Building Permits Up

Statistics reflecting an increase in Santa Fes home construction market may be something to build on. Just dont expect it to be a million dollar home.

Kim Shanahan, executive director of the Santa Fe Area Home Builders Association, said theres been an increase in the number of building permits issued this year over last.

But most of them are for homes in the under $300,000 range, he said. People are finding that its still cheaper to buy an existing home, and thats whats been holding us back.

There are other factors holding back home building in the city, Shanahan said.

The biggest impediment is the fact that local banks are prohibited from making speculative loans, he said. Federal regulations are still telling local banks that they cant lend for infrastructure, so that affects subdivisions. And many of the local banks are still holding unsold homes and lots, and that ratio keeps them from getting back into the lending game.

In addition, Shanahan said foreclosures are still running at a rate of 100 per month.

That speaks to more homes coming on the market selling for half of what they did in 2006 and 2007, he said. Its going to be awhile before people start thinking about having a home built.

Santa Fe is The City Different, so its no surprise that the home construction market is different here.

In Santa Fe we have almost exclusively custom home builders, so its completely dependent on people coming to them, Shanahan said, adding that there hasnt been a new home placed on the market priced at more than $500,000 in more than five years.

Five years ago was when the national home construction market started to nosedive, largely due to the economic collapse.

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Building Permits Up