A  private master bedroom, graced with a large fireplace, continues the theme of  stunning mountain views. His and Hers closets, a master bathroom with an infinity tub, dual sinks, and stand alone shower complete the master suite. The remaining two guest/kids bedrooms and bathroom are located in their own wing, adjacent to the large laundry room. 

Every detail of this home has been perfectly and beautifully planned, and every finish is of only the highest quality.

Located only 10 minutes from downtown Santa Fe, but with a distinctly rural feel, this home could make a great equestrian estate, family home, or New Mexico retreat!

Direct Link to the Youtube Video

Contact Matt Desmond and Ryan Bolton

This top ten list is as follows:

1)  Bend, Oregon: Once a destination town, now a highly sought after place to live, Bend represents a great place to find retirment real estate.

2) Las Vegas, Nevada: Into shows, gambling, and the sun.  Las Vegas has all of these.  Combine that with a giant inventory of homes, and prices 50% off what they were only a few years ago, and you’ve got a deal.

3) Phoenix, Arizona: See Las Vegas, without the gambling.

4) Napa, California: Fantastic weather, great proximity to a world class city and pristine vineyards, lower prices have made this a desirable place to find a retirement home.

5) Fayetteville, Arkansas: Home to the University of Arkansas, low home prices reign supreme for retirees.

6) Punta Gorda, Florida: If boating, fishing, and hugely discounted real estate is your thing, this place may be for you.

7) Burlington, Vermont: This beautiful Northeastern hamlet has great restaurants, outdoor activities, and the University of Vermont.

8) Ft. Meyers, Florida: See Punta Gorda, but bigger.

9) Santa Fe, New Mexico: If you’re reading this, you know why this place is so great. If you don’t, give us a call and come visit!

10) Santa Cruz, California: While still expensive, home prices have dropped. Combine that with some of the best California coastline and a laid back attitude and you possibly have retirement heaven.

Link to the U.S. News and World Report Here

Contact Matt Desmond and Ryan Bolton

Madame Butterfly: The season opens with a new production of Madame Butterfly, perhaps the most beloved of all operas, which has not been staged here in more than ten years. Kelly Kaduce returns as Puccini’s heartfelt heroine Cio-Cio-San, joined by Elizabeth DeShong as Suzuki and Brandon Jovanovich as Pinkerton. Antony Walker and Lee Blakeley make their Santa Fe debuts as conductor and stage director.

Performance dates: July 2, 7, 10, 16, 23; August 2, 9, 14, 20, 26

The Magic Flute:  The powers of music and of love unite to triumph over evil in The Magic Flute, Mozart’s ultimate opera. Director Tim Albery’s production was a sold-out sensation in 2006 and it returns under conductor Lawrence Renes to cast its radiant harmonies over Santa Fe audiences. Joshua Hopkins and Andrea Silvestrelli return as Papageno and Sarastro, joined by Ekaterina Siurina as Pamina, Erin Morley as the Queen of the Night, and Charles Castronovo as Tamino.

Performance dates: July 3, 9, 14; August 5, 10, 16, 23, 27

The Tales of Hoffmann: The Tales of Hoffmann is Offenbach’s glorious final masterpiece and it has never before been seen in Santa Fe. Tenor Paul Groves stars in the title role, the poet who duels with the unscrupulous Councilor Lindorf over the most glittering of all prizes—the opera star Stella. This new production, conducted by Stephen Lord and directed by Christopher Alden, features Erin Wall as the four heroines, Kate Lindsey as Nicklausse, and Gidon Saks as the four villains.

Performance dates: July 17, 21, 30; August 3, 7, 11, 17, 24, 28

Life is a Dream: Life is a Dream will be The Santa Fe Opera’s newest world premiere. Based on a towering masterpiece from “The Golden Age of Spanish Drama,” the opera by Lewis Spratlan explores provocative questions about the nature of perceptions and reality—and won the 2000 Pulitzer Prize in Music. Conductor Leonard Slatkin and director Kevin Newbury lead a cast that features Ellie Dehn, Roger Honeywell, James Maddalena and John Cheek in the leading roles.

