In a year when Santa Fe home sales are treading water, there are some signs that the high-end market might be in the early stage of a recovery.

The freshest evidence comes in the sale of a $10.5 million Tesuque estate that had been owned by developer Jay Ross and his wife, Marcia. The couple built the house with designers and materials from all over the world, and it includes an outdoor pool, waterfall, seven-stall horse barn, tack room and horse arena. The sale covered the 10,930-square-foot main residence, a 2,500-square-foot guesthouse, 14 acres of property and a 40-acre conservation easement around the land, as well as an adjacent 2.6-acre parcel.

The transaction is believed to be among the most expensive residential sales ever in Santa Fe County — perhaps surpassed only by the 20-acre Sol y Sombra property once owned by Georgia O'Keeffe and where she spent the last year of her life. Charles and Beth Miller bought that residence in 1987 from the artist's estate and developed it as a wildlife habitat.

When it sold in 2000, the Millers entered into a privacy agreement with buyer Paul Allen, Microsoft co-founder. The asking price of that property was $12.2 million, and it is now on the tax rolls for $13.6 million. It is unknown if Allen ever stays at the estate.

The Tesuque Ridge Ranch property, just off Bishops Lodge Road north of Santa Fe, was built by Ross for him and his family and had been featured in the national press, including a story in The Wall Street Journal when it went on the market for $21.5 million in 2008.

Neil Lyon of Sotheby's International Realty took the listing last summer and priced it at $13.5 million. Lyon said he had two offers before it closed in March for $10.5 million.

Ross told The New Mexican in 2005 that he and his wife lived down the street and used to explore the area on horseback — not knowing if it was national forest or private land. When he found out the land was part of a large parcel owned by the family of Arthur "Curly" Welsh, he approached the family and son Lee Welsh for possible purchase. Arthur Welsh was a Santa Fe High grad who went into banking, then real estate and became a prominent philanthropist. He was honored as a "Santa Fe Living Treasure" in 2003.

"It was amazing to me," Ross said. "Here was a 225-acre parcel that was still left close to town. ... We negotiated for six months and came to terms, then I developed the concept of retaining a large portion for myself and turning about half into a luxury subdivision (Tesuque Ridge Ranch), while retaining the trail system and keeping it as open as possible."

Those close to Ross said he devoted his life to his wife, the home and its surrounding land. And then his wife of 27 years came down with cancer, and her death in July was heart-crushing. An obituary for Marcia Ross, 56, said she died "peacefully at home, surrounded by her family, beloved dogs and the mountains of Santa Fe she so loved."

Jay Ross passed away at age 57, "peacefully at home" on March 20, according to an obituary in The New Mexican — just a few days after the sale of the estate closed.

The buyers of the home declined an interview request. "It's a couple that first bought a vacation home in 2007. They came here and love it, and their kids love it, and want to come as well," said Realtor Lyon.

New Mexico is one of the few states where the price of a real-estate sale is not disclosed publicly. The sale was, however, reported to the Santa Fe Association of Realtors Multiple Listing Service and is one reason the average (mean) home price spiked more than 18 percent in the first quarter, while the median price rose just 1.2 percent.

Tax records indicate the parcel, at 49 Rancho Escondido in Tesuque, is held by Walsh LLC, and Thomas J. Walsh is listed in incorporation records as director.

But LLC names can be deceptive. When Santa Fe native Tom Ford purchased a home on Talaya Hill east of downtown in 2005, the ownership was listed as Angus Buckley LLC, named for Ford's companion of 20 years, journalist Richard Buckley, and their fox terrier, Angus.

Figures compiled by Lyon indicate high-end home sales so far this year are above 2010. There were 25 closed sales of homes in the $1 million to $2 million range in the first quarter of 2011, up from 17 last year. And six homes above $2 million closed in the first quarter of 2011, up from just one a year ago.

Lyon said the sales were driven by the rising stock market, a decline in prices — and the perception that prices will not deteriorate further. Low interest rates also play a part, he said, though many in this market are paying cash.

"I think we're going to see a recovery in the high-end market — if we can use 'recovery' with great restraint," he said.

Alan Ball, a title agent who publishes a blog on the Santa Fe real-estate market, said one quarter does not make a trend. But inventories have come down, which is good because homes are taking longer to sell. In the $1 million-plus price range, on average, just seven homes a month sell — down from 14 a month in 2006, according to Ball.

Stagnation in the greater market also reduces inventory as prices have declined and there is no new construction. In 2005, he said, a seller would just have to wait a year or two for a $750,000 property to escalate into a $1 million sale.

"It's very rare that you'll find a property that truly appreciated in the last few years," Ball said. "A property that's just been maintained and kept in spotless condition has probably not grown in value."

Lyon is also cautious because spring sales looked somewhat positive last year, then retreated.

"Any world event can bring this to a standstill in days," Lyon said last week — just one day before the stock market dropped 140 points.

Lyon represented both buyer and seller in the Rancho Escondido transaction and under the standard industry commission of 6 percent would have grossed more than a half a million dollars for Sotheby's. But in Santa Fe's luxury real-estate market, everything is negotiable.

"It was a large fee, but probably less than most people think," he said.

Contact Bruce Krasnow at brucek@sfnewmexican.com.