Santa Fe housing market most robust in decade

Santa Fe housing market most robust in decade

The Santa Fe-area housing market in 2017 saw the largest number of sales in more than a decade, and average home prices were some of the highest since the national housing bubble burst in 2008, according to new data released by the Santa Fe Association of Realtors.

The new report shows the number of sales increased by 15 percent for the last four months of 2017 over the same period in 2016. Overall, sales in 2017 jumped by 11 percent over 2016 sales, to 2,919 from 2,629, and the pace of sales picked up more by than 26 percent — with homes on the market a little over three months before selling last year, compared to more than four and a half months the previous year.

The median sales price rose 4.2 percent in 2017, to $325,750, and the average price rose by 8.2 percent, to $434,337.

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“Santa Fe had a strong end to the year in both home sales and total volumes,” association President Kurt Hill said in a news release on the group’s final quarterly report for 2017.

The strong year for real estate agents and home sellers — Keller Williams broker and blogger Alan Ball had predicted it would reach $1 billion in sales for the first time in a dozen years — had downsides, however, for many city and county residents hoping to become homeowners.

The housing affordability index — which compares the median household income of an area with the income needed to purchase a median-priced home — is on the decline, and the inventory of local homes on the market has dropped to its lowest level since at least 2005, according to the association’s report.

An affordability index of 100 means a family earning the area’s median income is bringing in just enough money to purchase a median-priced home; Santa Fe’s index is now at 90, down from 99 in 2016. That means earnings are 10 percent too low to cover rising home prices.

That compares to a national index of over 150 in the first three quarters of 2017, a decrease from about 165 in the three previous years. Fourth-quarter national figures for 2017 were not yet available.

In an interview Thursday, Hill said finding any kind of affordable housing is increasingly difficult in Santa Fe, where the rental market also has tightened and prices have risen. With little new construction occurring to ease the demand, he said, “the supply of housing is just absolutely horrible.”

Addressing the lack of lower-cost single-family homes for purchase, as well as rental units, is one of his top concerns, Hill said. He added several proposed projects in 2017 met with opposition from neighbors.

“We have a real problem with NIMBY-ism,” he said.

Hill hopes to encourage a rise in what he calls YIMBY-ism — “yes in my backyard.” Support for housing developments must come not just from people living in a neighborhood where a project is proposed, he said, but from people throughout the community who understand the pressing need.

“We need to get a lot more permits in the pipeline,” Hill said.

Alexandra Ladd, special projects manager for the city of Santa Fe’s Office of Affordable Housing, said there are some projects in the works. She expects about 2,000 new homes and multifamily-housing units to be constructed in the next couple of years, including 87 lower-cost — or “affordable” — homes, which could help put a dent in the estimated 2,500-unit gap.

Hill said his organization estimates the housing shortage to be closer to 6,500 units, a situation that has allowed prices to soar by some 20 percent.

“That’s scary for a local person,” he said.

Still, Hill said, the uptick in the housing market is a sign the local economy is strengthening. “So that’s a positive.”

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