Housing inventory up, but prices remain high
Home prices across Santa Fe County and the city continue to hover above most of the state, but recent data from the Santa Fe Association of Realtors points to an increase in new listings and inventory of homes for sale for the first three months of the year.
According to the Santa Fe Association of Realtors, the median sale price for a single-family home was $631,250 in the first quarter of 2024, which translates to a year-over-year increase of 6.1% but is down from a median of $670,000 toward the end of last year.
Meanwhile, single-family home inventory jumped 6.4% to 298, and new listings stood at 377 — a more than 20% increase from the previous year.
While those increases are well and good, says association President Joshua Maes, it doesn’t necessarily reflect a strong change in Santa Fe’s real estate market — which has flirted with rather low inventory, much like the rest of the state, over the past decade. Maes, also a real estate agent with Sotheby’s, said it does, however, reflect that the Santa Fe area is headed in the right direction.
He said the monthly supply of inventory, which measures the number of months it would take to sell the current inventory of homes at the pace of sale and was 2.6 for the first quarter of 2024, is a bright spot with its year-over-year increases. In 2022, that number stood at 1.2; it increased to 2.3 by the beginning of last year.
“If you look at the inventories for home sales back in the first quarter of ’22, it was 198. And then the first quarter of ’23 [it was] 280. The first quarter of ’24 was 298. That’s a good direction,” Maes said. “When you have more inventory for buyers to choose from, then it makes for a more equitable proposition for a buyer.”
The southwest side of Santa Fe — which made up more than 64% of sales in the city last quarter — had a median sales price of $472,250, while in the northwest and northeast areas closer to the Plaza, the median hovered anywhere from $500,000 to close to $1.2 million.
Maes noted some development is happening in the southern portion of the city, where home prices remain cheaper than other areas of Santa Fe. He said the higher prices closer to the Plaza reflect the “desirability” of that area.
“How I described Santa Fe to outsiders is if they’re coming from a coastal community, you know, your prime real estate is beachfront property. The closer you are to the beach, the higher the property value, the higher the desirability,” he said. “Our Plaza is the beach. That’s our coast. So you’re going to have more desirability the closer you are to the Plaza.”
Either way, mortgage rates continue to be an issue for buyers and sellers alike. While some economists last year predicted a drop with possible rate cuts by the Federal Reserve, they have not decreased to a place that may be comfortable for some.
Freddie Mac, a government-backed lender, said a 30-year fixed mortgage averaged a rate of 6.88% and a 15-year rate stood at 6.16%. For both, those were increases from the previous week. Between January and March, the 30-year fixed rate, the most common for homebuyers, hovered between 6.6% and 6.9%. That’s compared with lows of 2%-3% seen during the onset of the coronavirus pandemic.
“I think that when you have a seller that has a low interest rate and then they see the inventory, they kind of ask themselves, ‘OK, I can sell it and get a premium, but where am I moving to? And what’s my acquisition cost going to be?’ Interest rates are a big component of that,” Maes said. “And then we have buyers that are going to hold out and hope that the interest rates are going to go down.”
Maes also said it’s too soon to tell what trends are ahead for the local market.
“I think it’s really hard to predict in our market because it’s so unique,” Maes said. “There’s so many quadrants, so many different areas. … It’s it’s still very desirable to move here.”