‘Buyers Have A Lot To Choose From’ In Santa Fe
The Free New Mexican has this rare report from Santa Fe. “Santa Fe homes are overpriced all right, but the excess is nowhere near places such as Naples, Fla., or Salinas, Calif., according to a study. In fact, Santa Fe’s overvaluation is slightly lower than Farmington’s.”
“Santa Fe real-estate agent Alan Ball, who is a board member of the Santa Fe Association of Realtors, doesn’t think there’s much to worry about when it comes to overpriced homes in Santa Fe. ‘I said previously there’s no out-of-control price appreciation, and it’s still true,’ he said. ‘It’s even more solid and true than before.’”
“Richard Mares, owner of Mares Realty, agreed that real-estate prices are high in Santa Fe, but he doesn’t believe they’ve gone up any more than can be expected. ‘In Santa Fe, we don’t have the peaks and valleys we see elsewhere,’ he said. ‘It’s pretty much steady as she goes. I keep reading about real-estate busts elsewhere, but it’s never going to happen here.’”
“The study showed the price for a single-family Santa Fe home in the first quarter of 2006 was $267,900, compared with $246,000 in the first quarter of 2005. That’s an increase of 9 percent. Another study had somewhat more sobering information to offer, it indicated New Mexico ranked 12th in a list of house-price appreciation by state for the 12-month period ended March 31. The state’s price rose by 15.88 percent.”
“Santa Fe housing prices aren’t negative, of course, but they aren’t charging ahead, either, Ball said. ‘A fractional increase is normal,’ he said. ‘Some huge jump would be very scary for me.’”
“Any rapid price increase, similar to what happened in housing booms in Phoenix and Denver, would be unwelcome in Santa Fe. ‘Developers here don’t build more than they can sell,’ he said. Developers would build more than they do now, but the City Council ‘controls everything,’ Mares said.”
“In other cities, municipal government helps with infrastructure, which lowers the cost of development for home builders. Not in Santa Fe, Mares said. ‘Unless we do it any differently, high home prices ‘are always going to be the case,’ he said.”
“As for high-end homes, they may not be drastically overpriced, but they tend to stay on the market for months because there are so many of them for sale, Mares said. ‘Buyers have a lot to choose from.’”
Interesting how locals take comfort that other cities are more over-valued than them. Farmington?
I think this is the first time this blog has had a Santa Fe report. Any input from those familiar with this market is appreciated.
Hi Ben,
I’ve been watching Santa Fe real estate in hopes of finding the right home out there, for about a year now… The folks that peg their asking prices on the high mark are seeing their properties stay on the market for up to year, some longer.
New listings are coming on lower than equal properties a year ago — so in spite of Ball’s remark, ‘A fractional increase is normal,’ the reality of a cooling market is beginning to sink in.
As for me, I’m sitting it out a few more years (though trends tell me I won’t have to wait that long) for the panic to truly set in with these sellers…
Do you have any info on rents in Santa Fe? I drove through Farmington a few years ago. I couldn’t see any barrier to building. That part of NM should be dirt cheap.
Hi Ben,
I saw some stats on renting and also barriers to excessive development at the original article you posted…
I can tell you that rents in Santa Fe are pretty ridiculous unless you are a rich person staying for the summer or something.
I love Santa Fe and again, tried to find something to rent there. It’s a lot like Flagstaff except that the jobs pay better and the wealthy locals are REALLY wealthy.
Santa Fe is definitely not different that alot of places. A good friend and his family moved there in the mid-90’s and bought a house. They are down right stunned at what houses sold for in the last couple months. Housing appreciation is 2-3X over the last few years. Its a great place, but local wages do not support the current prices.(seen that comment alot on this blog) From what my friend told me most of his new neighbors are older couples from the NE and California. They are contemplating cashing out, renting for a few years, then leaving. They would like to stay but, would like to move a another state where public schools are good. New Mexico has very poor schools. They also don’t think alot of retired couples will support higher taxes for better schools.
Santa Fe is a beautiful old city, but it seems like it has the smallest middle class of any American city I’ve ever visted. Quite a few poor people; quite a few rich people; not so many middle income folks. Completely anecdotal evidence I’m afraid.
Wish I could live there, but it’s at 7,000 ft. and I can’t be at high altitudes. Seems even more laid back than coastal California.
‘In Santa Fe, we don’t have the peaks and valleys we see elsewhere,’ he said
Some other things Santa Fe doesn’t have: decent paying jobs, good public schools, opportunities for young people, water.
I ran an analysis of home prices by decade, state by state the numbers are available on US census Bureau.
To my great surprise New Mexico appreciation was greater than CALI-F ornia…since 1940…there fore it has the greatest to collpase over this great bear market super cycle!.
‘In Santa Fe, we don’t have the peaks and valleys we see elsewhere,’ he said. ‘It’s pretty much steady as she goes.’
http://www.housedata.info/NM/SantaFe/
What peaks? What valleys?
