Mansion Global
For the first time, the New Mexico capital made the top 10 on the quarterly Wall Street Journal/Realtor.com Housing Market Ranking
Santa Fe is attracting home buyers for its easy lifestyle, vibrant culture scene and mild climate.
For many U.S. luxury home buyers, the highest-priced properties aren’t necessarily what make a market the most valuable—the livability and affordability of the locale are becoming increasingly important, according to the latest Wall Street Journal/Realtor.com Housing Market Ranking, released Thursday.
For instance, St. Louis, which has now topped The Wall Street Journal and Realtor.com’s luxury market ranking in back-to-back quarters, has the lowest luxury median listing price of the list’s top 10, at $697,417. The ranking defines luxury as the top 10% of a metro area’s housing market.
“I think value means more than just how much someone is paying for a home—it’s also offering that quality-of-life aspect that you might not find in some of those traditional luxury metros,” said Anthony Smith, senior economist at Realtor.com.
Similarly, Santa Fe, New Mexico, has found its way into the list’s top 10 for the first time, and not necessarily for extremely lavish properties—though the metro area’s luxury median listing price is $2.7 million. Instead, buyers are flocking there for the city’s easy-to-live lifestyle coupled with the cultural sophistication of a bigger city.
“There’s not much traffic in Santa Fe and prices are still pretty affordable per square foot compared to other luxury markets such as Aspen [Colorado], Palm Beach [Florida] and the Hamptons [in New York],” said Darlene Streit, a broker at Sotheby’s International Realty – Santa Fe. “We’re a small town with a big town feeling—we have a lot of world-class restaurants, museums, and an arts and cultural scene.”
The quarterly Wall Street Journal/Realtor.com Housing Market Ranking is based on key housing market data, as well as economic vitality and lifestyle metrics, for the 60 most-active luxury metropolitan areas in the U.S. The ranking aims to highlight housing markets that offer a high quality of life—accounting for factors like lifestyle offerings and climate—and are expected to see future home price appreciation. It identifies high-end markets worth adding to a house hunter’s shortlist—whether the goal is to live in it or rent it out.
Santa Fe’s high “amenities” score, factoring in offerings that include shopping and family activities, helped propel it to the No. 2 spot for the second quarter, Smith said. That’s despite scoring lower on the supply side, given it has tighter inventory than many of the other 60 metro areas included in the luxury rankings. Wages in Santa Fe are also notably higher than many of the other markets, Smith noted.
“Santa Fe really stands apart from other cities within New Mexico and is one of the biggest hidden gems within the Southwest,” he said.
Still, Santa Fe has seen inventory grow over the last quarter without noticeably impacting prices, said Kyle Klain, co-leader for Barker Realty, a brokerage based in the city.
“Prices have remained steady—I don’t see inherent appreciation or depreciation, they’ve been flat, which is a change from the appreciation we’ve experienced the past five years,” Klain said. “We’ve seen a significant uptick in inventory, so buyers right now have a lot more options on the table, which is surprising that the pricing really hasn’t reflected that.”
Klain added that while Santa Fe is one of New Mexico’s pricier cities, it remains a good deal compared with other luxury markets in the West, such as Jackson, Wyoming, and Telluride, Colorado.
“When you’re looking at metros like St. Louis and Santa Fe, when you’re looking at the top 10% of homes, it’s a lower luxury entry point,” Smith said. That’s an attraction for a buyer who might not be able to afford what might be considered “luxury” in another market. ”
Santa Fe has specifically become popular with second-home buyers and buyers looking to retire in the near future. According to recent data from Realtor.com, 9.2% of homes in Santa Fe are vacation homes, notably above the national average of 3%. The second-home market there has largely attracted buyers from Texas and, more recently, California and Arizona.
“We’ve had some people come because of the fires and different natural disasters that have happened in California,” Streit said. “It’s pretty stable in Santa Fe, we haven’t had, thankfully, a big natural disaster in town. Perhaps, it feels a little safer.”
According to second-quarter cross-market demand data from Realtor.com, Maricopa County, Arizona, topped the list for out-of-state listing views, accounting for 20.1% of searches. Dallas County, Texas, followed at 6.5%. Los Angeles County ranked No. 5, making up 3.8% of searches.
“We have a lot of Texans who tend to spend their summers here because we rarely break 90 degrees [Fahrenheit], compared to many of the metros in Texas, so they come up here in the summer for a mountain escape,” Klain said. “Come the holiday season and the winter, they tend to come to those second homes and use them for their family gatherings for Christmas or an excuse to go skiing.”
Given its milder climate, Santa Fe is also attractive to retirees and increasingly so, as more popular retirement spots, like Florida, become more difficult—and more expensive—places to live.
“It’s perhaps an easier place to retire than some other places,” Streit said. “Florida used to be a great, easy, inexpensive place to retire, but it’s become fairly costly.”
By contrast, she added: “Santa Fe is still a pretty good price in comparison, and it’s not overrun with people.”
Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp. The Wall Street Journal is also owned by Dow Jones.