Households earning over $500,000 per year represent a small but influential segment in New Mexico’s housing market. These high-income families roughly correspond to the top 1% of earners in the state, with the threshold to be in New Mexico’s top 1% of incomes around $419,000. This means there are only a few thousand such households statewide, out of about 856,000 total households. By comparison, nationally the top 1% of households earn about $630K or more, indicating that New Mexico’s high earners have a somewhat lower bar to clear than in wealthier states.
Despite their small numbers, these affluent buyers play an outsized role in certain real estate markets, concentrating in specific areas known for higher-end housing and desirable lifestyle amenities. Santa Fe stands out in particular – it has long been a magnet for wealth, including both residents and second-home owners. Los Alamos County also has many high-income residents thanks to the national laboratory, with a median household income around $143,000 in recent years, more than double the state median.
Albuquerque, as the largest city, contains a share of top earners (doctors, executives, entrepreneurs) who drive its luxury home segment. Other pockets include resort and scenic areas like Taos (an arts and skiing community) and parts of Southern New Mexico (where oil & gas booms have created new wealth).
The Luxury Market Evolution (2018-2023)
The period from 2018 through 2023 was transformative for luxury home purchases in New Mexico. It began with a strong economy in 2018–2019, followed by the upheavals of the COVID-19 pandemic (which paradoxically spurred a housing boom), and ended with a market cooldown in 2022–2023 as interest rates rose.
Pre-Pandemic Market (2018-2019)
In the late 2010s, New Mexico’s high-end market was rebounding from the earlier housing crash. Home values were climbing steadily after a relatively flat decade. Starting in 2014, median home prices in upscale markets like Santa Fe had begun rising again, and by 2018 they finally surpassed their pre-2008 highs. The median price for a single-family home in Santa Fe hit a record $460,000 in 2018.
Affluent buyers were taking advantage of a stable economy and still-low mortgage rates (around 4% in 2018) to purchase luxury homes. High earners generally were upsizing to newly built custom homes or buying into Santa Fe’s prestigious neighborhoods as their incomes grew, but the real surge was yet to come.
The Pandemic Boom (2020-2021)
The housing market turned white-hot during the pandemic, and New Mexico’s luxury segment was no exception. COVID-19 triggered a unique mix of factors that supercharged demand among wealthy buyers: historically low interest rates, newfound freedom to work remotely, and a desire for more space and quality of life.
Nationally, vacation-home and luxury purchases soared. Vacation home sales jumped 16% in 2020, far outpacing the 5% growth in total home sales. By early 2021, vacation and second homes made up a record 6.7% of all U.S. home sales (up from about 5% in 2019). 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. Many popular Sun Belt destinations saw housing prices spike by 20–30% in 2021 thanks in part to out-of-towners with bigger wallets.
Market Cooling (2022-2023)
After the frenzied sales of 2020–21, the luxury market entered a cooldown in 2022 and 2023. The Federal Reserve’s interest rate hikes led to a rapid rise in mortgage rates (above 6% by 2023), which particularly affects expensive purchases.
Nationwide, luxury home sales dropped dramatically – by late 2022 the number of high-end homes sold was down 38% year-over-year, the largest decline on record. New Mexico’s experience mirrored this national slump to a degree. By mid-2022, the bidding wars had subsided. In Santa Fe, the number of home sales fell (city sales dropped 16.5% in Q2 2023 vs a year prior) even though prices remained near record highs.
Affluent buyers became more cautious as economic uncertainty grew and as their stock portfolios (a source of down payments for many wealthy buyers) saw volatility. Even some all-cash luxury buyers pulled back, waiting for prices to stabilize. However, demand did not disappear—it merely normalized from the extreme highs. In late 2022 and 2023, high-income households still purchased homes in New Mexico, but they had more negotiating power and took more time to shop around.
Despite the slowdown in sales volume, prices held at elevated levels through 2023. In Santa Fe County, the median single-family home price surpassed $800,000 in 2023, up from about $766K a year before and roughly double the median from a decade prior. In Albuquerque, the median home price reached about $345,000 in 2023 – while much lower than Santa Fe’s, this was also a record for the metro.
Geographic Distribution of Luxury Purchases
Santa Fe: The Luxury Epicenter
When it comes to where these $500K+ families are buying, Santa Fe is the epicenter. The Santa Fe metro (including Santa Fe County and city) has by far the greatest concentration of luxury housing in the state. Even before the pandemic, Santa Fe’s real estate was tilted toward the high end: about 19% of Santa Fe County’s homes were valued in the $500K–$1M range as of 2019, compared to just 5% for New Mexico as a whole.
