Santa Fe becomes far less affordable in 2022 - Albuquerque Journal

Santa Fe becomes far less affordable in 2022

A for-sale sign stands in front of a house on Upper Canyon Road in Santa Fe. The city’s housing market continues to set records and continues to buck national trends. (Eddie Moore/Albuquerque Journal)

Copyright © 2022 Albuquerque Journal

Low inventory, high demand and construction delays have contributed to skyrocketing housing prices in Santa Fe in 2022, new data from the Santa Fe Association of Realtors shows. The median sales price of single-family homes jumped almost 10%, or $63,980, since April of last year.

With a historically low supply of housing, it’s a seller’s market; the number of single-family homes for sale is half of what it was last year. And it’s worse for townhomes and condos; currently, there are only 22 of these midrange units for sale in Santa Fe city and county.

Journal

“A lot of people like to enter into both the rental and homebuyer market through these smaller options,” said Alexandra Ladd, director of the Santa Fe Office of Affordable Housing. “If you don’t have any of those in the market, then people are automatically priced out.”

The COVID-19 pandemic has made Santa Fe’s housing supply shortage even worse, due to construction and supply chain delays, Ladd says.

“Our housing market ecosystem froze,” Ladd said. “Then, when it picked up again, there was already such a deficit in inventory. … There’s a lot of insidious ripple effects.”

Last year, SFAR found that Santa Fe lacked thousands of affordable rental properties. The association’s most recent housing data shows that Santa Fe continues to trend downward in affordability.

Rebeca Kueber had to move out of Santa Fe due to high housing costs. Kueber, whose husband died in 2013, is a single mother. Three of her five children live at home, and one has special needs.

“There were nights when I was just lying awake at night, looking up at the ceiling, so grateful that we had a roof over our heads today, but not knowing what would happen the next day,” Kueber said, translated by Tomás Rivera, executive director of the civil rights organization Chainbreakers.

Kueber, who works at her friend’s food truck, was renting a space in Santa Fe to park her trailer. Even though she split the cost with a roommate, the rental price was still too high, and she had to move to a cheaper area.

“I leave every morning about 7:30 and have to go all the way across town … to drop the kids off at school,” Kueber said. “It takes me about an hour either end.” She’s still looking for a second roommate to bring down the cost of housing. “After you take into account housing, utilities and gas bills, I’m often not able to make ends meet at all, so I’m looking … for a roommate to help me cover the costs.”

“For a long time, Santa Fe has been unaffordable to most New Mexicans,” economist Kelly O’Donnell told the Journal. “But the jump we saw in 2021 was pretty unprecedented.”

In a March report for Homewise, O’Donnell found that a third of the people who work in Santa Fe have to commute because they can’t afford to live in the city. Most of these commuters travel by car – producing between 10% and 21% of Santa Fe county’s greenhouse gas emissions.

Many of the people who can afford to live in the city, O’Donnell writes, are still “cost burdened” by the price of housing, meaning they spend more than 30% of their income on housing. O’Donnell, who has lived in Santa Fe for more than 30 years, says she has “never known housing prices in Santa Fe to decline.”

Eye on affordability

Both city and state governments have taken action to address the affordable housing shortage. In February, the Santa Fe City Council approved $3 million in funding for several affordable housing projects to support both low-income renters and prospective homebuyers.

Several affordable housing projects are also in the works. Ladd of the Santa Fe Office of Affordable Housing says that Tierra Contenta, a community of mixed low and moderate income housing, plans to expand, potentially adding 1,200 new units. Siler Yard, an affordable housing project for artists has moved in residents after starting construction in 2020. And an affordable housing unit on Calle La Resolana which was met with opposition by some will start moving in residents on April 15.

Relaxed building regulations have also increased the number of small rental properties available in the area. In 2019, the Santa Fe City Council approved a measure loosening casita restrictions, allowing property owners to build two accessory dwelling units on their property. Some hailed this as a win for affordable housing, as more rental units were made available. In the year after the regulation change, Santa Fe city saw 29 new accessory dwelling units built.

O’Donnell agrees that casitas help diversify the housing market; however, she says there are still gaps. Young working families that would rather buy than rent are priced out of the market.

Supply woes

Real estate agents are also struggling against the waning housing supply. Nancy Shaw, a real estate agent for Keller Williams, has worked in Santa Fe for the past 18 years, and she says that her job has only gotten harder.

“These two years have just been difficult and very different from previous years,” Shaw said. “There’s just no inventory.”

Usually, Shaw’s clients would view at least five homes on the market before making an offer, and would easily secure a contract on one. However, because there are less available properties, clients are having to choose between just two or three homes – if they’re able to make an aggressive enough offer to beat the competition. According to SFAR data, houses are staying on the market for less than a month before they’re sold. This change, Shaw says, forces buyers into “hasty decisions.”

“(It makes) home buying three to five times harder,” Shaw said.

Donna Reynolds, government affairs director for SFAR, said that over the past few years, prospective homebuyers have to pay more for fewer housing options.

“You really are at the mercy of the market,” Reynolds said.

Demand for housing has increased as many people move to Santa Fe, Reynolds says, as remote workers are attracted to Santa Fe’s weather, culture and overall quality of life.

Wildland firefighter Ryan Kochany moved to Santa Fe from Richmond, Virginia, in early March, leaving his bartending job to work for the Forest Service at the Santa Fe National Forest. Moving to Santa Fe to fight fires was, Kochany said, “the dream.”

However, one-bedroom apartments were pricey; Kochany was initially planning to rent a camper, which still cost $1,000 per month. Because wildland fire fighting is seasonal work, with seasonal pay, Kochany says that many other Forest Service employees bunk in apartments together.

He ended up finding a casita for under $900 per month, although he still has to commute 40 minutes to work. “Not ideal with the gas prices,” he said.

But he doesn’t regret the move.

“Santa Fe is a pretty amazing place. It’s got a lot of amazing art. Got a lot of amazing culture,” Kochany said. “I wouldn’t want to be anywhere else in the world, to be honest.”

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