Investing in Santa Fe and or Albuquerque ?
Member since 2020 · 2 posts · 3 votes
Investing in Santa Fe and or Albuquerque ?
Most Popular Reply
Real Estate Broker · Albuquerque, NM · Member since 2019 · 59 posts · 93 votes
4yLike many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
11 Replies
- Investor · Santa Fe, NM · Member since 2016 · 221 posts · 152 votes4y
Hi Garrett,
I live in Santa Fe, and invest in multifamily Albuquerque.
It depends on what you are looking to invest in? Single-family? Short Term Rentals? Multifamily?
SF is a really expensive real estate market (relativity speaking), Abq is more affordable.
I'm happy to give you additional information on how I see these markets.
Jens - 4yLeslie VillarealBusiness MemberReal Estate Broker · Albuquerque, NM · Member since 2021 · 67 posts · 32 votes
Hi Garrett-
I would agree with Jens, Albuquerque does tend to be more affordable, so it depends on what you are looking to do. I am an agent here in Albuquerque and have worked with many out of state investors. I would be happy to connect with you and give you my take on our market and what we have to offer.
The VillaRealty Group- Leslie Villareal545 Reviews - Real Estate Broker · Albuquerque, NM · Member since 2019 · 59 posts · 93 votes4y
Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
- Member since 2020 · 2 posts · 3 votes4y
Originally posted by @Robert Carmody:
Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
This is gold, thank you for this.
- Member since 2020 · 1 post · 1 vote4y
Originally posted by @Robert Carmody:
Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
I live in Santa Fe and I completely agree with Robert
- Member since 2022 · 3 posts · 0 votes3y
Quote from @Robert Carmody:
Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
Hi Robert, I am in a similar situation as Garrett was when he originally posted this. I was wondering how you might update this post for today's market? Have residential prices gone up? Have rental prices? Have these markets changed in any significant ways since then?My goal is to acquire a single family rental home for my first investment.
- Member since 2022 · 3 posts · 0 votes3y
Quote from @Garrett Humphreys:
Originally posted by @Robert Carmody:
Like many markets throughout the United States, both Albuquerque and Santa Fe have experienced a noticeable jump in real estate prices during the last couple of years, more than normal. Both markets have been operating on record low inventory levels for about 2 years. This is caused by many years of low interest rates, high construction costs & supply shortages, along with high demand from millennials buying first and move-up homes at the same time baby boomers want to downsize.
The dynamics and characteristics of the real estate markets in ABQ and Santa Fe are very different. Santa Fe is less than 1 hour north of ABQ. It has a population of about 90,000, and it is a much higher cost housing market than Albuquerque (incl Rio Rancho). Many of the area's homeowners own their property as a 2nd home, vacation home, and don't live & work in Santa Fe full time. There are a large number of properties rented as Airbnb's and vacation rentals. Santa Fe, for many many years, has been more of a vacation and retirement destination. It's well known for its history, art galleries, Santa Fe Opera, upscale hotels & resorts, top notch restaurants, skiing and outdoor recreation. As of October 2021, the average home sold in the Santa Fe area was $715,000, and median price is just shy of $600,000. Prices like that create a barrier to entry when it comes to entering the housing market as a homeowner, whether trying to investor or buy a primary residence.
Prices are double in Santa Fe from what they are in Albuquerque, where the median hovers around $300,000 and average price is about $360,000. Population is about 10 X that of Santa Fe. It is much more of a working-class market than Santa Fe, where historically the market has offered a wide range of housing, from entry level to luxury homes, most being in suburban style neighborhoods and large developments. Albuquerque is home to Sandia National Labs, Kirtland Air Force Base, the University of NM, Presbyterian Health Care, Abq Public Schools, Amazon, Netflix, Intel, HP, T-Mobile, several large call centers, among many others. Those employers tend to help create a steady supply of good quality renters in the Albuquerque market, seeking single family homes, townhouses and condos to lease under typical 12-month leases. Albuquerque's rental and resale market, historically speaking, is very stable and the market moves at a healthy pace. When you compare rental prices to actual home prices, or your acquisition cost buying the property to the rental income produced, you'll usually find the ROI higher in Albuquerque. There are exceptions, and some investors have succeeded with Airbnb style rentals in Santa Fe that can be very lucrative when rented consistently. Rental prices in ABQ keep up with purchase prices much better than they do in Santa Fe.
Overall, residential prices are up about 15-17% from 1 year ago, in both markets. Rental prices are also up 20%+ compared to 2020. A typical 3 bedroom rental in ABQ averages $1,700/mo, compared to an average of $2,400/mo in Santa Fe.
If your goal is to acquire additional investment properties in the future, you are better off starting out with a traditional rental, whether single family or multi-unit, compared to a vacation rental or Airbnb, where the income potential might be higher but won't be used to help you qualify to purchase other properties in the future. Good luck, let me know if you need any help.
This is gold, thank you for this.
Hey Garrett, did you end up purchasing in either of these markets?
- Investor · NM · Member since 2020 · 10 posts · 12 votes3y
@Spencer Moore I am an agent in Santa Fe and am currently doing a flip in Santa Fe. I'd be happy to talk to you about my experience. Residential prices have continued to go up here, but have tapered just like the rest of the country due to interest rates. That being said, Santa Fe and all of northern New Mexico, for that matter, is much lower on inventory than the demand and this has been an issue now for years. Any house in Santa Fe priced under 450k will go under contract in a few days, the 600+ price range finally has some room for negotiating with the market changes. There is a HUGE lack of builders and tradespeople in the area and that alone, I believe, will keep driving prices indefinitely. Northern New Mexico is the next front range of Colorado (unfortunately for locals, but fortunately for investors) this is a great appreciation market, but you will not find a Cash flowing rental unless you are willing to put in the work for an off market BRRRR. Santa Fe short term rental licenses are hard to obtain, that being said there are areas around Santa Fe that you don't need an STR license that do shockingly well.
- Member since 2022 · 3 posts · 0 votes3y
@Emilie Adamovic Thanks for the response! I hope your flip goes well :-) I was originally thinking Santa Fe as I have a friend who lives there who is a pretty handy dude and I think could be a great partner in a BRRRR style deal. However I am a bit dissuaded by the level of market inflation there in the past few years. I'd like to start building a portfolio in more of a nascent market that has more room to grow in coming years.
Perhaps Santa Fe still has some room to grow, as you suggest? How can one be confident about how much room a market has to grow? What are some factors that indicate a market will experience growth in coming years? And how does one go about researching different markets and choosing a market to start investing in?
These are some questions that, despite having read a few books about, I still feel confused about, and find myself unsure how to proceed. Anyway, if anyone has any comments or thoughts I'm all ears! Thanks y'all!
- Member since 2023 · 1 post · 0 votes3y
Everyone who comes to see this magnificent place will never forget it. The designs of the rooms are really soothing. I'm looking forward to spending time there because it reminds me of a vacation spot at https://santafe-vacationrentals.com/airbnb-santa-fe/.
- Providence, RI · Member since 2019 · 11 posts · 2 votes2y
@Spencer Moore did you end up investing in New Mexico? If so, any updates?
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