This article originally appeared in The New Mexican on December 30, 2013 and is syndicated from The New Mexican.
By Bruce Krasnow, The New Mexican, December 30, 2013
Except for the stock market, nothing else bounced in the Santa Fe business community this past year. But for most entrepreneurs, job seekers and homebuyers, 2013 was a year of slow and steady progress. There were more home sales, new renovation and change downtown, and a healthy tourism industry that filled more hotel rooms and restaurants. Job and income growth, however, are still lacking in New Mexico as the state economy is still tethered to federal government hiring and spending — and that is not likely to change in the coming year.
Here are the ups and downs of the 2013 business year in Santa Fe:
Residential real estate
With December numbers still to be counted, it is almost certain that 2013 will bring the most residential home sales in Santa Fe County since 2007. The lower end of the market was especially strong, with more than 100 sales per month for homes under $500,000 — a seven-year high. In the higher-end market, sales picked up in October, and the year saw the most $1 million-plus sales since 2008, according to data provided by Alan Ball of Keller Williams Santa Fe.
At the end of the third quarter, the Santa Fe Association of Realtors reported that year-to-date home sales were up 8 percent, while the total dollar volume of sold real estate in the third quarter rose 18 percent to $187 million from $158 million.
“Do you hear that hum,” the association wrote in October. “That’s the delightful sound of normalcy: Buyers are buying, sellers are selling. Sure this varies from region to region, even city to city, but by and large things are returning to normal.”
Though more homes are selling, it isn’t necessarily the case that prices have climbed. In the 12-month period ending in October, for instance, New Mexico was the only state to see a price decline, although it was a slight 0.5 percent, according to CoreLogic, a firm that tracks real estate trends.
“The consensus is growing that prices bottomed in February of last year. The rebound has been strongest in the Western states — primarily California, Nevada and Arizona. That said, of the 100 distinct markets that CoreLogic measures, 99 showed year-over-year gains. Only New Mexico reported a drop,” wrote the website marketrealist.com on Dec. 4.
Most of the construction activity in 2013 was in the non-residential sector, which is seeing a 40 percent growth in permitting activity from a year ago, according to McGraw Hill Construction. A good chunk of that is probably the result of two large downtown hotel projects — La Fonda’s renovation and the Drury Hotel project on Paseo de Peralta between Alameda Street and Palace Avenue.
Smaller developments on Cerrillos Road brought a new CVS pharmacy and Ashley Furniture store as well as the continued development of Las Soleras, where a McDonald’s and Starbucks took shape across from the Wal-mart Supercenter.
On the horizon for 2014 will be a string of health care-related projects: an outpatient clinic by Presbyterian Healthcare Services on St. Michael’s Drive; a new Veterans Affairs outpatient clinic at Las Soleras and a south-side primary care center by Christus St. Vincent Regional Medical Center.
The main Christus hospital on St. Michael’s Drive also is committed to more renovation as it converts patient rooms to single occupancy and is planning an expansion of its intensive care and cardio care units.
All eyes will also be on the main U.S. Post Office in downtown Santa Fe to see what happens to the 30,000-square-foot space. Postal Service administrators said they were negotiating with a new landlord — one possible location is the old Borders space in Sanbusco Market Center — but were not prepared to release further details, a spokesman said in early December.
If the post office relocated, that would leave a large vacant space in the federal building, just a block from the now-empty state District Court building on Catron Street, which is owned by Santa Fe County.
The downtown retail landscape also saw a big change this fall with the closing of the longtime Packard’s on the Plaza store. The new owners, Scott and Karen Malouf, opened a new retail business in the space during Thanksgiving week.
Tourism and hospitality
The biggest positive note on the jobs front was the resurgence of the leisure and hospitality sector — both in Santa Fe and statewide — as renewed interest in cultural tourism and the Breaking Bad cable series sparked increased interest in New Mexico.
The tangible results have been tourism growth — hiring in the sector has now surpassed prerecession levels — and hotel occupancy levels are ahead of last year.
Statewide, occupancy reached 61 percent through November, up from 59 percent a year ago. In Santa Fe, yearly occupancy stood at 64.8 percent at the end of November, up from 59.8 percent a year ago, according to the Rocky Mountain Lodging Report.
Finally, the city of Santa Fe has seen a rebound in the amount of gross receipts tax it collects from economic activity. The tax is the broadest measure of local spending by both residents and tourists, and captures everything from retail purchases to contract work, private tutoring, art purchases and real estate commissions. In the first six month of the 2013-14 fiscal year, GRT collections are up almost $3 million from a year ago, a 6.7 percent boost.
Better still, for the first time the revenue is tracking about where it was for the first six months of the prerecession 2007-08 fiscal year.
“The fact that the increases are spread out over almost the entire range of categories is a good sign for the overall improvement of the local economy from a year ago,” city Finance Director Marcos Tapia said in an email. “We know there was concern about the possible impact of the 16-day federal furlough in October, but if it affected us, it is hard to identify in these numbers.
“While the trend this fiscal year has been surprisingly strong, the February GRT report containing Christmas and Holiday spending will still be of major importance since that is consistently the largest monthly GRT amount of the year.”