How Much Does it Cost to Build in Santa Fe, NM?

So, how much does it cost to build in Santa Fe?

Well, that is the million-dollar question.  Actually, it’s more like a 2-3 million dollar question for most people looking to build a custom home in Santa Fe.  In fact, I get several emails a week asking, “How much does it cost to build in Santa Fe?” And it’s always a nuanced answer, because there are so many variables associated with determining that price point. 

The Most Common Factors

These include among other things, the existing soils and topography of your chosen building lot, the proximity the building site has to existing utilities, the length of the drive from existing roads to the building site and of course, the design characteristics of your one-of-a-kind hand-crafted custom dream home.  These variables have been constant in their influence over the cost to build forever.  And once we are able to assess your building site, we can often make some predictions about how much these factors may influence the final construction cost.

The Time Factor

But there is another factor which historically wasn’t as influential as it is now, and that is the factor of time.  Einstein realized that time was relative, and Newton was missing the point when he said time was constant.  And although Newtonian physics seems the order of the day when it comes to something as material as building a custom home from scratch, Einsteinian relativity may now be worth considering.  Time and construction costs are in fact relative, and time plays a much greater role in the final construction costs than ever before.  What do I mean, you may ask?

The Data

We recently did a thorough analysis of our custom home construction costs dating back over the last 15 years.  The graph above shows our actual cost data for completed custom home construction projects depicted by the solid orange line.  The dashed gray line represents an average trend and incorporates a projection beyond 2023 based on our expectations.  What the data shows is that, yes, construction costs have increased in the last decade.  I think we all knew that.  But more interesting was the rate of increase over time. 

Throughout the 2010’s construction costs were somewhat stable with a relatively predictable 5%-10% per year increase. And this ramped up from 2015-2019.  Average costs per square foot slowly increased from roughly $200 per square foot in 2010 to just under $500 per square foot over the course of that decade.  This relatively stable rate of cost increase made it pretty easy to predict the general cost per square foot of a custom home from year to year. Then COVID hit!

An Accelerating Trend

What we saw was a massive disruption to the supply chain and labor market at the same time.  Yes, we all have heard about inflation. It’s been in the headlines for years, but what most people don’t consider is that inflation affects different parts of the economy in different ways, and at different rates. And it also affects different local markets in non-homogeneous ways.

For custom home construction in Santa Fe, the previously predictable annual cost increase quickly changed.  And we began seeing increases across all sectors of the construction market, concrete, steel, lumber, and labor.  This amounted to annual cost increases of greater than 20% between 2020-2023. For this reason, we have seen the cost of custom home construction rapidly move from +/- $500 per square foot in 2020 to well over $700 per square foot in just a few years.  And in some instances, we are seeing prices above $900/sf for highly complicated or specialized home designs on challenging lots.

Our Design-Build Approach

At Palo Santo Designs, we recognize our customers rely on us to be as accurate as possible in our pre-design budget forecasting.  It is one of the main benefits of our Design-Build approach.  The integration of real-time construction cost knowledge within our integrated architecture team allows Palo Santo Designs to be very efficient in the value engineering of custom homes. 

Until recently, our predictive models were somewhat static, assuming the cost of construction at the time design commences would be +/- within 5%-10% of what they would be a year later when groundbreaking actually happens.  Now our Updated Pre-Design Budget Exercise has built into it a time factor.  That is, what we can assume for construction costs at the time design begins is factored up according to when you anticipate breaking ground.  That way, we can take into account the accelerated cost trend currently being seen in the market. This allows us to better assist our clients in being financially prepared for the likely construction costs to come.  Also, our integrated Design-Build approach can also reduce the amount of time to commencement of construction. This further optimizes your dollars by staying ahead of growing costs as much as possible.

Optimizing Value

It is also important to understand that contractors have very limited control over the costs of construction.  That may sound counter-intuitive, but general contractors are the orchestral conductors of the varied resources needed to build custom homes.  Labor, lumber, windows, or concrete are all externally priced by market forces outside of the contractor’s influence.   Our team of architects and builders are focused on providing our clients with the most realistic cost modelling possible. We do this by working closely with our trade partners and vendors to optimize value.  And whether you are looking to build at the $1.5 million or the $15 million dollar price point, we will always take great effort to deliver as much bang for your buck as possible.

Find Out More

Email me [email protected] to receive a free consultation about your project and a copy of our Updated Pre-Design Budget Exercise. We can guide you through the steps to realize your dream. Your one-of-a-kind hand crafted custom home in Santa Fe with Palo Santo Designs.  

