A new report from local real estate professionals says Santa Fe's median single-family home price rose again in the first quarter of the year to $458,941 in the city and county combined. The median sales price for a townhome or condo sits at $300,000.
Yet, the Santa Fe Association of Realtors warns that's not likely to hold.
"The Santa Fe housing market started 2020 with both solid single family and condo/townhome sales along with increased prices," reads a statement from Susan Orth, 2020 president of the association. "With New Mexico now joining the rest of the country in working to reduce the spread of coronavirus (COVID-10), Santa Fe is likely to see some market changes in these unprecedented times even with the rapid and convenient use of digital tools like virtual open houses, online meetings and electronic signatures."
The regular report from the group illustrates some of the other broad strokes of the local housing scene. The choices are limited and demand is high. The inventory of single family homes for sale in the city and county of Santa Fe decreased approximately 32% from 526 in the first quarter of 2019 to 359 this quarter.
It also breaks out the city and county average into urban and rural sales: County median home prices increased by 10% from $530,000 in 2019 to $585,000 this quarter. During this same period, city median home prices rose by about 9% from $355,564 in the first quarter of 2019 to $387,250 this quarter.
The figure is determined from only those sales on the Multiple Listing Service, which does not include every sale in the area, but has been used historically to track trends, according to the association. In the fourth quarter of 2018, the combined city and county median price topped out at $460,000.
While everyone predicts change in the market, its exact direction is uncertain. Santa Fe Properties broker Dave Feldt tells SFR he doesn't expect prices here to fall.
"We don't have that much product to sell to begin with," he says, "and I think the people on both coasts and a lot of other places are going to continue to look to Santa Fe as a haven, as a place where they can get away from the crowded environment…Whether it is COVID or it is fires or weather changes, we are going to continue to be attractive. So, I'm not thinking our pricing is going to drop off that much."
An analysis that accompanies the report says as early as February, as COVID-19 sent the stock market on a downward trajectory, lending markets for homebuyers changed too.
"With volatility across all the financial markets, lenders began tightening underwriting standards and some buyers found they no longer were approved for a loan," it reads, noting later, "While the effect of COVID-19 is varied throughout the country, we are likely to see impacts to housing activity now and into the coming months. Its continued spread is leading many companies and consumers to change their daily activities."
Feldt agrees that's the area where Santa Feans could see big change.
Lending has always been based on past performance such as job history, he says, but now lenders are looking forward with questions such as "What do applicants have for jobs right now?"
"If all the sudden the applicants for the loan have both been furloughed," he says, lenders are "done."
That means speculation and upsizing could slow.
"The advice I give to clients, and I think this is reasonably solid, 'If you are buying a house, buy a house because you need a place to live, and you need to stay there and you need to be able to stay there,'" he says. "But if you are trying to keep leveraging up and all those other things, that may be thinking of the past."