Brian Weiss first got to know the Santa Fe area as a student at the University of New Mexico some 50 years ago.
"I fell in love with all that is New Mexico and the Southwest—the mix of cultures, the archeological sites, the food, the physical beauty of the place," said Mr. Weiss, 71, a medical and science writer.
Over the years, he and his wife, a psychotherapist, took frequent vacations to Santa Fe from their home in Pasadena, California. Last year they decided it was finally time to buy a second home in Santa Fe, and in January they closed on a deal to buy a 4,400-square-foot house in the gated Santa Fe community of La Campanas for $1.225 million.
The Weisses exemplify a growing trend that has pushed Santa Fe to the very top of the global second-home market, according to a recent report from Christie’s International Real Estate, which delves into the global luxury real estate market in 2017.
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Santa Fe is now the "hottest second-home market" in the world, according to "Luxury Defined," Christie’s annual analysis of global luxury residential housing dynamics, which was released earlier this month. "New Mexico’s capital city of Santa Fe posted luxury sales volume levels not seen since 2005-2006," according to the report.
After Santa Fe, Christie’s list of top second-home markets included Muskoka, Ontario; Sarasota, Florida; Sun Valley, Idaho; and the Bahamas.
"We have a very large second home market—that is a big focus here," said Darlene Streit, an agent with Sotheby’s International Realty in Santa Fe.
"Lately we have been seeing a lot of people coming from Colorado as well as our usual markets of Texas and California," she said. "We’re also seeing a lot more New Yorkers."
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Perhaps it’s about "getting away from the hustle to an easier way of life," she said. "Many are also coming because it is more affordable here for retirement and the proceeds from their homes can help subsidize retirement."
Ms. Streit defined the Santa Fe luxury market as "over $1 million, some would say over $1.5 million."
Finding "Affordable Luxury"
There are no hard numbers on how much of the luxury market is second-home buyers. "I would say it’s more than half," Ms. Streit said.
Worldwide, sales volumes of second-home and resort lifestyle destinations grew by 19%, up significantly from a 7% annual decline in the prior year, according to the Christie’s report.
The surge in second-home sales globally is part of a general uptick in the luxury real estate market. Worldwide sales of million-dollar-plus homes in primary housing markets in 2017 were up 10%, according to the Christie’s report. That’s the strongest annual gains in luxury housing recorded in the previous three "Luxury Defined" reports.
The overall Santa Fe luxury market is doing quite well, said Stephanie Duran, an agent with Barker Realty/Christie’s International Real Estate based in Santa Fe.
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"Two years ago, in the $2 million-plus price range, we had no more than five homes sold within the city limits," she said. "Last year, we had 20."
According to Barker Realty/Christie’s International Real Estate’s first quarter report for Santa Fe County, there were 158 luxury sales in 2017, compared to 133 in 2016. In the first quarter of 2018, there were 40 luxury sales with a median sales price of $1.25 million, compared to 27 during the same period last year at a median price of $1.35 million.
"Our multi-million-dollar market has just taken off," Ms. Duran said. "It is happening because we are a resort area, we are a wonderful vacation spot and we are still affordable luxury."
"People are waking up to that and they’re coming from all over the country," she said.
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More Than Just Retirees
While Santa Fe is known as a popular spot for retirees, both Ms. Duran and Ms. Streit said they were seeing younger buyers coming into the market, too.
"We’re getting a younger group of people coming here, which I love," Ms. Duran said. "It brings a whole new energy to the market."
Some people are buying second homes with plans to retire in a few years. "I’m seeing people in their mid-50s, or early 50s, who are thinking of coming here and retiring in a few years rather than waiting until their mid-60s," Ms. Streit said.
"Some of them are making so much money when they sell their homes, especially in California, that they can retire early," she said.
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The Christie’s report pointed to "inventory shortages throughout the city," and data from realtor.com confirms that. The overall inventory in the Santa Fe metropolitan area is shrinking as demand outpaces supply, with total active listings down 25% year over year (January to April 2018 compared to the same period in 2017). Listing views on realtor.com are up 38% year over year, according to data provided to Mansion Global.
As a result, a lot of people are building new construction, Ms. Streit said.
After the 2008 housing crash, a lot of people stopped building, so there is a "short supply of homes less than 10 years old," she said. "When good houses come on, they are selling pretty quickly."
Quality of Life
The Christie’s report cited Santa Fe’s "excellent quality of life" as a primary factor in the city’s second-home market surge.
"Santa Fe is a small town with big town sophistication," Ms. Streit said, mentioning its high-quality opera and symphony performances. "We have one of the largest art markets in the country." Canyon Road, for example, is famous for its more than 100 art galleries and artists studios in one mile-long stretch.
She also pointed to the "almost nonexistent traffic—in a few minutes you can go anywhere."
Canyon Road, Santa Fe
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"The ease of life here with this level of sophistication doesn’t exist in other towns," Ms. Streit said. "That’s why I came here, after living all over the world, 28 years ago."
"Santa Fe still has a great heart," she added. "They have protected the historic center so that it still has a lot of character. They have been very cautious about development here."
Another plus, Ms. Duran said, is that the city "has retained its historic Hispanic culture—many of my clients say that they feel like they’re in Europe."
Typically, people with second homes "come here in the summer, from Memorial Day to Labor Day," Ms. Streit said. But there’s also great skiing, she added. "A lot of Texans come here to get away from the heat."
As for the rest of 2018 and into next year, "it’s a very strong, healthy market now and I expect that to continue," Ms. Streit said.
As for the Weisses, they couldn’t be happier in their new Santa Fe home.
"The interesting thing about Santa Fe is that it is really just a community of about 80,000 people, but it plays much larger," Mr. Weiss said. "It has a level of intellectual activity and an artistic and creative community that you would expect to find in a much larger place. My only regret is that we didn’t move there 20 years ago."