I wish I had a dollar for every time I heard that about the area I’m in. Now we’re in the midst of a full-blown correction. Time will tell, Santa Fe.
““The study showed the price for a single-family Santa Fe home in the first quarter of 2006 was $267,900, compared with $246,000 in the first quarter of 2005.”
Huh? My wife and I always wanted to retire in Santa Fe. Last summer we visited there to check things out. The only houses remotely acceptable (1800-2000 sq.ft.) to us were priced to LA housing…$600K and up. I don’t know how far out of the city you have to go for $268K.
Once again it was price per sq.ft. and it was the same for new or used housing……
When in Santa Fe I spent time talking to some business owners about RE in the area. They informed me that a lot of Europeans were buying into the area and driving up housing prices…..
With the Euro buying power those buyer’s are paying the equivalent of USD 2002-03 prices! If the Euro turns down with our RE market (quite possible with an increase in our Prime Rate) then they get banged twice!
Actually, it’s just the opposite. If the Euro goes down while they own the property, they get a bigger return in Euro’s.
If the US $ keeps going down, then they’ll lose money.
“I keep reading about real-estate busts elsewhere, but it’s never going to happen here.’”
NEVER? Well, excess capacity and low demand usually means lower prices. Economics 101. This guy crack me up.
simmssays…adorable LCD monitors for kids
http://www.americaninventorspot.com
I had a realtor in Santa Fe tell me that last summer too. Funny, but a few months later, she was on the phone with some “reductions” in her listings.
‘I said previously there’s no out-of-control price appreciation, and it’s still true,’ he said. ‘It’s even more solid and true than before.’
Translation from Realtorese: it was a lie before, but it’s true now that prices have flat-lined or have started to drop.
“Richard Mares, owner of Mares Realty, agreed that real-estate prices are high in Santa Fe, but he doesn’t believe they’ve gone up any more than can be expected. ‘In Santa Fe, we don’t have the peaks and valleys we see elsewhere,’ he said. ‘It’s pretty much steady as she goes. I keep reading about real-estate busts elsewhere, but it’s never going to happen here.’”
or here:
‘I think there are some areas where you see some softening, but Tallahassee is strategically poised to grow.’”
and delighted in some places.
“I’m absolutely delighted that things have slowed down,” said Alan Nevin, director of economic research for MarketPointe Realty Advisors in San Diego.
“I keep reading about real-estate busts elsewhere, but it’s never going to happen here.’”
Of course everone wants to live there. The nice weather and beaches.. Oh shit thats California. Never mind ur screwed!!
It doesn’t matter where you look. As this real estate crash takes hold all markets will get hit. All these markets, including those overseas, are all linked together.
The locust real estate investors have driven everything up, and now they are going to pay the piper.
I’m not buying for at least 2 years, as it will take that long to reverse the insanity of the last 2-3 years. It might take even longer.
“Any rapid price increase, similar to what happened in housing booms in Phoenix and Denver, would be unwelcome in Santa Fe. ‘Developers here don’t build more than they can sell,’ he said. Developers would build more than they do now, but the City Council ‘controls everything,’ Mares said.”
There was no rapid appreciation in Denver over the past 6 years. His argument is similar to the one the real estate experts used to give for Denver: Denver is not in a bubble because there has been no rapid appreciation like in California, Florida, etc. I think that he has read how Denver is crashing so he assumes that it must have had rapid appreciation over the last couple of years. NOT!
So, can someone give me a synopsis or range of opinions on Albuquerque? What’s it like in terms of job growth and costs? Why so little mention of it relative to other places near there?
Albuquerque, like a lot of other places, has been seeing a lot of new construction. Most of the building is on the west side of town, across the Rio Grande. Prices are reasonable when compared to other areas, but wages here are really low and prices are out of whack for income levels here.
There seems to be a fair amount of “upscale” loft and condo development in the downtown area and from what I’ve read a lot of it is sitting empty.
Prices are still going up and things are still selling quickly as far as I can see. A house 2 doors down sold in less than a week. I don’t see for sale and open house signs all over the place like other here report seeing in other cities. A friend who has been a realtor here for almost 30 years is always busy and is seeing lots of clients from CA and other places come in and buy in cash.
Albuquerque’s been making a lot of those “best lists” that magazines do.
Only real possible job growth seems to be in the film industry. A lot of movies are being made in New Mexico these days thanks to incentives from the state. There’s talk of a studio permanently setting up shop here.
The biggest detriment to real growth has to be the water situation which is only getting worse.
Pepe Daniels - send me an email at ambell1@iwon.com - been here in ABQ for about 5 months.
need 2 leave ca - You’ve got mail.
Jim M. Thanks for the information and insight. It’s a beautiful area. I’d love to got there but am a little jitttery about the job/economic outlook. Thanks again.