Performance dates: July 24, 28; August 6, 12, 19

Albert Herring: Albert Herring proved that Benjamin Britten could create comedies that were just as successful as his dramatic masterworks such as Peter Grimes and Billy Budd. A turn-of-the-last-century English village is shocked to discover that chaste young women are in perilously short supply, so bashful Albert is crowned “King of the May Festival,” only to launch a night of revelry that leaves his elders aghast and his chums impressed. Fast-rising young tenor Alek Shrader stars in the title role, joined by Christine Brewer as the imperious Lady Billows. This new production is conducted by Sir Andrew Davis and directed by Paul Curran.

Performance dates: July 31; August 4, 13, 18, 21, 25

For schedules, tickets, info, etc. check out the opera website below. And for all of you really big planners, the 2011 season has also been announced. The 2011  line up includes; Faust, La Boheme, Griselda, The Last Savage, and Wozzeck. Have a great season at the Opera!

Link to the Santa Fe Opera Website

Contact Matt Desmond and Ryan Bolton

one of those is the Dale Ball trail system. In Santa Fe, unlike the other fitness “meccas”, you can access the trails within five minutes of downtown. The Dale Ball Trails are 17 miles worth of city own and maintained trails in the foothills of the rockies. This trail system also provides access to the Santa Fe National forest, and endless miles of  hiking, biking, running, snowshoeing, etc.

So please, join us in celebrating and personally thanking Dale, for the gift he has given Santa Fe.

Perfectly sited on almost 3 acres, this impeccably built Tesque estate is certainly worthy of a magazine cover! As you enter the home  you are immediately drawn to the unobstructed Jemez Mountain views framed by the formal living and dining rooms. Just beyond the dining room is the gorgeously appointed kitchen (as profiled in the magazine), and the adjacent large walk in pantry. Open to the kitchen is the family room, which serves as the media center of the home and a great family gathering area. The picture window in the family room also offers expansive views of the Jemez mountains in the distance. A spacious room on this side of the home works well as an office or 4th bedroom- as it is complete with  its own  3/4 bath and walk-in closet.

A  private master bedroom, graced with a large fireplace, continues the  with theme of  stunning mountain views. His and Hers closets, a master bathroom with an infinity tub, dual sinks, and stand alone shower complete the master suite. The remaining two guest/kids bedrooms and bathroom are located in their own wing, adjacent to the large laundry room. 

Every detail of this home has been perfectly and beautifully planned, and every finish is of only the highest quality. The Su Casa article profiles the kitchen nicely, but the entire house deserves it own book!

Check out the Su Casa video of the kitchen below.

Link to Article in Su Casa Magazine

Contact Ryan Bolton and Matt Desmond

The article features many of Santa Fe’s cultural events and spaces, restaurants, and going ons about town.

ARTICLE

36 Hours in Santa Fe
By Fred Bernstein

The Plaza, the heart of old Santa Fe, hasn’t changed much since the Spanish settled here 400 years ago. But surrounding the Plaza is an increasingly cosmopolitan city. Sure, it’s possible to focus entirely just on the historic center, where Native American handicrafts are for sale on every corner.

A Weekend in Santa Fe But the rest of Santa Fe now offers groovy contemporary art spaces, hot Asian restaurants and a park by a pair of trailblazing architects. Accept that Santa Fe isn’t just tacos and turquoise anymore, and you’ll find yourself loving the New Mexico capital not for what it was, but what it is.

Friday

5 p.m.
1) PUBLIC SPACE

For a beautifully curated introduction to Santa Fe, visit the New Mexico History Museum (113 Lincoln Avenue; 505-476-5200; nmhistorymuseum.org), which opened in 2009 and includes a gripping display about Los Alamos, where the Manhattan Project was conducted in secret during World War II. A large courtyard with ancient walls and shady trees separates the museum from the Palace of the Governors (palaceofthegovernors.org), the Spanish seat of government in the early 1600s and now a small museum of Colonial and Native American history. The two-museum complex is free on Fridays from 5 to 8 p.m.