The New Mexico Monsoon

The majesty of the New Mexico Monsoon. Slow, deliberate, obstinate, discerning and generous. From the great deep of the equatorial Pacific it rolls into and across the vast deserts of Sonora and Chihuahua and tips its brimming cup onto the sun scorched mountains of the upper Rio Grande valley. The Sangre de Cristo. The life blood of New Mexico. Aqua es Vida. The moisture laden air mass moves with impunity from the south being pressed upward upon the Colorado Plateau. Wrung out upon the land, the arroyos fill, reservoirs and water tables are replenished. The acequia comes back to life after a long dreadful sleep, and native Blue Gramma grass will soon become green again, pushing up its short and proud stalks to form the ubiquitous sickle shaped seed top, both recognizable and easily overlooked. This year, looking down upon the seemingly barren soils of the Piñon Juniper forest that is Santa Fe’s home, it seems impossible that these low clumps of dry grass can actually be alive. Yet they are, and the monsoon rains now soaking the ground will prove that fact again.

The mega drought, as they call it, has been a few decades in the making. Lower than average rain and snow cumulating year upon year has left our soils desiccated, and the pinon tree susceptible to the bark beetle. It’s natural defense against the beetle is the production of its sticky sap, which engulfs and kills insect invaders as they try to burrow into the bark. In drought conditions the pinon is unable to produce sufficient sap to defend itself and the beetle population thrives. 2022 has seen another decline in the pinon population in and around Santa Fe.

People often ask, how will we continue to provide water to this growing community? A valid question. And it is heartening to know that Santa Fe is a world leader in water conservation, with one of the lowest per capita water use profiles in the U.S. We remain ahead of the curve in that regard.

I recently re-listened to Woody Guthrie’s “Dust Bowl Blues”, a tribute to a previous mega drought from nearly a century ago. It is a first hand account of the severity and disregard nature can show to our needs, wants, and prayers. Caused in large part by the combined events of a massive scale up of till agriculture across the western plains and a 10 year drought, the dust bowl is recognized as one of the worst environmental disasters of our age. During this unusually dry and windy spring, I found myself wondering, will I be a dust bowl refuge? Thankfully, decades of soil conservation efforts, and improved water resource management has allowed the lands of the arid southwest to handle drought far better than we were able 100 years ago. And now with a record setting start to the 2022 New Mexico Monsoon, my nerves are again calmed, and I settle into the knowing that the rains do come.

Perhaps the greatest challenge facing the west in times of drought are wild fires. We have just seen New Mexico’s largest recorded wild fire. 2 fires, in fact, who merged to combust an area encompassing about 350,000 acres along the east side, the wet side as it were, of our Sangre de Cristo range. From the small town of Las Vegas, NM through Mora to the north up to Guadalupita nearly to Angel Fire. I fitting name. This blaze now known as the Calf Canyon/Hermits Peak fire sparked to life in early April. A season once still considered winter in the northern slopes of the Sangre de Cristo. A prescribed burn set with the good intention of reducing fire risks by the US Forest Service which quickly grew out of control. Having misread the signs, the lack of humidity, lack of stored moisture in the soils and canopy, the winds, it quickly became an inferno. What was once predictable in earlier years, now seems unpredictable. Simultaneously, in a nearby wilderness, an ember emerged from last year’s prescribed burn. A smoldering subterranean ember, having been resuscitated by the spring winds emerged upon the land to ignite those conifer forests in Calf Canyon and join its twin at Hermit’s Peak to form the largest burn recorded in our state.
Once underway, this blaze had only one remedy, despite the valiant efforts of firefighters on the ground and air tankers from above to contain its wrath. The mighty monsoon, which came on June 15 this year, the official beginning our our fifth and most beloved season. It came on time, not a day too soon, and has proceeded in its first couple weeks to drench our beloved landscape with life giving water.

Because of this generous start to the monsoon, the wild fires are now apparently under control and forest access restrictions are being lifted. The gardens and orchards will thrive this summer. The grasses will come back from their hibernation, and the magnificent display of wildflowers will bloom. The Piñon Juniper forest will be given its ration of life sustaining moisture in this years New Mexico Monsoon and perhaps the bark beetle will be thwarted for now . I sit and listen to the patter of a consistent rain on my roof, watching the runoff flow freely into the catch basins that convey it to the cistern that stores this precious resource. A full tank, that we will use to irrigate our greenhouse, gardens and landscape, we also use the rainwater caught in the cistern to flush toilets in our house, conserving water and re-using it to build soil, grow plants, sequestering carbon and moisture in the soil where life can thrive.

