This month's market spotlight: Finding a deal in Santa Fe
A few years ago, Santa Fe was a tough market for first-time buyers to break into. But the housing-market crash and recent low interest rates have changed that. Real-estate agent Lauren Sato says she has helped many first-timers purchase homes in the city, which is best-known for its artists, tourists and adobe homes.

She says two-bedroom condos and even a few single-family homes are now on the market for less than $200,000. "There's no question that our prices have adjusted, just like all over the country," she says. "We are probably still adjusting a little bit more." (Bing: What's the best month for home sellers?)

Overall, prices have probably dropped 20% to 30% from where they were at the peak, she says. That translates into deals for buyers at all price points.

She says a popular area for first-time buyers is the Airport Road area, which has quite a few foreclosures and short sales. "I get contacted a lot by first-time homebuyers because those (distressed properties) are the best deals," she says, adding that nearly 30% of all sales in the past year have been distressed properties.

On the other end of the price point, a popular area for high-end homes is Las Campanas, which has seen a 40% reduction in the average sale price since 2006, she says. The average price in 2011 was $973,000, compared with $1.6 million in 2006.

If a buyer wants a single-family home with a lot of land at a price between $300,000 and $500,000, Sato recommends Eldorado, about 20 minutes outside of downtown Santa Fe. Every home is on at least an acre of land.

But what about homes in the heart of historic Santa Fe, near the Santa Fe Plaza. Can a buyer find a deal there? A deal, yes, but not a steal.

"People will call and say, 'I want to be in walking distance to the plaza, but I don't want to go above $200,000,'" Sato says. "That's just not going to happen. If you're near the plaza, you're going to have to pay a little more. But compared to six years ago, you will still get a great deal."

She says that you could find something small that needs some work in the $300,000s but that those finds are rare.

One of Santa Fe's unusual housing characteristics is that most neighborhoods are mixed when it comes to home sizes and values. "In any given area, you could find a jewel," Sato says. "A little starter home just down from a much higher-priced one. It's very varied."

That's one reason Sato says it's essential to find an agent or broker who really knows the market. That's particularly true if you're looking for a home that costs $500,000 or more.

"There are a lot of what we call 'pocket listings,' which means the sellers for whatever reason don't want the home in the (multiple-listing service), but they would be willing to sell," she says. "You need a broker who is well-connected, knows what's going on and can look for all opportunities."

Like many other markets, Santa Fe has its share of fixer-uppers, which Sato says are popular with investors. It also has quite a few condos, but they're not what you would think of when you hear the word condo. Many are old adobe homes that were split in two because a lot couldn't be divided. Some are even multiple little homes on a single property with one driveway.

"There's been a moratorium on any new 'condo-izing,' but for a while, it was pretty rampant," Sato says.

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