7 p.m.
2) WHITE WALLS AND WINE

You’d have to be crazy to pay for a glass of white wine on Fridays. Canyon Road, which angles up from the center of town, has more than 100 galleries, and there are openings every Friday night. According to canyonroadarts.com, the largest category is contemporary representational (think brightly colored paintings of the desert). Check out Eight Modern (231 Delgado Street; 505-995-0231; eightmodern.net), where you’ll find the geometric scrap-metal constructions of the Santa Fe artist Ted Larsen. The backyard sculpture garden is a great place to marvel at New Mexico’s amazingly clear sky and savor its piñon-infused air before heading to dinner.

9 p.m.
3) AHI MOMENT

Martín Rios is a hometown boy made good: Born in Mexico and raised in Santa Fe, he apprenticed at the Eldorado Hotel and the Inn of the Anasazi — two local stalwarts — and made a brief appearance on “Iron Chef” before opening his own place, Restaurant Martín (526 Galisteo Street; 505-820-0919; restaurantmartinsantafe.com), in 2009. The main draw is the food — dishes like ahi tuna tartare ($14) and duck breast with smoked bacon polenta and Marcona almonds ($25) offer hints of the Southwest, with a dash of global aspiration. But the homey décor makes you want to stick around even after finishing the bittersweet chocolate truffle cake ($8).

Saturday

10 a.m.
4) SPICE MARKET

The Santa Fe Farmers’ Market (1607 Paseo de Peralta; 505-983-4098; santafefarmersmarket.com) dates back a half-century, but it stepped up a notch when it moved to a permanent building in 2008. Everything sold here, including dried chilies, yogurt and grass-fed meats, is produced in northern New Mexico. The market is part of a bustling district that includes the new Railyard Park by the architect Frederic Schwartz and the landscape architect Ken Smith, both Manhattanites whose taste is anything but quaint. As you wander around, be on the lookout for the Rail Runner, a gleaming new passenger train scheduled to pull in from Albuquerque at 11:08 a.m.

Noon
5) SUSTAINABLE SALADS

Santa Fe residents — as you learned roaming the Farmers’ Market — care where their food comes from. No wonder Vinaigrette (709 Don Cubero Alley; 505-820-9205; vinaigretteonline .com) was an immediate hit when it opened in 2008. The brightly colored cafe has a menu based on organic greens grown in the nearby town of Nambé. Choose a base — Caesar, Cobb and Greek are possibilities (around $10) — then add diver scallops or hibiscus-cured duck confit ($7) for a satisfying meal. Wines by the glass start at a very friendly $6.

2 p.m.
6) RIDING THE SPUR

Thanks to Santa Fe’s sometimes depressing sprawl, it’s getting harder and harder to find wide-open spaces. But drive (or bike) to the corner of Galisteo Street and West Rodeo Road, where there’s a small parking lot — then begin pedaling due south, in the direction of Lamy (about 12 miles away). What starts as an asphalt path morphs into a dirt bike trail that swerves around a 19th-century rail spur. There are some pretty steep hills, but they’re short, and the momentum from a downhill is usually enough to handle the next uphill. (If only life were like that!) The scenery is always gorgeous, especially in late afternoon, when the sun is low in the sky. Mellow Velo (638 Old Santa Fe Trail; 505-995-8356; mellowvelo.com) rents mountain bikes starting at $35 a day.

7 p.m.
7) TAPAS WITH STRANGERS

La Boca (72 West Marcy Street; 505-982-3433; labocasf.com) is one of downtown Santa Fe’s most popular new restaurants — thanks to its contemporary tapas, plus larger dishes like cannelloni filled with crab, scallop and Manchego ($11). You’ll find yourself sharing tips on what to order — and even forkfuls of delicious eats — with strangers.