Best sustainable homes in Santa Fe

The best sustainable homes are in Santa Fe, New Mexico!

Hear Mark Giorgetti discuss the best techniques, materials and methods for the design and construction of sustainable homes in Santa Fe New Mexico, and the world.   On KTRC Talk 1260 and radio podcast “Build Together” with Miles Conway of the Santa Fe Area Home Builders’ Association

Click Here to Listen

Miles Conway introduces Mark Giorgetti, Principal and Founder of Palo Santo Designs.  Palo Santo Designs is a construction and architecture firm based in Santa Fe New Mexico for the last 20 years, specializing in the design-build approach to contemporary high end custom homes that incorporate numerous sustainability features.  Mark discusses how he got his start by working in the solar industry and studying environmental science.  And his discoveries that buildings offer a uniquely attainable way to achieve important environmental improvements by reducing energy consumption, water consumption, waste.   When designed and built right, sustainable homes provide humans with protection from increasing environmental hazards related to climate, while also offering us all an opportunity for peace, joy and recuperation from the stresses of modern life.  Architecture plays such a critical role in the well being of the human race and the construction methods we use also play a critical role in the greater environmental health of our regions and our globe.

Mark also discusses his experiences traveling in other parts of the world and his observations regarding how people dwell in less advantaged places.  He goes on to describe how, when he worked for the United Nations on a global research project he was able to identify an important nexus between indigenous natural building methods like adobe and other social and environmental benefits.  Indigenous building materials and methods are often cost effective, can provide resilience from extreme weather events such as extreme heat, and can also serve to mitigate the causes of global climate change by reducing the embodied energy in the building materials we use and improving energy efficiency.

Palo Santo Designs has focused on how to bring these alternative building systems into the mainstream by producing architecturally beautiful modern homes with all the amenities expected by high end consumers that also utilize sustainable, low embodied energy materials that provide energy efficiency, water efficiency, comfort and afford us all some grace in an otherwise complicated world.

For more information contact us here! 

The Best Contemporary Home Builder in New Mexico

Award winning design-build firm Palo Santo Designs is proud to announce it has been named one of the Best Contemporary Home Builders in the US, taking the New Mexico slot!  We appreciate all the support in our efforts to create state of the art modern and sustainable homes in Santa Fe, New Mexico, and look forward to our next round of contemporary homes.  Our skilled team of licensed and experienced architects and builders excel at the design and construction of high end contemporary custom homes.   Palo Santo Homes are both stunningly beautiful and highly sustainable providing state of the art comforts for solar power, water efficiency, energy efficiency and a lifestyle in tune with the natural beauty so abundant in the mountains of northern New Mexico.

Our designs are defined by clean lines, light, space and an understated elegance which is central to contemporary home design today.

Our approach to design and construction of the best contemporary homes in New Mexico is rooted in a few simple ideals.  1.  We listen to our clients and guide them to the outcomes they want and deserve. Most of our projects have award winning results, and we never cut corners on the best practices, fit or finish. 2. We apply our decades of expertise in construction and architecture to validate costs in real time so that our customers know what to expect in terms of the financial implications of their choices, this keeps everyone happy and leads to successful outcomes.  3.  We communicate.  We always keep our customers up to speed on the ins and outs of the project, when the unexpected arises we address it head on with clarity, honesty and expert advisement.

Our passions reside in the creation of beautiful architectural spaces which are clean, open, inviting and restful.  We thrive on the collaboration in artistic expression with our customers in the creation of one of a kind custom homes and apply our knowledge and expertise to make the resulting home, durable, functional, efficient and elegant.

Thank you to Home Builder Digest for the recognition and support in naming us the Best Contemporary Home Builder in New Mexico!

Santa Fe Architect Spotlight – Jon Stern

Jon Stern is the Lead Architect at Palo Santo Designs in Santa Fe. We sat down with him to learn more about what inspired him to become an architect, why he enjoys architecture, what’s his favorite part of helping clients, and what makes Santa Fe architecture so unique.

What Inspired You To Become an Architect?

For Jon, architecture was just something he was always interested in. He said he was easily bored as a kid and the complexity of architecture captured his attention because of the combination of art and science.

