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Barker Realty offers a quarterly, comprehensive look at the Santa Fe real estate residential market derived from the industry’s most extensive database of transaction data.
At the halfway point of 2024, we are seeing the first signs of market stabilization: inventory is up, price reductions are more common, and the buyer pool can negotiate further than before. Looking at other markets like Austin, TX, and Denver, CO, we’re seeing a significant rise in inventory and Santa Fe is not lagging far behind. Sellers may not welcome that news as buyers have more options and leverage and the market becomes more balanced, however, the appreciation in home prices over the past few years has provided lots of padding.
There are hints that the Federal Reserve may finally lower interest rates, just as prices begin to plateau. This, coupled with strong inventory, could provide more ‘normal’ market conditions for buyers and sellers. And honestly, doesn’t some normalcy sound alright right now?
It’s no secret that real estate has been in the news quite a bit recently so we thought it would be best to cover the major topics to keep you informed. While how we conduct a transaction might change due to these requirements, having a highly qualified broker to help you navigate potential challenges when buying or selling real estate in Santa Fe has never been more important.
2023 will be the year remembered as the year our housing market started to find a new equilibrium. With interest rates peaking and cooling demand, many expected prices to correct more aggressively, however, that still wasn’t the big elephant in the room. Our inventory woes continued into 2023 and that propped up pricing, with the Santa Fe market still showing a modest 2.6% increase in median prices.
Overall demand did slow down, relieving buyers from the pressure of making fast decisions and sometimes frustrating sellers, who otherwise were expecting a frenzy of activity of years past. Our days on the market have returned to a healthy 60-day cycle, indicating we should see pricing stay relatively stable for the time being.
With many new housing projects coming to fruition and more initiatives in the works, we are somewhat optimistic that our housing challenges will start to correct heading into this new year and some balance will return. We are also expecting the Federal Reserve to move slowly in bringing down interest rates, so buyers may need to weigh their priorities if ‘the one’ becomes available anytime soon. In the meantime, we look forward to continuing to help all of you in Santa Fe navigate these market shifts, so please don’t hesitate to stop by the Railyard and say hello–we’re here to help.
If you’re feeling like there are a lot of mixed signals out there, you are absolutely right. We simultaneously have more homes for sale with higher costs of ownership and increased uncertainty, yet our prices and demand are holding strong. We believe this boils down to Santa Fe continuing to be a highly sought-after destination–both for the second home buyer and also the young professional working remotely or for the National Labs.
Given the huge success of our summer markets, concerts, and local events, it is clear Santa Fe has regained its former national spotlight and continues to be a strong city for real estate. And while city leaders and the voting public wrestle with the challenges this brings, we remain optimistic that timely changes and a renewed focus on these issues will lead to a better community in the long run. Now, let’s get to work together.
Earlier this year all signs pointed to a significant slowdown, especially after multiple record setting years in 2021 and 2022. Yet somehow the second quarter of 2023 came back with a roar and we’re now seeing a similar scenario across the board: near record high prices, multiple offers, and still plenty of cash purchases. Where we differ is which part of the market is the strongest? The comparatively slower middle segment of the price range suggests that the interest rates are indeed having a large impact, especially for those who would typically move up market. Leaving a lower interest rate behind in search of a nicer home is a real debate being had within many households.
Across the country the story can be much different depending on your location. We’ve seen big declines in major cities, even those in the West that typically are strong when others sputter. Looking at our contemporaries in areas like Bend, Jackson, Tahoe or Bozeman, the story is much more similar to ours: competitive market, high prices, and still an influx of cash buyers. Thus, while the real estate market nationally finds a new normal, destination cities like our own continue to be highly desirable and competitive and frankly, we don’t see that changing anytime soon.
Spring is here and just like the flowers sprouting from the ground, new listings have begun to steadily emerge in our market. Year over year we have experienced a substantial increase in inventory and prices have dropped some since their peak in the summer of ‘22. Sellers should not be concerned, however – we’re still seeing multiple offer situations and well-priced homes that are not testing the market are moving at a healthy pace. For buyers, there are more options available and sellers are finally back at the negotiation table. While interest rates may be a hurdle, there are clever options available via savvy lenders. Do your research and your time will be well spent.
As we head into the busy season we expect to see more listings, increased competition with buyers, and a steady churn of inventory with prices relatively flat compared to the previous year’s explosive growth. We’re seeing a rebalance in our market and a return to a healthier parity between buyers and sellers. If you have been sitting by the sidelines, now is a great time to get an updated market analysis or to explore your options if you’re looking to buy.
