Lisa Barela has lived in her south-side home since July 2022, when she purchased the three-bedroom, three-bathroom property near César Chávez Elementary School.
She was able to put a $100,000 down payment on the $420,000 dwelling, thanks to a townhome she’d previously sold. While the plan was to use some of that money for repairs to her new home — mainly, to redo the stucco — it didn’t work out that way.
And once she moved in, Barela ran into other problems — like a couple of doors blowing off. They have since been fixed, thanks to what she said was some help from her mother paying for the repairs.
The stucco, a job that could cost as much as $30,000, will have to wait.
But there’s more to consider, including Barela’s home insurance, which has shot up hundreds of dollars since she purchased the home. “I almost choked and died,” she said of the increase.
The growing cost of homeownership isn’t unique to Barela, a longtime Santa Fe resident.
In the wake of COVID-19, with rising costs associated with the pandemic and inflation, homeowners are finding there’s more — in some cases, much more — to having your own place than just making the mortgage. Repairs have gotten more expensive. Home insurance has increased, leading to more complaints with the state Office of the Superintendent of Insurance.
Such issues are to say nothing of the well-documented difficulties of buying a home, which continues to squeeze the market and those trying to get in it.
“I see a lot of people that are renting — they’re lifetime renters,” said Barela. “Rents are over $2,000 a month. How is someone going to sock anything away? It’s a vicious cycle.”
A tough market for new homeowners
DezBaa’, a Santa Fe resident who works in the film industry, doesn’t have the type of job most would consider normal.
Some years, DezBaa’, who goes by one name, has made less than six figures. In others, when she has secured a job writing and acting, she has made more than $100,000.
It’s been a goal of DezBaa’, who also works as a massage therapist, to purchase a home for her and her daughter — a place she said can become a safe space for the two.
She’s paying about $2,000 a month in rent for a house and has been searching for a home that would make sense cost-wise. But even saving the money for a down payment — typically about 20% of the cost of the home — has been tough.
Add to that, she said, the fact she wouldn’t exactly qualify for certain types of help, like a first-time homebuyer’s loan or Native American assistance because that only works “under restrictions.”
“Because of my income [and] how things fluctuate so much, it makes it so that I can’t go on some of these programs,” DezBaa’ said. “And that’s why conventional loans would be better for me.”
Even with conventional loans, the cost of buying a home in Santa Fe can be a big decision — and big dollars.
Santa Fe Association of Realtors data shows that for the first quarter of this year, the median home price in the Santa Fe area — combining the county and city — stood at $631,250. On the south side of town, often where most homes are sold, the median sales price was just over $472,000.
That’s a far cry from home prices from just five years ago in 2019 when the area median was $412,000 in the first quarter of that year. Compared to the Albuquerque area, where Barela had thought of potentially buying a home, Santa Fe’s home prices in the first few months of the year are still, in many cases, hundreds of thousands of dollars more.
Kelly O’Donnell, a longtime New Mexico economist who now works with Homewise as its chief research and policy officer, said the high home prices “speaks entirely to the supply crunch that Santa Fe is experiencing.”
“There’s demand in excess of supply, and at that point when housing prices are going up and demand is about supply, typically builders start building, and there is some of that going on,” she said.
But she said opposition from some community members to new housing developments may also play into the supply crunch.
“While you have this population pressure for more housing, at the same time you have a lot of pushback from neighborhoods and communities who don’t want the new housing sited near them,” she said. “It’s a real conundrum.”
In addition to the lack of supply, those able to get into homes in some cases are facing elevated property taxes. Isaiah Romero, the Santa Fe County assessor, said homeowners in their first year of owning a property are taxed at its market value.
After that first year, he said, homeowners are subject to a 3% increase on the value of their homes “if the market is calling for it.”
“What it keeps the value from doing is increasing more than the 3%, in which years prior we had 15%-20% increases,” he said. “That was put in place so people aren’t taxed out of their homes.”
He added, “The person that ends up paying the most is the first-time homebuyer” because his office has the information to put them at market value. On the other hand, he said, commercial property values aren’t always current and correct because his office don’t receive sales information as it does for homes.
Insurance, repairs
Home insurance has gone up in many places across the country, including New Mexico.
Melissa Robertson, a bureau chief with the Office of the Superintendent of Insurance, says that jump in prices, in part, stems from insurance companies responding to natural disasters, such as fires. But she said it also has some to do with increases in construction costs, as well as the age and condition of a home.
Home insurance, she said, typically covers things like the dwelling itself and personal property — but also medical payments in the case someone is injured on the property.
Robertson said she hasn’t yet seen an insurance company leave the state altogether, as the office in January enacted a 30-day notice insurance companies need to provide before packing up.
But she said there has been an increase in premiums — and complaints — since 2020. In 2023, she said the office’s Consumer Assistance Bureau received 38 complaints related to increasing premiums. So far in 2024, there have been 39, she said.
While each home has a different premium — related to a variety of factors, Robertson noted — Bankrate estimates the annual cost for insurance is about $2,058 in New Mexico, about $95 less than the national average.
Barela said her premium was $1,400 when she first purchased her home in 2022 and has since increased to $2,100, though she didn’t file any claims.
Thumbtack, a tech company whose website acts as a directory for home services, reported that in the fourth quarter of last year, home care costs shot up to $6,663 from $6,155 in the previous year.
The company’s data takes into account HVAC maintenance, gutter cleaning, appliance repairs and more, and shows an increase in each quarter from the end of 2022.
O’Donnell said while home repairs are certainly something homeowners and homebuyers need to take into account, they increase roughly at the rate of inflation.
“Maintaining a home is an expense and it’s something you have to budget for, but housing prices have increased far faster than the rate of inflation,” she said. “So, you know, while some of these costs associated with owning a home have gone up, they haven’t gone up nearly as fast as the actual price of the house.”
For Barela, getting new stucco on her home will just have to wait. She noted the cost it takes to live — including what she says are increasing costs for gas, groceries, utilities and an automobile — are a hinderance to saving the needed money for basics like repairs.
“I surrender to the fact that the stucco is [expletive],” she said. “I just keep thinking, ‘Well as time goes on, you’ll make more money.’ We’ll just see what the future holds. But I’m not going to worry about it. I’m in here. The stucco is ugly, but oh, well.”