Property types in Santa Fe skew toward large custom houses reflecting the region’s unique adobe-inspired architecture. High-income buyers here often seek homes with Southwestern style – high ceilings with vigas (wooden beams), kiva fireplaces, courtyards, and panoramic mountain views. Many such properties are located on multi-acre lots outside the city center (in areas like Tesuque or the foothills), offering privacy and luxury.
Gated communities and golf course developments, such as the Las Campanas community northwest of Santa Fe, are also a draw. At Las Campanas, the majority of homes are owned as second homes (about 70% second-home owners to 30% primary residents). This illustrates how affluent retirees and part-time residents dominate some Santa Fe neighborhoods.
Within Santa Fe city, high-income buyers have been purchasing luxury condos and townhomes in and around the historic downtown Plaza area. These units appeal to wealthy couples (often empty-nesters) moving from a big house to a “lock-and-leave” condo, as well as to out-of-state buyers wanting a low-maintenance second abode.
Other Northern New Mexico Hotspots
Beyond Santa Fe, other northern New Mexico areas attracted high earners as well. Taos, famous for its ski resort and art colony vibe, saw increasing luxury activity. It’s not unusual for million-dollar homes in Taos Ski Valley or the Taos area to be bought by CEOs or celebrities as vacation retreats. The median price in Taos County has climbed into the high-$400Ks as of 2023, and luxury homes can reach multiple millions for large ranch compounds or ski-in/ski-out chalets.
Los Alamos, though a small town, has some of the state’s wealthiest full-time residents thanks to the laboratory. High-income scientists and engineers in Los Alamos often buy the best homes in town (where housing supply is limited). A number of Los Alamos high earners also consider purchasing homes in nearby Santa Fe, enjoying a commute in exchange for more luxury or acreage.
Albuquerque’s Luxury Segments
The Albuquerque metropolitan area is New Mexico’s largest urban market and has a significant share of the state’s high earners. While Albuquerque’s overall cost of living and home prices are lower than Santa Fe’s, households making $500K+ here have been active in buying the top-tier homes within the city and its suburbs.
From 2018 to 2023, Albuquerque experienced a notable increase in its luxury segment. The median sales price rose to ~$345,000 by 2023 (from roughly $250K in the mid-2010s) and the volume of homes sold above $500K and $1M reached new highs. Nearly 4,000 homes priced $379,000 and up were sold in 2023 in the Albuquerque area, reflecting robust activity at the high end.
High-income buyers in Albuquerque typically gravitate toward specific neighborhoods known for upscale properties. These include the Far Northeast Heights (areas like High Desert, Tanoan, and North Albuquerque Acres), where one can find large custom homes with mountain views. Another draw is the village of Corrales and the East Mountains outside Albuquerque – here, wealthy buyers can acquire ranch-style homes on acreage, often with horse facilities or farms, providing a rural lifestyle within commuting distance of the city.
During 2020–2021, Albuquerque saw some out-of-state luxury buyers as well, though not as many as Santa Fe. Remote workers from more expensive metro areas found that in Albuquerque, with a $500K+ budget, they could afford a truly spacious home or even a mini-estate, which would be far out of reach in places like California. This relative affordability for the affluent made Albuquerque an attractive relocation spot.
Property Types Favored by Wealthy Buyers
High-income households in New Mexico have distinct preferences in the types of properties they purchase. Between 2018 and 2023, a few key property types stood out as favorites:
Custom Single-Family Estates
By far the most common purchase for $500K+ earners was a spacious single-family house, often custom-built or extensively upgraded. These homes typically feature 4+ bedrooms, luxury finishes (gourmet kitchens, high-end appliances, custom cabinetry), and amenities like pools, home theaters, or elaborate outdoor living spaces.
Many are newly constructed or relatively recent builds, since affluent buyers often want modern conveniences and energy-efficient design. During 2018–2021, there was a mini-boom in construction of custom homes in areas like Santa Fe’s outskirts and Albuquerque’s northeast, as demand was high.
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. For instance, an oil company owner might buy a 100-acre ranch near the Santa Fe National Forest, with a luxury home plus barns and equestrian facilities.
Owning land has a strong appeal for those desiring privacy or a hobby ranch lifestyle. High-income transplants from crowded cities were especially drawn to the idea of having open space – something New Mexico offers in abundance. Throughout 2018–2023, several multi-million-dollar ranch transactions were recorded in northern New Mexico, some spanning thousands of acres.
Luxury Condos and Townhomes
While not as numerous as single-family purchases, high-end condos became an important niche. In Santa Fe, developments offered units with price tags well over $1M. These typically feature 2-3 bedrooms, top-notch interior design, secured parking, and sometimes concierge services – essentially providing a “lock and leave” luxury lifestyle.