We think it’s safe to say the frenzy of the pandemic real estate boom has come to an end, but many things will remain changed long into the future. Buyer expectations have changed as have sellers–cash is king and being creative with offers and negotiations is now standard practice. Santa Fe has an elevated allure on the national psyche and we continue to see strong demand for well-priced homes as new construction begins to provide some much-needed inventory to our depleted market. While sales and prices are down across the board, they have fallen from a peak we all knew was unsustainable and we’re returning to a healthier, balanced market for 2023.
Despite the national headlines, we feel that 2023 will start a little slow and pick up pace throughout the remainder of the year. Many homeowners and longtime investors are looking to sell as larger building projects come to fruition, giving buyers a much-needed change of pace and options. This will, of course, affect pricing to some degree, but we anticipate relatively flat changes there as inward migration continues.
We think it’s safe to say the frenzy of the pandemic real estate boom has come to an end, but many things will remain changed long into the future. Buyer expectations have changed as have sellers–cash is king and being creative with offers and negotiations is now standard practice. Santa Fe has an elevated allure on the national psyche and we continue to see strong demand for well-priced homes as new construction begins to provide some much-needed inventory to our depleted market. While sales and prices are down across the board, they have fallen from a peak we all knew was unsustainable and we’re returning to a healthier, balanced market for 2023.
Despite the national headlines, we feel that 2023 will start a little slow and pick up pace throughout the remainder of the year. Many homeowners and longtime investors are looking to sell as larger building projects come to fruition, giving buyers a much-needed change of pace and options. This will, of course, affect pricing to some degree, but we anticipate relatively flat changes there as inward migration continues.
A Shift In the Market // It’s not your imagination; the real estate market is going through a transition. Like our dramatic swing from a hot and smokey June to a cloudy and wet July, we are seeing signs that the market is leveling off and recalibrating to the current economic climate. We are in unprecedented waters, however, and while we admit it is impossible to predict the future we can look at key indicators, historic data, and our brokerage’s shared knowledge to try and make sense of the current market conditions. One could argue this shift is long overdue and will help bring needed balance to our market.
Over the winter we felt a little cooling take effect. Some homes sat on the market longer and prices seemed to catch their breath. That reprieve was short-lived, however, as we enter the traditionally most active buying and selling seasons: spring and summer. Our market is beginning to show some changes where buyers are choosing to sit by the sidelines as sellers push the boundaries of pricing. Distressed properties – once too undesirable for investors or DIY’ers – are finding new life and buyers are evaluating areas not traditionally sought after, much to the benefit of those localized sellers. Here at Barker Realty, we’re meeting with our brokers and clients daily to evaluate strategies, negotiations, and expectations as the market changes.
Santa Fe has more buyers than homes. Mortgage will play a critical role in the coming year. According to Bankrate, mortgage rates have reached their highest levels since April 2020. Given the two previous years’ appreciation and the potential for higher interest rates, now might be a good time to evaluate your real estate value and adjust your strategy and thinking as necessary. At Barker Realty we have more than 70 real estate professionals who can help you think about your real estate strategy for 2022.
At the end of 2020, we thought we had seen it all, but 2021 proved us wrong. The rate of change in our real estate market has been hard to quantify but here we have some standout numbers: an increase of nearly 12.5% in the number of sales and a massive increase of 32% in total sales volume over an already record-setting 2020. Santa Fe is a popular destination for many Buyers. We saw continued interest from major metro areas with inbound buys coming from Los Angeles, Dallas, Denver, and Seattle. We expect this type of demand to continue.
Elation or frustration? We’re at risk of sounding like a broken record in reporting new record averages and extremely low inventory, yet here we are! The unpredictability of the current market continues to surprise even our most seasoned brokers. Some trends have remained steady, however: move-in ready homes in desirable neighborhoods continue to attract multiple buyers and command a premium, buyers continue to flock to Santa Fe for its quality of life and to take advantage of their newfound career flexibility, and until current construction catches up with demand we will see prices remain high.
After 2020 we thought the average price would continue to creep upwards as demand never waned. Now in the final months of 2021, that prediction still holds true. Buyers need to be ready to pounce and to be creative in their offers, while sellers enjoy the benefit of this bounty, they too need to proceed cautiously as we are starting to see buyers balk. Working with the right broker in today’s market will be the difference between elation or frustration.
