When it comes to Santa Fe area home prices and sales, these are the Roaring ’20s.
Santa Fe County median home prices soared to a record $560,000 in the first quarter of 2021, a 22 percent jump from a year ago. Inside the Santa Fe city limits, the median home price rose 9.5 percent year-over-year for the same time period.
At the same time, the number of homes on the market dipped to record lows, according to the Santa Fe Association of Realtors’ quarterly property statistics.
Perhaps the most telling data point in the astronomic rise in prices can be seen in the area’s lowest-priced sector of homes — an area roughly bounded by West Alameda Street, South St. Francis Drive, Interstate 25 and N.M. 599 at the west end. It’s the heart of working-class Santa Fe.
Over a two-year period from first quarter of 2019 to first quarter of 2021, the median price in that sector — where about one-third of all homes in the county are sold — exploded from $287,000 to $352,000.
“It does make it harder on the buyer,” said Beverly Chapman, broker/owner at Coldwell Banker Trails West. “That is a significant difference in that price range. We were having a problem getting [homebuyers] into $287,000 and now we have to get them into $352,000. We have buyers waiting for anything under $300,000.”
She said many potential homebuyers living here don’t qualify for homes costing more than $300,000.
Broken down, median home prices across the city were up 9.5 percent over last year to $428,000, and across the rest of the county, prices rose 13.5 percent to $650,000.
Out-of-state buyers rule the Santa Fe roost these days, especially north of N.M. 599, where median prices in the first quarter hit $1.3 million, itself a 62 percent increase from $815,000 a year ago, according to SFAR.
But competition is fierce between Alameda and the freeway, too. Buyers have to be ready to act swiftly and have financing in place — and that’s no guarantee.
“I’ve seen sellers say, ‘I’d like to get $390,000,’ and a week later they are under contract for $450,000,” said Roger Carson, the association’s board president and an agent at Keller Williams Realty Santa Fe. “It changes the flavor of who lives here. We’re seeing more out-of-state people.”
Local buyers essentially have to remove home inspections from their offers and take on the seller’s closing costs and have lots of cash, Chapman said.
“You have to write the most squeaky clean, noncontingent offer you can write,” Chapman said. “If you have a loan, you will probably lose out to someone with cash.”
Santa Fe has become even more of a magnet for outsiders seeking escape from the big city and COVID-19-prone regions. The pandemic has put remote working and early retirement in vogue, and Santa Fe has risen high as an ideal candidate for both.
“The year of COVID has definitely increased the demand for housing in Santa Fe,” Carson said. “A lot of people figured they would retire here in five years are saying, ‘Screw it, I’m retiring now.’ Or they spent two weeks a year in Santa Fe and the rest in San Francisco. Now, they are living here and spending two weeks in San Francisco.”
The housing crisis — with soaring prices and low supply of homes — is not limited to Santa Fe, but the area’s twist is that homebuilding essentially stopped for a decade after the 2008 recession, Carson said.
“For so many years, we were building way under what we needed, and that’s catching up with us,” Carson said.
End result: The inventory of homes for sale at the end of the first quarter was 169, the first time that number has been below 200 since the association started tracking statistics in 2005 and far below the 443 homes available at the end of the first quarter of 2020. That adds up to a 1.1-month supply in a real estate dynamic where about six months is considered balanced between buyers and sellers.
“I don’t see where it goes back to equilibrium in the next couple years,” Carson said. “It’s unhealthy. All the power is on the seller side. Buyers are just at the mercy of the market.”
Housing construction has rebounded in the last few years with more than 300 homes built at Las Soleras between Cerrillos Road and Presbyterian Santa Fe Medical Center, and 16 apartment complexes with some 1,500 units in various stages of planning, construction or recent completion.
Residential land sales were up 38.7 percent from last year in the first quarter, and the price of land rose only 7.2 percent across the county.
“People are buying land and hoping to build, but it’s expensive to build right now,” Chapman said.
Part of the shortage of homes on the market is homeowners are sitting tight and not listing homes that usually would be sold. Santa Fe’s four quarters in a year have always been entirely predictable, meaning the most homes are on the market in the second quarter, the fewest in the fourth quarter.
This winter, for the first time since at least 2005, the first quarter had fewer homes listed than the fourth quarter, according to SFAR statistics.
“It’s a great time to sell,” Chapman said. “You will probably get top dollar for it. But where are you going to go? Where are we going to put you?”