10 p.m.
8 ) REGGAE FOR ALL AGES

Santa Fe isn’t a night-life town, but Milagro 139 (139 West San Francisco Street; 505-995-0139; milagro139.com) is helping to change that. A building that had housed a coffee shop was recently converted to a restaurant that becomes a club on Friday and Saturday nights. There’s no cover, and the drinks, including a house margarita called Beginner’s Luck ($5), are delicious. A recent visit coincided with performances by Rubixzu, a local band that performed a blend of reggae and Latin hip-hop to a diverse crowd, aged 9 to 90. For a trendier vibe, head to Meow Wolf (1800 Second Street; 505-204-4651; meowwolf.com), an alternative art space, or check its Web site for other parties hosted by Meow Wolf artists.

Sunday

10 a.m.
9) FREE-RANGE PEACOCKS

For a big breakfast and an early start, drive south on Cerrillos Road about 10 miles past the Interstate, until you see a handwritten cardboard sign that reads, “Pine wood stove pellets sold here.” You’ve arrived at the San Marcos Café (3877 State Road 14; 505-471-9298). Dozens of peacocks, turkeys and hens roam the property (which also houses a feed store), providing an Old McDonald-like backdrop for crowd-pleasers like eggs San Marcos, a cheese omelet in a bath of guacamole, beans and salsa ($12).

Noon
10) KITSCH TO CONTEMPORARY

If you ever thought that item you found at a roadside stand was one of a kind, Jackalope (2820 Cerrillos Road; 505-471-8539; jackalope.com), a sprawling, indoor-outdoor flea market, will disabuse you of that notion. There are hundreds of everything, including punched-copper switch plates and tote bags that depict Michelle Obama smiling on a swing. If you need to shake off the kitsch, head to SITE Santa Fe (1606 Paseo De Peralta; 505-989-1199; sitesantafe.org), a contemporary art space where the 2010 biennale, focused on moving image technologies in contemporary art, will run from June 20 to Jan. 2, 2011.

1 p.m.
11) YOUR OWN ADOBE

It’s difficult to spend time in Santa Fe without thinking about buying a home (or second home) here. So check out Zocalo (Avenida Rincon; 505-986-0667; zocalosantafe.com), a striking development by the Mexican architect Ricardo Legorreta. He is known for crisp geometry and super-bright colors — a welcome sight in this city of browns and terra cottas. Consider it real estate voyeurism, combined with a crash course in contemporary architecture.

IF YOU GO

Santa Fe has a tiny airport, which offers nonstop service to and from Dallas and Los Angeles on American Eagle. Most visitors fly into the larger Albuquerque airport, about an hour south. A recent Web search found round-trip fares from Kennedy Airport on Delta, from about $260 for travel in June. Sadly, the Rail Runner doesn’t run to the Albuquerque airport.

The Hotel St. Francis (210 Don Gaspar Avenue; 505-983-5700; hotelstfrancis.com), billed as the oldest hotel in Santa Fe, completed a top-to-bottom renovation in 2009, and it looks spectacular. Doubles from $120.

The El Rey Inn (1862 Cerrillos Road, 505-982-1931; elreyinnsantafe.com) is a retro-chic 1930s-style motel, with nicely furnished rooms and beautifully landscaped grounds to go along with the kitschy Native American-themed architecture. Doubles from $99.

Hilton Santa Fe Golf Resort & Spa (30 Buffalo Thunder Trail; 505-455-5555, buffalothunderresort.com) is part of a new casino complex, about 15 minutes north of town. Doubles from $159. Hilton also built a less-expensive Homewood Suites nearby (10 Buffalo Thunder Trail; 505-455-9100, with doubles from $109.

Link to Original Article In The New York Times Here

Contact Ryan Bolton and Matt Desmond

So, now what happens?

With the tax factor/incentive out of play, many predict that the market will see a bit of a hiccup.  In fact, only two weeks after the expiration, national home sales have shown significant declines.  While it’s still to early to look at the entire month of  May statistics, we’re pretty sure there are going to be down ticks across the board.  Showings and pendings have also slowed a bit, both good indicators of what if going on.