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. In Albuquerque, upscale townhome communities (such as those in the Ridgecrest or Downtown areas) also saw purchases by local professionals who preferred a low-maintenance property.
Vacation Homes and Second Residences
A significant subset of properties bought by this income group were not primary residences at all, but vacation homes. These ranged from ski houses in Taos Ski Valley, to adobe casitas in Santa Fe, to lake houses (near Elephant Butte or Abiquiu) and even golf villas in places like Truth or Consequences’ Turtleback Mountain resort.
During 2020–2021, demand for second homes spiked nationally and in New Mexico as well. Even families who live in Albuquerque or Santa Fe full-time might have purchased a second property in a getaway spot. The data showed vacant housing for seasonal/recreational use was high in destinations like Santa Fe County, reflecting this trend.
Buyer Motivations and Patterns
Different high-income buyers had different goals in the housing market from 2018–2023. Broadly, their behavior could be categorized into three groups:
Upsizers and Move-Up Buyers
These are local New Mexico families or individuals whose income rose into the $500K+ range (or who were already there but hadn’t bought their “forever home” yet). Often in their 30s, 40s, or early 50s, they used the favorable market conditions to upgrade to larger homes.
Upsizers were very active when interest rates hit record lows in 2020–2021 – low borrowing costs meant they could afford significantly more house. They typically sought more square footage, more bedrooms (for growing families or home offices), and features like big yards or pools. Many upsizers were also newer residents who relocated for work (such as a tech professional moving to Los Alamos or a medical specialist joining a hospital in Albuquerque).
Downsizers and Lifestyle Simplifiers
Not all wealthy buyers wanted bigger homes; some wanted better, not bigger. Empty-nesters and retirees in the $500K+ bracket often looked to downsize from a large suburban house to a more manageable property, while still maintaining luxury and comfort.
This was seen in Santa Fe, where many retirees from other states sold large homes elsewhere and bought a high-end but smaller home (or condo) in Santa Fe to enjoy cultural amenities and mild climate. Downsizers prioritized quality over quantity: high-end finishes, great location, and single-story layouts (for aging in place) were more important than lots of extra space.
These buyers made up a good portion of the luxury condo market and also drove demand for upscale smaller-footprint homes (like 2-bedroom casitas in exclusive compounds). Their motivation was lifestyle: to simplify life, travel more (hence a lock-and-leave home), and immerse in New Mexico’s art, cuisine, and community without the burden of maintaining a large property.
Second-Home and Vacation Property Buyers
A sizable segment of the high-income cohort were not moving their primary residence at all – instead, they were buying additional homes for vacation or part-time use. These buyers typically maintained a primary home in a major city (Dallas, Los Angeles, Denver, etc.) and purchased in New Mexico for periodic use.
Their intention was to have a personal retreat and also hedge against real estate markets elsewhere. The motivations included enjoying Santa Fe’s summer opera season, skiing in Taos in winter, or simply having a quiet getaway. Some also planned ahead for retirement: they bought the second home in their 50s with the idea of making it their primary home after retiring in a decade or so.
Key Driving Factors
What drives a household earning over $500,000 to buy property in New Mexico? The motivations during 2018–2023 can be traced to a combination of lifestyle factors, economic considerations, and the new realities of remote work.
Quality of Life and Cultural Appeal
For many wealthy buyers, New Mexico’s quality of life was the single biggest draw. The state offers a unique blend of natural beauty, culture, and pace of life. High-income individuals often have demanding careers; owning a home in New Mexico (whether as a primary or secondary residence) promised a refreshing change of environment.
Santa Fe’s 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. People moved to places like Santa Fe “to gain proximity to nature and open spaces” while stretching their dollars in a more affordable area.
Compared to coastal urban centers, New Mexico offered these buyers a more relaxed lifestyle without giving up on luxury or sophistication. High earners, who had the means to choose practically any location, often chose New Mexico for its charm, climate, and cultural richness.
Financial and Tax Considerations
While not as prominent as lifestyle, taxes played a background role in some decisions. New Mexico is not a zero-tax state (it has income tax and property tax), but its taxes are relatively moderate. After 2018, federal tax law changes (specifically the cap on state and local tax deductions at $10,000) made high-tax states like California or New York less attractive to top earners.
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. For example, a $1 million home in Santa Fe might carry a much lower property tax than a $1M home in California.
Additionally, New Mexico has a law capping annual property valuation increases at 3% for owner-occupied homes. This law, originally meant to protect local longtime homeowners from gentrification, inadvertently gives second-home owners a tax break too if they keep the home for years.
