Santa Fe home builders are in some ways time travelers — caught in a three-year warp where the homes they began designing and building in 2006 based on one set of consumer, market and regulators' expectations and demands are no longer relevant three years later.

"They were marketing one thing in 2006, but it's completely different today," said Kim Shanahan, executive director of the Santa Fe Area Home Builders Association, lead sponsor of Haciendas — A Parade of Homes.

What's different today? According to the home builders themselves, four of the key factors that have crippled home building in all price ranges and made making a living difficult for builders are:

• Persistent caution by would-be buyers even as the recession shows tentative signs of abating.

• The city's recently enacted green-building code — developed in great part by the builders themselves — which imposes new requirements and accompanying expenses on builders. Despite the increased costs, area builders generally support energy and other resource conservation provisions of the new code. "We are never going back," said Gerry Barber, owner of Madera Builders.

• Steadily increasing supply and other building costs.

• Perhaps most significantly, the system of appraising homes that relies on comparative values of similar homes in the midst of a historically depressed market.

Builders design and begin laying the groundwork for construction of the home, only to have a banker or other lender deny them a loan because the appraisal of their project would not even cover the cost of its construction.

"Appraisals are in such a free-fall, appraisers are being extremely conservative," Shanahan said.

Barber said he sees movement within the finance industry to address the problem. The appraisals need to be based on "a more realistic value of the homes — like what it would be in a normal market," Barber said.

Builder Ray Gee, owner of Siteworks Inc., said that adding insult to injury, even as appraisals have nose-dived, the cost of building homes has increased and is expected to continue do so, especially in the spring of 2010.

"There is little we can do to control the costs," Gee said. "Many of the (supply) manufacturers saw this coming, so supply is reduced but the demand is still up."

Another factor affecting the livelihood of builders is the continued skittishness of would-be buyers to venture back into the market. However, several builders said that after months of silence, at least the phones are ringing again, though few consumers are writing checks.

"You can't blame people for holding off," Gee said. "It's a very difficult thing to commit to building a house."

As a result of consumer reluctance, building homes on speculation has nearly dried up.

"I'm not speculating because I don't have a death wish," said Bob Kreger of Kreger Design Build, who focuses on building green homes.

"Most spec lending is done by local banks," said Shanahan. "And they are flat out not lending." And that's because the banks have had to repossess too many spec homes, he said. "The contractors could not keep up on the payments ... and they had to give the keys back."

Another factor builders must consider in a bigger way than they did three years ago is the added cost of building green — even though the builders were a major force behind the city's new green code.

"The problems are multiplied when you are doing green," Kreger said. For example, appraisers still struggle to deal with the initial added costs of building to the green code standards. A few years ago, the green premium cost amounted to about 25 percent; now, said Kreger, it's 40 percent.

Kreger said buyers are beginning to ask for homes "that look like an Escalade but perform like a Prius ... and people can finally get that, but there is a green premium attached to it."

Builders are also finding that they have taken on the roles of educators — telling buyers that, yes, they can add luxury features, but because of the green code, which builders consider a good thing, it will likely cost more, though such green additions will pay off in the long run.

Dennis Carroll can be reached at 986-3091 or dcarroll@sfnewmexican.com.

IF YOU GO

Haciendas — A Parade of Homes will be open for tours from 11 a.m. to 6 p.m. Friday, Saturday and Sunday. Selected homes will be available for tours from 11 a.m. to 9 p.m. today. Tickets are available through the Lensic box office or at each of the homes for $15. Some of the proceeds will benefit programs at Santa Fe High School and St. Michael's High School.

For more information on the homes tours, visit www.santafehometour.com.