home buyer / speculators / investors as seen in such markets as Las Vegas, Phoenix and Florida.  Their irrational behavior, thinking prices would increase forever, drove up demand in a radical fashion thus prices.  We did not have this level of insanity in Las Cruces thus stable and strong pricing structure.

* Current year trend is positive for sellers.  We have seen an increase of 15% and 20% in units and total sales volume respectively in the second quarter compared to the first quarter.   Average price increased 4% over the first quarter thus driving up overall sales volume. 

* Average days on the market trend was tempered in second quarter.

Forecast:

* The wild card in our national housing economy is the fate of Fannie Mae and Freddie Mac who hold over $5 trillion in home loans.   They are both "to big to fail" meaning the government will intervene to rescue them if needed.  However, the psychological damage to the home buying consumer would be deep.  Still too early to tell as of this post (July 11th).   Indications are showing the national recovery in housing will go later into 2009 and maybe early 2010.  Again, "national" perspective.

* Locally, we will soon (meaning very soon) be blessed with a tremendous increase in military personnel at White Sands Military Base.   Las Cruces will see approximately 500 new soldiers by end of 2008.  There will be additional soldiers coming as follows:  861 - 2009, 861 - 2010, 861 - 2011 and 869 for 2012.   The total projected increase by the start of 2013 is 4,856.   THIS DOES NOT INCLUDE ADDITIONAL CONTRACTORS TO SERVICE THE BASE OR COMMUNITY SPIN-OFF (re: teachers, nurses, etc......).

* Not all the soldiers and their families will live on base.  If fact the vast majority will live in the Las Cruces community.  The ARMY projects that there will be over 600 "home buyers" from this influx over the next 4 years.  Again, not including all the spin-off.   All of this is great news for our local economy and will continue to shield and buffer Las Cruces from the national plight.

Please feel free to email me regarding questions at:  john@steinborn.com