Households earning over $500,000 per year represent a small but influential segment in New Mexicos housing market.
This means there are only a few thousand such households statewide, out of about 856,000 total households.
Home values were climbing steadily after a relatively flat decade.
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The median price for a single-family home in Santa Fe hit a record $460,000 in 2018.
Nationally, vacation-home and luxury purchases soared.
Vacation home sales jumped 16% in 2020, far outpacing the 5% growth in total home sales.
This trend was evident in New Mexico as well, especially in resort-like areas.
Wealthy out-of-state buyers and remote workers flocked to places offering natural beauty and a less dense environment.
Santa Fe in particular saw a Zoom boom of remote professionals arriving to enjoy its scenery and culture.
These newcomers often carried large budgets from higher-cost cities, which drove local prices sharply upward.
New Mexicos experience mirrored this national slump to a degree.
By mid-2022, the bidding wars had subsided.
Even some all-cash luxury buyers pulled back, waiting for prices to stabilize.
However, demand did not disappearit merely normalized from the extreme highs.
Despite the slowdown in sales volume, prices held at elevated levels through 2023.
Property types in Santa Fe skew toward large custom houses reflecting the regions unique adobe-inspired architecture.
This illustrates how affluent retirees and part-time residents dominate some Santa Fe neighborhoods.
Taos, famous for its ski resort and art colony vibe, saw increasing luxury activity.
From 2018 to 2023, Albuquerque experienced a notable increase in its luxury segment.
High-income buyers in Albuquerque typically gravitate toward specific neighborhoods known for upscale properties.
During 20202021, Albuquerque saw some out-of-state luxury buyers as well, though not as many as Santa Fe.
This relative affordability for the affluent made Albuquerque an attractive relocation spot.
Many are newly constructed or relatively recent builds, since affluent buyers often want modern conveniences and energy-efficient design.
Large Land Holdings and Ranches
A number of wealthy buyers sought out properties with significant acreage.
In New Mexico, this often means ranch-style estates or horse properties.
Owning land has a strong appeal for those desiring privacy or a hobby ranch lifestyle.
Throughout 20182023, several multi-million-dollar ranch transactions were recorded in northern New Mexico, some spanning thousands of acres.
In Santa Fe, developments offered units with price tags well over $1M.
High-income buyers choosing condos were often older couples downsizing from a larger home or splitting time between multiple residences.
The convenience and walkability factors were key.
During 20202021, demand for second homes spiked nationally and in New Mexico as well.
Buyer Motivations and Patterns
Different high-income buyers had different goals in the housing market from 20182023. and purchased in New Mexico for periodic use.
Their intention was to have a personal retreat and also hedge against real estate markets elsewhere.
Key Driving Factors
What drives a household earning over $500,000 to buy property in New Mexico?
The state offers a unique blend of natural beauty, culture, and pace of life.
Santa Fes art galleries, world-class cuisine, and festivals are a huge attraction.
Likewise, outdoor recreation like hiking, skiing, and golfing under sunny skies are lifestyle perks.
Some of those individuals looked toward states with lower taxes or cheaper real estate.
New Mexico, with generally lower property values and tax bills, benefited slightly from this.
Additionally, New Mexico has a law capping annual property valuation increases at 3% for owner-occupied homes.
But the pandemic accelerated a trend of decoupling work from location.
By 2021, millions of Americans were working from home permanently.
This freed many high earners to choose a home based on preference rather than office proximity.
New Mexico became a prime beneficiary of this shift for those who prioritized natural beauty and space.
Santa Fe was even ranked #5 by one survey for remote-worker appeal.
Nationally, the luxury housing market saw extreme volatility during this period.
After steady growth, the pandemic triggered record gains followed by a correction.
New Mexicos luxury markets (especially Santa Fe) experienced the same boom and slightly softer bust.
New Mexicos influx was more modest in scale.
Comparing 20182023 with 20082017 (the prior decade) highlights how much changed.
In that earlier 10-year span, the narrative was recovery and rebuilding.
By contrast, 20182023 was a period of expansion and new peaks.
Another big change from the earlier decade is the low interest rate environment.
But 20182021 had an unprecedented stretch of sub-3% mortgage rates in 202021, dramatically boosting buying power.
By 2023 rates were higher than at any point in the prior decade, which pressed the brakes.