Santa Fe Real Estate Market Trends
Real estate can be a worthy investment opportunity. With research, a plan, and the right price, just about anyone can be a real estate investor. If you are looking at investing in the Santa Fe real estate market as a potential investment opportunity, you must read till the end. Santa Fe is one of the oldest cities in the country, having been founded in 1610. Santa Fe is not the biggest city in New Mexico, but it is the state capital.
Santa Fe has a population of 86,099 (2020). Santa Fe is currently growing at a rate of 0.55% annually and its population has increased by 6.28% since the most recent census, which recorded a population of 81,012 in 2010. Santa Fe County, New Mexico's estimated population is 152,149 with a growth rate of 0.39% in the past year according to the most recent United States census data.
The Santa Fe housing market, however, is larger than this. With a population of 87,505 as of the 2020 census, it is the fourth-largest city in New Mexico. It is also the county seat of Santa Fe County. Its metropolitan area is part of the Albuquerque–Santa Fe–Las Vegas combined statistical area, which had a population of 1,162,523 in 2020. That makes it part of a metro area with more than a million residents. This also means that the larger Santa Fe housing market contains half the state’s population.
Let’s look at ten reasons to consider making a Santa Fe real estate investment. Let’s take a look at the latest Santa Fe housing market trends & forecasts for the next twelve months. According to Redfin, in May 2022, Santa Fe home prices were up 10.6% compared to last year, selling for a median price of $547K. On average, properties for sale in Santa Fe sell after 32 days on the market compared to 41 days last year. There were 188 properties sold in May this year, down from 202 last year.
The Santa Fe housing market is somewhat competitive since only a few properties receive multiple bids, yet it normally takes weeks to sell a property. The average homes sell for around the list price and go pending in around 30 days. Hot listings can sell for about 3% above the list price and go pending in around 17 days.
On Realtor.com, the median listing home price in Santa Fe, NM was $599K in April 2022, trending up 11.4% year-over-year. The median listing home price per square foot was $344.
- Santa Fe real estate market trends show that it is a seller's real estate market, which means that more people are looking to buy than there are homes available.
- A balanced market typically has a total sales to total listings ratio between 0.12 and 0.2.
- Markets with a ratio above 0.2 tend to favor sellers, while markets with a ratio below 0.12 tend to favor buyers.
- The trend for median days on market in Santa Fe, NM has gone down since last month, and slightly down since last year.
- There are about 39 neighborhoods in Santa Fe where Realtor.com has active listings.
- Old Santa Fe Trail has a median listing home price of $2.8M, making it the most expensive neighborhood in Santa Fe.
- San Mateo is the most affordable neighborhood in Santa Fe, with a median listing home price of $350,000.
Santa Fe Real Estate Market Forecast 2022-2023
According to statistics compiled by NeighborhoodScout, property appreciation rates in Santa Fe have been above average for the past decade. The total rate of appreciation over the past decade has been 74.42 percent, which places it in the top 40 percent nationally. This amounts to an average yearly gain rate of 5.72 percent for Santa Fe homes.
Looking at only the most recent twelve months, Santa Fe appreciation rates continue to be among the highest in the United States, at 21.23 percent, which is more than 74.69 percent of the nation's cities and towns. In Santa Fe, short-term real estate investors have achieved success during the past twelve months. The most recent quarter's Santa Fe appreciation rates were 8.37 percent, which amounts to an annual appreciation rate of 37.93 percent.
As of May 2022, the typical home value in Santa Fe is $561,676, up 21.6% over the past year (Zillow Home Value Index). Between 2019 to 2020, Santa Fe home values went up by 5.65%. Last year has been sizzling hot for sellers as over the past year alone the Santa Fe home values have gone up 19.5% and are expected to continue to grow in 2022. The supply is very tight and with all the other factors considered, at this time, it is unlikely that the Santa Fe housing market will see a price decline in 2022.
Santa Fe County is located in the U.S. state of New Mexico. As of the 2010 census, the population was 144,170, making it New Mexico's third-most populous county, after Bernalillo County and Doña Ana County. Its county seat is Santa Fe, the state capital. Also, the Santa Fe Metro Area is centered on the city of Santa Fe, which only encompasses the county of Santa Fe.
Santa Fe’s real estate dynamic stretches across the Mountain States and elsewhere in the country, where similar factors are in play: a shortage of homes on the market, new home construction failing to meet demand, steeply increasing home construction costs, and a shortage of construction workers.
