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Our Team

• Mike Baker
• Penelope Vasquez

Historically in Santa Fe, there has been a limited supply of desirable real estate. As the demand increased prices went up. Surely the demand is going to keep up, or even increase, and that will tend to support real estate prices or drive them up.

The counter to increasing demand is supply. Sure, we have lots of unsold inventory in certain price ranges here and that makes part of our market soft, but there really are several markets here defined by combinations of price and location which are booming. Generally, the lower the price range, or closer to the Plaza the better the market. A case in point is the very expensive East Side, which still does the best of any market due to its location and lack of viable supply. But that's not the big supply/demand equation that will most control our long-term values.

An Equity Gap exists in most U.S. markets because expensive homes became that way due to inflation. Many of these homes are owned by sellers who do not make incomes parallel to that needed to pay cash, or finance said homes in today's market. Many owners would not have expensive homes had they not been able to step up their equities from sale to sale (or have one home's value increase over the years).

Currently, many U.S. markets are burdened by a glut of expensive homes that aren't affordable to the younger generations who haven't had the chance to move up through a series of homes that increased their owner's net worth. Many properties in the U.S. inventory of expensive homes are going to go on the market and there aren't enough buyers who have the equity to pay these prices. Therefore, prices in other markets will drop and those sellers will have less money to spend here. In other markets, like California, the opposite is happening and relative fortunes are being made by just holding real estate.

What this is leading to is more of the stratification of this country as some benefit and others don't. Many in California are literally putting all they have and all they can borrow so they can at least get started with a home. Some buyers feel they and their children are doomed if they can't get even a basic home so they have the hoped for appreciation that will in many cases vastly outstrip what they can earn (given the increase of prices and of course all prices for all things fluctuate - as any NASDQ veteran can attest.)

Right now in little old Santa Fe, the balance is in favor of rational pricing at the upper end and increasing prices below $750,000 to $1,000,000 (as long as the location is desirable). We predict part of the market may have two to three years of rethinking at the upper end, but also note in the super upper end, over $2,000,000, the last part of '04 and the start of '05 have been the best we have ever seen. Those with very deep pockets find little inventory they like and they compete for the best homes. We just have a severely limited number of "best" homes. I think we are in a consolidation phase for the upper end market, with really special properties in demand as long as the price seems rational (which is not related to the actual number, but to the perceived value to that number. We will see what happens after that.

The stock market drop has cut out an economic group who used to be moving up to expensive homes. 9/11 has, on the other hand, now stared showing up in our real estate lives as many of those moving here are doing so after three or more years of looking for alternative places to live. They have needed the time to get children situated in schools, and have prepared to leave well established locations and life-styles to relocate to places like Santa Fe. The current influx of buyers at the high end have complicated lives and it took them a while to digest 9/11 and its aftermath and to then start moving.