These happenings are topped with the highly tumultuous mortgage market.  With the big crashes on Wall Street last week, (and, wow, I just looked at today’s Dow and it’s down at least 100 points) mortgage rates are a 2010 lows again.  However, we also just read that mortgage applications have dropped off 27% since April.  Thus, even though rates are low, not many people are applying. Interesting signs indeed.

In summary, the tax credit has passed but home prices remain incredibly low, which still makes this a great time to buy. If you can lock in a great rate and find a nice place, you just may find yourself a fabulous deal. 

Link the AP Article on April Home Sales Here

Contact Ryan Bolton and Matt Desmond

And according to the American Lung Association, all of these things have an extra level of richness due to the cleanliness of the air.  Currently, Santa Fe is ranked 2nd in the country for cleanest cities in regard to year round particle pollution. This surely won’t come as a surprise to most Santa Fe residents, most of whom bask in the clean, fresh, mountain air daily.

Admittedly, at times during the windy spring months when dust fills the air this may be a bit hard to believe. And like today, when there is a fire in the bosque of Albuquerque, the air quality doesn’t seem all that pristine.  But in Santa Fe we are spoiled.  Most days are crystal clear, and the hues of the sky are unlike anywhere else.

Other cities on the top 25 list include: #1: Cheyenne, WY (not shocking as the population of the entire State of Wyoming hovers around 500,000), #3: Honolulu, HI (ahhhh, Hawaii), #4 Anchorage, AL ( a bit like Wyoming),  #7: Tuscon, Arizona, and #8: Albuquerque, NM (our neighbor to the south).

The cities on the other side of this list include: #1 Phoenix/Scottsdale, AZ (interestingly only a couple hours from Tuscon, #7 on the cleanest list), #3: L.A., CA (really, is anyone surprised?), and #5 Pittsburgh, PA. 

Just another reason to love living in the City Different!

Link to the American Lung Association rankings

Contact Ryan Bolton and Matt Desmond

Max’s opened in late 2007 and has been building a solid reputation in Santa Fe and beyond ever since. The owner, Max (Maxine), and chef, Brian Rood have created a menu that specializes in sustainable and locally farmed meats and produce. The atmosphere is cozy, sophisticated, yet casual, and certainly has an intimate feel.

A sample of menu items include:

Starters:

• Caramelized Onion and Red Potato Soup with Crouton 
• Hong Kong Style Shrimp with Saifun Noodles in Spicy Chile-Leek Ragout with Fried
• Shallot and Broccoli Florets
• Certified Organic, Grass Fed River Canyon Ranch Beef
• Grilled Sirloin Salad with Crouton and Charred Red Onion and Lime Vinaigrette
•  Homemade Duck Confit and Field Green Salad with Herbed Crouton, Roasted Shallot and Red Wine Vinaigrette
• Field Green Salad with Homemade Applewood Smoked Bacon, Local Farm Eggand Creamy Tarragon Vinaigrette

Mains:

• “Cassoulet”; Homemade Duck Confit, Slow Braised Pork Shoulder, Homemade Apple Wood Smoked Bacon, White Beans, Roasted Mirepoix and Parmesan Bread Crumbs
• Certified Organic, Grass Fed River Canyon Ranch Beef; Dry Aged Sirloin Coulotte with Heirloom Baby Carrots, Marinated Grilled Rapini, Fried Shallot and Veal Pan Sauce
• Pan-Seared Red Grouper with Red Potatoes, Braised Kale, Pickled Red Onion, Carrot Leafand Toasted Coriander-Lime Vinaigrette
• Certified Organic, Grass Fed Shepherd’s Lamb; Grilled Lamb Chop and Leg with Grilled Rapini, Roasted Oyster Mushroom Sweet Onion-Potato Confit, Fresh Herbs and Cider Gastrique
• Roasted Green Chile Shrimp and Grits with Homemade Apple Wood Smoked Bacon, Roasted Garlic and Mirepoix
• Vegetarian Homemade Semolina Pappardelle Pasta with Seasonal Vegetables in White Wine Cream Sauce 

When dining there last night I had the spectacular lamb dish, and my dining partner, Jerry, had the sea scallops (not listed on the menu above). The lamb was perfectly prepared, and the accompaniments were a perfect compliment to this rich dish.  The scallops, a somewhat lighter dish, were very fresh, and melted in your mouth. We both started with the field green salad, and, of course, had a nice bottle of Pinot Noir.

