SF County median home price exceeds $789K
Jul. 6—Clarification appended
Interest rates are up, inflation is at a 40-year high and home sales nationwide have been sliding since January.
The real estate world is hinting boom times are ending and home prices could be softening. But that's what the experts thought at the beginning of the pandemic, and look what happened.
No matter how you view it, conventional wisdom meets its match in Santa Fe and Santa Fe County, where home sales dropped in the second quarter of 2022 to their lowest level since 2011 — but the median home price in the county for the same time period rose to (take a deep breath) $789,385. That number does not include city figures.
The median price in both the city and county is $675,000.
That's a 22 percent increase from the same quarter a year ago, according to statistics provided Tuesday by the Santa Fe Association of Realtors.
The up-up-and-away nature of real estate in the area amazes even the experts, though they sound a note of wariness as they review the numbers.
"I think Santa Fe can sustain higher prices, but I don't know for how long," said Andrea Dobyns, president of the association's board of directors. "As long as homes are available for buyers, we are in such a strong place [with prices]."
Closed home sales across the city and county dropped 20 percent in the second quarter from a year ago to 393 — the lowest in 11 years. More telling, within the city of Santa Fe, only 214 home sales closed, 17.4 percent fewer than second quarter of 2021.
It was one fewer than in the first quarter.
Generally, home sales, like clockwork, soar from the first quarter into the warming months of the second quarter.
But Santa Fe's nearly nonexistent inventory continues to bedevil the market — or at least those looking for a pocketbook-friendly purchase. Not counting the opening months of the pandemic, the city had the lowest second quarter housing inventory since officials began keeping records in 2005.
Homes were on the market for an average of only 17 days in the second quarter — half the time they were available a year ago, and just a fraction of the 150-plus days from 2007 to 2015 and the 50 to 100 days from 2015 to early 2021.
"I don't see prices declining because we don't have enough supply," said David Barker, qualifying broker and owner of Barker Realty. "I don't believe we are overvalued for a moment. Santa Fe continues to attract buyers to our community. What's new to our market that started about two years ago, maybe a couple more years, we are having buyers that are young couples with or without children. We have never seen that before."
Moody's and Fortune magazines earlier this year determined Santa Fe homes are 30 percent overvalued in a report that analyzed 392 metropolitan statistical areas and found 96 percent were overvalued and 149 were overvalued by at least 25 percent.
Boise, Idaho, was the most overvalued in the country at 73 percent, Moody's determined. Mountain cities were comparable to Santa Fe, with Denver rated 35 percent overvalued, Boulder at 29 percent, Salt Lake City 31 percent and Albuquerque 17 percent.
Las Cruces and El Paso were considered only 2 percent overvalued, according to the publication.
The lowest median sales price in the city and county fell where a large share of Santa Fe's population lives, including the midtown area, the city's south side and Agua Fría: in other words, everything west of St. Francis Drive between Alameda Street and Interstate 25.
That median home price in that area is now $450,000 — the lowest among the 10 sectors in the city and county the Association of Realtors surveys.
That part of the city saw median home prices increase 14.6 percent since last spring and $50,000 just from the January-February-March quarter to the April-May-June quarter, the association reported.
"That's a tough thing to swallow," Dobyns said. "But we are still selling homes to first-time homebuyers. The demand here is always higher than the supply."
The median home price for the city of Santa Fe rose 21.5 percent in the second quarter year-over-year to $583,371.
The association calculated a 12.9 percent increase for the city and county combined to $675,000.
The National Association of Realtors in May reported a national median annual home price increase of 14.8 percent to $407,600, the first time the country as a whole had existing homes selling for more than $400,000.
"It's unusual for us to go contrary to national trends," Barker said. "Santa Fe has a tendency to follow national trends with a delay."
The housing affordability index in Santa Fe — an association calculation based on area median income — cratered to 34, its lowest number since 2005. Still, there are more buyers who can afford to buy than there are homes for sale.
"The demand is still there," Dobyns said. "There's still multiple offers on housing and they sell quickly. Buyers have to be super prepared. Cash buyers are always looked at cheerfully by buyers."
Barker, however, said he has seen the hint of a new trend, even as recently has the past couple of weeks.
The second quarter report could already be ancient history.
"My observation now is buyers are slowing down their purchasing process," Barker said. "There is a little nervousness. We're seeing properties now coming on the market that six months ago or a year ago were selling very quickly. They are not selling as quickly now. There are still portions of the market, if your property is the right price, you will get multiple offers and strong sales — but that portion of the market is decreasing rapidly."
Higher priced homes, he said, may become harder to sell.
"But there is still tremendous pressure on the lower price range," said Barker — defining lower price range as up to $800,000.
Clarification: A previous version of this story mentioned $789,385 as the overall median home price for Santa Fe County. That is the median home price for the county NOT including the city of Santa Fe. The median home price for city and county areas combined is $675,000.
