Santa Fe home prices increase as inventory goes down

The price of a home in Santa Fe, N.M., was up again in the second quarter, while the number of homes for sale was was down, the Santa Fe Association of Realtors reported Tuesday.

The median sales price for single-family homes, condominiums and townhomes combined in the city reached $358,500 between April and June, an 8.4% increase over the same period in 2017. The average sales price reached $448,552, a 5% increase.

More homes were sold in the second quarter this year, 292, than the same period last year, 260. But continued demand and a shortage of inventory is partly behind the rising price. The number of homes for sale fell in the second quarter by more than 27%, to 1,129.

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"What caught my eye primarily is that inventory still is way down," said Kurt Hill, association president, on Tuesday. "Inventory is the thing that speaks the loudest."

The number of homes for sale has fallen steadily as the average and median sales prices have risen since 2015. And buyers are continuing to pay more of the asking price, an average 96 percent in the second quarter.

For single-family homes alone, the median sales price rose 14.2%, year over year, to $365,000. In the priciest corner of Santa Fe, the northeast, the median sales price was up 4.5% to $805,000. In the least expensive corner, the southwest, the median price was $288,958, or 15.6% higher than during second quarter 2017, according to sales statistics compiled by the Realtors association.

The housing affordability index calculated by the Realtors association fell again to 79 in the second quarter, meaning median household income in Santa Fe is 79 percent of what is necessary to qualify for a median-priced home under prevailing interest rates. The affordability index reached a high of about 110% in 2015.

Although the Federal Reserve increased the federal funds rate again recently by 0.25%, the second interest rate hike this year, the 30-year mortgage interest rate did not increase, according to the association. Nonetheless, buyers who anticipate a mortgage rate increase will act to lock in the current rate, adding to overall price increases and straining affordability, according to the Realtors association.

Hill, a member of Santa Fe Mayor Alan Webber’s task force on affordable housing, said the group will continue to meet through July. Topics of discussion include ways to fund affordable housing, ways to increase housing stock and land on which to build, and changes in city policy to encourage development.

"I’m hopeful we can get some mini policy changes and some willingness to do some appropriate development," Hill said. "I’ve never seen a community more interested in pushing the needle forward in housing than I do now. I can’t describe it more than a sense, a community involvement, an eagerness. It just seems pervasive; it’s a nice pervasiveness to have."

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