The Santa Fe Housing Market Area (HMA) is coterminous with Santa Fe County and the Santa Fe, NM Metropolitan Statistical Area in north-central New Mexico, approximately 60 miles northeast of Albuquerque between the Sangre de Cristo mountain range and the Valles Caldera National Preserve.
Single-family detached homes are the single most common housing type in Santa Fe, accounting for 58.68% of the city's housing units. Other types of housing that are prevalent in Santa Fe include large apartment complexes or high-rise apartments (14.84%), row houses and other attached homes ( 9.08%), and a few duplexes, homes converted to apartments or other small apartment buildings (8.90%).
The most prevalent building size and types in Santa Fe are three and four-bedroom dwellings, chiefly found in single-family detached homes. The city has a mixture of owners and renters, with 62.11% owning and 37.89% renting.
- The typical home value of homes in Santa Fe Metro is $532,183.
- Santa Fe metro home values have gone up 21.3% over the past year and Zillow predicts they will rise 9.6% over the next twelve months (May 2023).
- Santa Fe County's home values have gone up 21.3% over the past year and will continue to rise in the next year.
Here is the Santa Fe real estate price appreciation graph by Zillow for the past decade.
Some of the best neighborhoods in Santa Fe, New Mexico are Arroyo Chamisa-Sol y Lomas, Las Campanas Estates, and Sante Fe Historic District. Here are the 10 best neighborhoods in Santa Fe to invest in real estate for the long-term because they have the highest appreciation rates (List by Neigborhoodscout.com).
- Veterans Memorial Hwy / US Hwy 85
- Don Diego / Don Gaspar
- San Acacio
- Torreon
- Greater Callecita
- Las Soleras
- Southwest Bellamah
- Vista Primera
- Ferrocaril / Baca St. sierra St.
- Tres Arroyos
Santa Fe Real Estate Investment Overview
Is it worth buying a house in Santa Fe, NM? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Santa Fe is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Santa Fe housing market forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Santa Fe we have collected ten evidence-based positive things for those who are keen to invest in the Santa Fe real estate.
Investing in Santa Fe real estate will fetch you good returns in the long term as the home prices in Santa Fe have been trending up year over year. Let’s take a look at the number of positive things going on in the Santa Fe real estate market which can help investors who are keen to buy an investment property in this city.
It Has a Strong, Diversified Economy
One of the points in favor of Santa Fe real estate investment is the area’s diverse economy. The job market is not just tied to the level of government employment and tourism, though these are major contributors. Manufacturing, retail, agriculture, and high tech are also sources of high-paying jobs and demand for the Santa Fe housing market. The roughly 4 percent unemployment rate isn’t much better than the national average but much better than the rest of the state, and the far better median household income fuels demand in the Santa Fe real estate market.
As of April 2022, Santa Fe, NM Unemployment Rate is at 3.80%, compared to 4.00% last month and 6.60% last year. This is lower than the long-term average of 4.58%. The median household income in Santa Fe is roughly $57,274, about more than the median income for the state of New Mexico ($51,243).
Property Values Are Appreciating
The median home value in the Santa Fe real estate market hovers around $402,649. Around 36% of the housing units are in the price range of $284,001 – $426,000. Appreciation rates for homes in Santa Fe have been tracking above average for the last ten years. This is due to the faster than average population growth because people are moving to the area for work. This is an improvement on the 1 to 2 percent annual appreciation the Santa Fe real estate market saw several years ago.
The average rent in Santa Fe is roughly 1,655 dollars a month. The area simply isn’t building enough new rental units to accommodate new residents and the large permanent rental markets. Yet this is a bargain compared to the rental rates in the more expensive neighborhoods in the Santa Fe housing market. For example, rents in Chupadero and Cuyamungue are over two thousand dollars a month. Do your research, and you could receive significant ROI on a Santa Fe real estate investment property.
There Is a Large Rental Population
About a one-third of residents in the Santa Fe housing market rent. However, that population is broken up into several groups that are unlikely to buy a home. As the state capital, there are several public and private colleges in the area. The University of New Mexico is the largest, but you can diversify your Santa Fe real estate investment portfolio by owning rental properties near St. John’s College, Southwestern College, the University of Natural Medicine, or the Santa Fe Art Institute.