From the atmosphere to the food, everything at Max’s was fantastic.  I would highly recommend this restaurant to locals and visitors alike. They are open 7 nights a week from 5:30 to 9:00, and reservations are recommended, especially on weekends.  For more information on Max’s, click on the link below.

Max’s Restaurant

Contact Ryan Bolton and Matt Desmond

ARTICLE

Time to Storm the Castle?
by Nick Timiraos and James R. Hagerty

Daniel Horowitz is ready to bargain.

The 55-year-old trial lawyer is trying to sell a four-bedroom villa with marble imported from Italy, a winery and a fruit orchard on 14 acres in Lafayette, Calif. Mr. Horowitz already chopped the price to $3.2 million from $4 million, the amount he estimates having spent on the land and construction. “We thought it would sell right away,” he says. But it hasn’t, and he is willing to consider lower offers, he says.

Three years into the housing bust, steep discounts are emerging in the market for high-end homes, which had been the real-estate industry’s last redoubt until now. Despite the budding economic recovery, demand for pricey properties is falling as potential buyers struggle to come up with money for big down payments and find it difficult to qualify for large mortgages. With buyers dropping out and homes languishing on the market, sellers are beginning to capitulate, cutting prices to move their properties.

The result: Buyers with lots of cash, or access to it, can find great deals. Not all million-dollar homes are castles, especially in coastal markets. But price drops and relatively small bumps in budget are landing shoppers the kind of amenities—kingly bathrooms, stables, gates—that were once beyond reach. Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, says it is a “very good time to be a buyer at the high end.”

In some markets, houses that are more than twice the size of others are on the market for less than twice the cost. Shaun Rawls, a broker at Keller Williams Realty in Atlanta, points to two homes with similarly desirable locations in that city’s wealthy Buckhead district. The smaller home, with 3,060 square feet, is priced at $765,000, or $250 a square foot. The larger home, with 7,612 square feet, has an asking price of $1.2 million, or $158 per square foot.

Though larger homes often have lower square-footage costs than smaller homes, the gap today is often greater. In Mill Valley, Calif., a 1,127-square-foot three-bedroom listed at $898,000 just went under contract. Its per-square-foot cost: $797. A four-bedroom home five minutes away—and nearly three times the size at 3,077 square feet—is being listed at $1.5 million. Its square-foot cost: $486.

Similarly, in Scottsdale, Ariz., one four-bedroom home lists for $1.2 million while another lists for $1.48 million. That additional $280,000 buys a 5,400 square-foot home, 46% bigger than the cheaper house.

Room to Drop

The million-plus market seems ripe for falling prices. Until now it has been lower-end homes, which saw the sharpest run-up during the boom, that have borne the brunt of the housing bust. Though there aren’t national statistics that track the million-dollar market, local markets show that prices for top properties have room to drop. For example, the bottom third of the Los Angeles area market—currently homes under $300,000—has seen prices fall by 52.5% since the market peak in 2006, returning to April 2003 levels, according to the S&P/Case-Shiller indexes. Prices for the top third of the market—currently homes above $510,000—have fallen by 27.3% from the peak, to March 2004 levels. While prices at the bottom of the market gained 5% over the last quarter of 2009 from the previous quarter, high-end home prices dropped 0.5%.

Home sales across the board remain sluggish. Sales of existing homes fell 0.6% last month to a seasonally adjusted rate of 5.02 million units, while new-home sales fell by 2.2% last month to lows last seen in 1963. But the mismatch of supply and demand is now widest in the seven-figure market. In the most coveted Northern Virginia suburbs of Washington, for example, supplies are fairly tight up to about $900,000. But it is a buyer’s market between that level and $2 million, says James W. Nellis II of Re/Max Allegiance, a local broker.