The Remote Work Revolution
Perhaps the biggest new motivator in this period was the explosion of remote work. Prior to 2020, a high-income professional often had to live where their job was (major cities, tech hubs, etc.). 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.
Tech workers from Silicon Valley, finance professionals from New York, and others suddenly could buy a house in Santa Fe while keeping their high-paying job. Santa Fe was even ranked #5 by one survey for remote-worker appeal. The remote work factor not only brought in out-of-state money but also allowed New Mexico’s own high earners more flexibility.
National Context and Historical Comparison
The trends observed in New Mexico from 2018 to 2023 both mirrored and diverged from national patterns in interesting ways. On the whole, New Mexico’s experience with high-income homebuyers aligns with the broader U.S. housing story of the late 2010s and early 2020s: a period of increasing demand, a pandemic-fueled spike, and then a cooling off.
Nationally, the luxury housing market saw extreme volatility during this period. After steady growth, the pandemic triggered record gains followed by a correction. New Mexico’s luxury markets (especially Santa Fe) experienced the same boom and slightly softer bust. One difference is that price resilience in New Mexico was strong; some overheated markets elsewhere (like parts of California) saw actual price declines in 2022, whereas New Mexico’s prices mostly leveled off or kept rising slowly.
Regionally, comparing New Mexico to its neighbors: Arizona, Colorado, Texas, and Utah also saw huge interest from high earners during 2020–2023. Phoenix and Austin, for example, became famed for an influx of wealthy remote workers, causing home prices to surge dramatically. New Mexico’s influx was more modest in scale. However, the pattern of Sun Belt migration was similar – people with big budgets moving from expensive coastal metros to cheaper, sunnier locales.
Comparing 2018–2023 with 2008–2017 (the prior decade) highlights how much changed. The 2008 housing crash hit New Mexico as it did everywhere; luxury homebuilding halted for a while, prices fell or stagnated, and high-end buyers were scarce in the early 2010s. In that earlier 10-year span, the narrative was recovery and rebuilding. By contrast, 2018–2023 was a period of expansion and new peaks.
Another big change from the earlier decade is the low interest rate environment. 2008–2017 saw rates range mostly from ~3.5% to 5%, plus tighter lending standards right after the crash. But 2018–2021 had an unprecedented stretch of sub-3% mortgage rates in 2020–21, dramatically boosting buying power. A high-income household could finance a $1M home at under 3% interest, making the monthly cost very manageable. By 2023 rates were higher than at any point in the prior decade, which pressed the brakes.
Conclusion
From 2018 through 2023, New Mexico experienced a notable rise in homebuying activity among households earning $500,000 or more. These high-income buyers have been purchasing primarily owner-occupied luxury homes, although many also acquired second homes and investment properties along the way.
They favored large custom houses on acreage, upscale condos in cultural centers, and even expansive ranch properties, depending on their lifestyle goals. Some were upsizing to take advantage of greater wealth and low interest rates, while others were downsizing or relocating to enjoy New Mexico’s unique blend of natural beauty and culture.
Importantly, these trends in New Mexico did not happen in isolation – they were part of broader national and regional movements in the luxury housing market. New Mexico saw parallels to the Sun Belt migration wave of the pandemic era and rode the same wave of surging luxury demand followed by a correction. However, the state’s particular allure and relative affordability gave it a distinct edge that helped sustain high-end demand even when the market cooled elsewhere.
As of the end of 2023, high-income households remain deeply invested in New Mexico’s real estate – literally and figuratively. Santa Fe’s median prices are at all-time highs, Albuquerque’s upscale neighborhoods are thriving, and interest in second homes persists. Even with economic headwinds, the fundamentals that attract $500K+ earners to New Mexico (scenery, culture, community, and value) are still in place.
References
- Income by State: Statistics and Percentile Calculator
- How much money you need to earn to be in the top 1% in every US state
- New Mexico – Profile data – Census Reporter
- Los Alamos County, New Mexico – U.S. Census Bureau QuickFacts
- Santa Fe County Housing 2020 Report
- Vacation Home Sales Surges During Pandemic
- As a ‘Zoom boom’ brings the wealthy to Santa Fe, locals are getting priced out
- Out-of-towners are causing home prices to soar in relocation hotspots
- Luxury-Home Sales Sink 38%, the Biggest Decline on Record
- Santa Fe County Median Home Price Tops $800,000
- Market Statistics | Greater Albuquerque Association of REALTORS®
- Greater Albuquerque Area Housing Statistics Report
- Taos Real Estate Market Prices, Trends, and Forecast for 2024