Geographic constraints and local regulations limit how much new housing and dense housing can be built in the Santa Fe real estate market. This explains why housing in the Santa Fe housing market is roughly 80 percent more expensive than the New Mexico state average. The housing affordability index in the Santa Fe area is around 80, whereas the average would be 100.
This means that a large share of the population can’t afford to qualify to buy the average house in the Santa Fe real estate market. The Santa Fe housing market also faces literal geographic constraints. For example, it is sandwiched between Santa Fe National Forest and Hyde Memorial State Park. Furthermore, several Native American reservations and Pueblos are off-limits to real estate developers.
Seasonal Demand Creates an Unusual Opportunity
The Santa Fe housing market sees a small but significant influx of snowbirds or winter residents. It attracts those interested in its history, arts scene, and educational institutions instead of the perennial golfers heading to Scottsdale, Arizona. This also creates a larger than expected demand for mobile home slots and one and two-bedroom homes for rent.
It Is More Landlord Friendly than a Few of the Alternatives
New Mexico is truly on the edge of being called landlord friendly. It isn’t landlord friendly when you compare it to neighboring Colorado and Texas. Yet it is far more favorable for property owners than Arizona or Nevada. For example, you can charge late fees but they’re capped at 10 percent of the rent. Security deposits are typically set at one month, though longer leases can have a “reasonable” security deposit. If someone is late on rent, you have to send a three-day termination notice. If they pay the rent, they can stay. If they don’t, you can begin the eviction process. For lease violations, tenants have seven days to make corrections. However, if they re-offend within six months, you can begin eviction.
It Is Tax-Friendly for Property Owners
New Mexico has some of the lowest property tax rates in the U.S. The state's average effective property tax rate is 0.78%. The median annual property tax paid by homeowners in New Mexico is $1,403, about $1,200 less than the national median. Santa Fe County may be a good choice for you if you’re looking for low property taxes in New Mexico. The county’s average effective property tax rate is just 0.56%, which ranks as the 17th-lowest out of 33 counties in the state. At that rate, the annual taxes on a home worth $282,600 would be $1,570. In the city of Santa Fe, the total 2020 millage rate was just 24.031 mills.
Conclusion
Santa Fe is often overlooked in favor of larger cities in New Mexico or the more exotic, touristy destinations like Taos. However, the recovering real estate market is ripe for investment. Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Santa Fe, NM is your ability to find great real estate investments in that area.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
This article aimed to educate investors who are keen to invest in Santa Fe real estate. Purchasing an investment property requires a lot of study, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and taking the help of a real estate investment counselor.
The other best place to invest in real estate in Albuquerque, NM. Albuquerque is an often overlooked real estate market in the West because it doesn’t make headlines. However, the strong fundamentals and positive long-term outlook make it a great place to consider investing. Data by Redfin shows that the Albuquerque housing market is not that competitive. Only a few homes in Albuquerque receive multiple offers. The average homes sell for about 3% above the list price and go pending in around 12 days. However, a hot listing can sell for about 7% above the list price and go pending in around just 5 days.
Another sizzling market to invest in real estate in Sacramento, CA. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market. It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.
One of the reasons to snap up a Sacramento real estate investment over one in the hotter real estate markets is that the area is safer overall. Sacramento has a slightly higher property crime rate than other big cities in the cities, but Sacramento has a much lower violent crime rate. People are more concerned about being mugged, raped, or murdered than having their car broken into. The nonviolent crime stats are also skewed due to the more lenient authorities in San Francisco and Los Angeles.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you may fill up the form given here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
- https://www.zillow.com/santa-fe-nm/home-values
- https://www.movoto.com/santa-fe-nm/market-trends
- https://www.neighborhoodscout.com/nm/santa-fe/real-estate
- https://www.redfin.com/city/18007/NM/Santa-Fe/housing-market
- https://www.realtor.com/realestateandhomes-search/Santa-Fe_NM/overview
- https://livability.com/nm/santa-fe/business
- https://www.forbes.com/places/nm/santa-fe
- https://www.bestplaces.net/housing/city/new_mexico/santa_fe
- https://sparkrental.com/new-mexico-rental-laws-guide
- https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
- http://money.com/money/4533659/where-retirees-go-winter-months
- https://www.areavibes.com/santa+fe-nm/cost-of-living
- https://www.santafenewmexican.com/life/real_estate/santa-fe-home-prices-increase-as-inventory-goes-down/article_1c24acac-1f61-5da6-a1b1-8415e271238c.html