That makes for some deep discounts. In Mill Valley, Calif., the price on one four-bedroom home was reduced March 11 to $2 million from $3 million. The house has 2,500 square feet of decks overlooking San Francisco Bay, says the listing agent, Suzy Doyle. On Ranch Gate Road in Chula Vista, Calif., a foreclosed home with six bedrooms is being offered at $675,000. In 2006, when it was new, the home sold for $1.3 million.

Few people consider million-dollar homes cheap, of course. Stretching to buy a big home comes with obvious risks. Prices may be falling, but no one knows where the bottom is. Marc Carpenter, a real-estate agent in San Diego, cautions buyers in that battered market that, “If you buy now, [you should] plan on prices reducing over time.”

Another potential pitfall is that higher-end houses are much harder to value than lower priced cookie-cutter dwellings. Often, high-end homes are unique, and the prices they fetch may have to do with such intangibles as an ocean view or an address with more snob appeal than those just blocks away. That makes it much harder for buyers to find comparable sales indicative of true market value.

Bargain hunters also need to be realistic. They aren’t likely to get a steal on the best-preserved homes in the nation’s top neighborhoods—places like Central Park West in Manhattan, Santa Barbara, Calif., or the exclusive parts of Boulder, Colo. Supply is permanently constrained in such areas because there is little room to build. And lots of people with money are eager to move in, so prices are likely to come down only slightly.

The best deals will be on high-end homes that might need work or aren’t in the most highly sought-after locations. That leaves plenty of coveted neighborhoods with good schools and amenities to choose from.
Despite the risks, the mortgage market might be suggesting that shoppers buy sooner rather than later. Many forecasters predict that interest rates will rise from today’s unusually low levels, in part because the Federal Reserve this month is ending its heavy purchases of mortgage securities. Even if waiting another year might bring lower prices, at least some of that advantage could be wiped out by an interest-rate spike.

Interest rates play a huge role in affordability—and even more so in high-end markets. A $1.2 million home today might require a 25% down payment, says Lou Barnes, a mortgage banker in Boulder. At today’s rate of about 5.75% for a 30-year “jumbo” mortgage, that would mean a monthly payment of $5,252. But if rates were to rise to 6.5%, the monthly payment would rise to $5,688. The home’s price would have to fall $1.1 million to keep the monthly payment at a comparable $5,215.

On the demand side, the technicalities of the mortgage market are thinning the ranks of million-dollar home buyers more than usual. Most buyers need a mortgage and would much prefer a cheaper, mainstream one backed by Fannie Mae, Freddie Mac or the Federal Housing Administration. But loans that meet the government’s criteria can be no larger than $417,000 in most of the U.S.; in higher-cost areas like New York and San Francisco, that limit stretches to $729,750.

Loans above those limits are considered jumbos. While rates on jumbos are way down from a high of about 7.9% in October 2008, they remain well above the 5.1% found on conventional loans guaranteed by Fannie or Freddie, according to HSH Associates. What’s more, lenders also require heftier down payments for jumbo loans—in some cases 25% or more of the home’s value.

The shrinking pool of potential buyers is giving people of means unusual bargaining power. The inventory of all listed homes in February was enough to last 8.6 months at the current sales rate, according to the National Association of Realtors, a trade group. For those priced above $1 million, the supply was enough to last nearly 32 months.

Perfect Time to Buy

For these reasons, “this is the perfect time to buy,” says Eric Awad, a neurologist in Atlanta who thinks market conditions are forcing sellers of high-end homes to knuckle under. He and his wife, Nachwa Jarkas, an assistant professor at Emory University, are eager to trade up from their town home and buy a four-bedroom house in Atlanta’s posh Buckhead district. They are looking in the range of $1 million to $1.2 million, though Dr. Awad hopes to “knock the price down” below $1 million.

Like many potential buyers of high-end homes, the couple has a big hurdle to clear: Before buying, they need to sell their town home, which is on the market for $575,000, and they have no idea how long it will take for them to find a buyer. In this still-troubled real-estate market, success favors buyers who don’t have to sell first.

Link to Original Article

Contact Matt Desmond and Ryan Bolton