This interview series focuses on the people in Santa Fe’s real-estate industry. Paul McDonald is a longtime associate broker with Sotheby’s International Realty.
Hi, Paul. Christmas is approaching.
Yes it is and showings are down about 65 percent.
Just the seasonality. Every year at this time we go through this. And although the number of showings is down, in my opinion the people who are looking now, from December through March, are markedly different than those who are looking in August. It’s a pretty serious group; it’s not just “Let’s go get enchiladas and a frito pie and look at houses.”
Lookie-loos! And so how long have you been working in this field in Santa Fe?
I was recruited by Lyle Anderson and I moved here in 2000, when there were 60 homes on the market in Las Campanas.
Where did you come from? Where did you grow up?
What was your path?
I got a B.A in history from the University of Dallas, went back to Minneapolis and started selling stereo equipment for a company called Sound of Music. It became Best Buy. It wasn’t what it is today. We built one superstore in 1984 in Minneapolis, rolling out the big-box concept. I love sales but they moved away from commission sales and having informed people on the floor to cutting prices to bare bones and just having a clerk to sell things. So I got into real estate that year.
What did you do for 16 years before connecting with Lyle Anderson?
I sold a bunch of luxury real estate in Minneapolis and St. Paul.
What companies were you with here?
When I arrived in 2000, I worked at Las Campanas Realty and we were selling 100 lots a year. In 2002 when I left, I think they sold five lots. That’s when I figured I’d better get a day job, so I went to French & French Fine Properties.
And two years after that, French & French merged with Sotheby’s. Now you have a team, the McDonald/Sargent/Lowe Group. Is that something you’ve done for a long time?
No, I’ve had Matt Sargent and Roberta Lowe for just a couple of years, but I’m thrilled with how that’s working out. Matt helps me with Monte Sereno and Roberta helps me with showings.
You’ve been working in Monte Sereno for a long time.
I’m very proud of that. In 2003 I started working with Don Beauregard and the Kimmerer family and then in November 2004 we got our first listing, so as we head into the new year it’s a 17-year relationship. I’m so fortunate to have worked with Don, with his vision, his esprit de corps, and his business acumen.
That subdivision is 600 acres. How much is left?
We just brought eight enclave homes averaging $2 million on the market. We have probaby another 80 estate lots to sell, then there’s the excitement about what will happen with the hotel/resort site; I think there will be some big news in 2021.
That soon, huh?
I believe so. It does take a very thick skin to be a developer. You try to time it right. In 2007, the developer didn’t release more lots and I asked why. Then I heard about the “housing bubble.” It was a great market in 2007 and we had no inventory, then in 2008 the bottom fell out and they looked like geniuses. Then in 2015 Jim Whipkey bought the property and brought Don along as the director of development, Al Lilly was there to do all the technical work and I was there for sales and marketing and we looked like the Blue Brothers. We got the band back together.
It’s a tight market right now, isnt it?
[Realtor] KC Martin had a great quote. She said when she’s working with buyers for the Eastside, if they have 10 things on their want list, she tells them that if they can find 5, buy it. In 2010, there was tons of inventory and the buyer was in charge and they’d run us ragged trying to find the right deal. Now the tables have turned and it’s up to brokers to set buyers’ expectations on what they can get and what they can’t get.
How would you typify the land market?
Land got hit very hard and you could argue it’s still recovering. There are 915 lots for sale in Santa Fe. And frankly it took the sell-through of the existing inventory of homes, which all of us predicted. I mean, who’s going to build a house when you can buy a home for 60 or 70 percent of what it costs to build?
Some Realtors say buyers find the inventory a bit stale.
As you sell through inventory, it exposes your weak points. Lawrence Yun, the National Association of Realtors chief economist, talked last week and he said we’re still under water on new construction. We still don’t have enough inventory in the United States and Santa Fe because the builder industry got decimated in the recession,
What’s the detail on that?
It seems to me we have a lot fewer builders than we had in 2008. They got their asses handed to ‘em, and people building spec homes sat on them and got massacred. So there are fewer builders and also a hesitancy to do specs.
Houses are getting smaller, too. I believe we’ve reeled in the 6,000-square-foot homes and people are going for a little more modest size.
But here we are in COVID and people are home all the time and wanting more space.
I think that’s true with length and width, but it’s the height that’s taken a hit. They don’t build something with 20-foot ceilings anymore. Our average size in Monte Sereno is 3,500 square feet now, and in Las Campanas it’s 4,500.
Are you married? Do you have kids?
Yes. My wife is Ester Campos. We have three kids between us, and they’re all in college.
What do you like doing in your spare time?
Travel. And I’m a former musician so I play guitar and listen to lots of music.
What kind of guitar?
I have a Gibson electric, a Santa Cruz custom acoustic guitar, and a little classical guitar. Blues is kind of my favorite music.
Do you play publicly?
Up until COVID, I played on and off for more than 15 years at a blues jam with the bass player Tone on Canyon Road.
Do you compose?
Yeah, I’ve written a lot of songs, but I wouldn’t play them for anybody.
Another thing that’s fascinating is that the real-estate industry has become a career. It used to be a hobby business and now at Sotheby’s we have brokers who are former attorneys. We have people making over a million dollars a year. It has become a bona fide career and the ethics in our brokers here in Santa Fe is so high. It’s such a pleasure to work with such an educated group of people who work so hard for a solid transaction that you don’t have to watch your back. It’s a tribute to what the industry had become. I mean, why would you leave law to go sell real estate? It’s not just because of the money. Would you rather be doing this or a deposition?