Spend a summer evening in the Railyard or downtown and it’s clear that Santa Fe has emerged as a top destination for both tourists as well as new residents. It should be no surprise, then, that our average and median prices are the highest we have ever experienced. There are signs, however, that we may be nearing the high-water mark as some properties are requiring price changes and days on market increase ever so slightly.
Buyers continue to be well qualified, staving off concerns of another housing bubble. The city and community partners have been working hard to address affordable housing needs and new homes continue to trickle into the market – hopefully providing opportunities for first-time buyers and relieving some of the pressure the unprecedented demand has created.
Will the residential real estate market slow down anytime soon? It seems unlikely.
Santa Fe has long been a tiny blip on the radar screen as a place for those looking for a new home in the U.S., typically attracting an older semi-retired demographic while our youth moved elsewhere for jobs and excitement not found here. This has dramatically shifted as we see the average age of those moving here dropping. The job market here together with a high quality of life are driving this change of our in-migration and provides our community with a new set of opportunities and challenges. Local political leadership is astutely managing these with sensibility and a balanced agenda.
What a year we had in real estate for 2020! We’re entering 2021 with record low inventories and our December average sales price was up a whopping 25% over where we started in January of last year. Construction costs have been increasing the past several years nationally by about 5% per year but local contractors will tell you it’s certainly more than that in Santa Fe. With little inventory of resale homes, we’re finally seeing a marked increase in new construction in both housing and apartments. That’s good because we need more options for buyers. Transactions of vacant residential land sales increased 77% between the 1st and 4th Quarters while the average price was up only 5.5% to $154,000.
There will be no diminishment of out of state buyers coming into Santa Fe; we’re seeing a younger demographic moving here and a higher percentage of them making Santa Fe their permanent residence as opposed to a 2nd or 3rd home. All this bodes quite well for owners of a residential property but makes it more challenging for the first time home buyer.
2020 has proven to be the year of the unexpected and our real estate market is no exception. Where we feared a crash due to the pandemic, the opposite has proven true: sellers are enjoying competing offers and record-high prices, while buyers are needing to make quick decisions while also being patient. Typically the election would also play a factor by slowing the market down, but this is an atypical year and we do not expect these market conditions to change anytime soon.
We certainly have never been through such a challenging and uncertain time as we are experiencing socially, economically, and politically both locally and worldwide. We are sensitive to the pain we are witnessing and remain steadfast in our belief that we will get through the pandemic while our economy goes through its major shifts and begins to slowly recover. New Mexico continues to do a good job containing the fallout. Santa Fe residential real estate is again proving to be strong, reliable, and safe. We continue to find many opportunities in our market for buyers and sellers alike as we carefully navigate through this.
Our Country and our World were not prepared for the challenges we now face. Circumstances change quickly as this unseen enemy passes through and the personal tragedies and economic hardships will be life-changing. Thus far, Santa Fe and New Mexico appear to have avoided the brunt of this and with safe practices, we can only hope that will continue. Not surprisingly, we are seeing many more of our transactions take place with local Santa Feans. And the pace of our transactions, while evidencing some slowdown, has shown remarkable resilience. We believe the residential real estate market will come through this strongly and serve as the backbone for economic recovery on the other side.
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530 S. Guadalupe Street
Santa Fe, NM 87501
Phone: (505) 982-9836
All real estate advertised herein is subject to the Federal Fair Housing Act and Equal Opportunities Act. Barker Realty Co., llc. strives in to confirm as reasonably practical all advertising information herein is correct but assumes no legal responsibility for accuracy and should be verified by Purchaser. Barker Realty Co., llc. is not responsible for misinformation provided by its clients, misprints, or typographical errors. Prices herein are subject to change. Square footage amounts and lot sizes are approximates. The data relating to real estate for sale in this web site comes in part from the Internet Data exchange (“IDX”) program of SFAR MLS, Inc. All data in this web site is deemed reliable but is not guaranteed. © 2022 Southwest Multiple Listing Service, Inc. All rights reserved. Internet Data Exchange (IDX) listings are from Southwest Multiple Listing Service, Inc. (SWMLS). IDX information is provided exclusively for consumers’ personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. All information is deemed reliable but is not guaranteed accurate by SWMLS. Built by the Barker Realty Marketing department.