It’s certainly never boring,

Jon says

It’s never boring because he’s constantly thinking of structures, designs, materials, process, and so much more to create a space that people will love. It allows him to be consumed in each project, refining his approach, and executing plans for another successful build in Santa Fe.

It also allows him to be calculated and exact while being able to enjoy the art and creativity of the space. It’s a dance between both worlds, science and art, and a dance he enjoys.

How Do you Approach Architecture and Design?

Jon says it’s being an information gatherer and problem solver together. He develops a solution based on the information he receives.

A client has dreams and aspirations for their home, but they don’t know how to bring it to life. They can see something in their minds and communicate it, but it is Jon’s job to bring it down from a dream into a real concept. From there he jumps into three dimensional spaces in his mind where he conceptualizes the entire flow of the custom home.

It’s not just about the rooms themselves but also about the relationship of the spaces. The house must be cohesive from room-to-room and have a natural flow that just feels right.

A client may not be able to describe the details of why it feels right but they certainly feel it and recognize it. And Jon gets to guide our clients to that destination. A destination of happiness and joy within their new home.

What is Unique About Santa Fe’s Architecture?

One of the first things that attracted me to Santa Fe is at a distance the buildings appear to be coming out of the ground, complementing the native soil and rock,

says Jon.

Jon noticed this because he’s originally from Pennsylvania and Santa Fe’s architecture was unlike any other style he’d seen. It blends so well with the landscape and seems to be one with nature.

And yet today there’s a great combination of the historic, traditional design with a contemporary adaptation, which Jon enjoys and leads with himself. He finds that the traditional elements of Santa Fe compliment the contemporary touches.

There’s a lovely interplay between the traditional and contemporary within a home and it adds a certain depth that people are wanting in Santa Fe today.

While at the same time Jon is glad the historic look has remained and the people of Santa Fe want to preserve it throughout structures.

What is Your Favorite Part of the Design-Build Process?

“It’s actually experiencing the space when it is built,” Jon says.

And when he experiences it with the client and they react with “oh wow” Jon knows the many hours of concepting, designing, and refining have paid off.

It’s not enough to hear them say “it’s good.” He wants them to be amazed and to feel everything remarkable imparted into the design. He wants the experience to evoke joy for the client.

Hours of listening and refinement bring Jon to a finished design that the client approves and then sees come to life through construction. And it’s those hours that pay off in the end.

“It’s part of building anything… it’s just hammer and nails,” Jon says.

It’s the hammer and nails of the design process that brings forth the final experience that is all worth it in the end.

HERS – Home Energy & Efficiency Rating Systems

Those of you who may have built or bought a new home in the City of Santa Fe over the last few years may be familiar with the terms ‘HERS Rating’. HERS (Home Energy Rating System) is a tool for measuring the energy performance of a home. 

It has become the standard method across North America for ranking homes in terms of energy efficiency. Much like the MPG (miles per gallon) rating on a car; a HERS rating describes how energy efficient a home will be.  But energy performance is not the only way to quantify a home’s efficiency.

Going From HERS To WERS:

Water efficiency, as we all know, is all too important in this era of ever growing scarcity of water resources.  And homes are a major source of water consumption in any community. Santa Fe is known as one of the most water efficient cities in the country, and it would make sense that the City Different would spawn a Water Efficiency Rating System or WERS!

In fact we have. Thanks to the combined efforts of water efficiency experts from the Santa Fe Area Home Builder’s Association (SFAHBA), Santa Fe Community College and others from The Foundation for Building and Green Building Coalition, the launch of a new WERS tool is imminent. 

SFAHBA’s Green Building Council provided a portion of the seed money needed to design and develop a mathematical model for measuring and scoring a home’s water efficiency performance based on its design.

Developing the WERS Tool:

Major components of the tool include calculating typical water consumption from various plumbing fixtures based on the ‘gallons per minute’ or ‘gallons per flush’ rating of such fixtures, and the household occupancy level. It is a performance based method that allows home owners, architects and builders to prioritize which fixtures are best suited for their personal needs/desires while assuring overall water use reduction is attained. 

The WERS tool also encourages the use of both rainwater and grey water as a source for both outdoor irrigation and INDOOR use (with proper protocols for health and safety).

The local developers of the WERS tool worked extensively with experts from around the country to assure the method would be appropriate across a national platform. Major national players including RESNET (the licensing agent of the HERS Protocol) and major housing developers are taking notice of our efforts, as they look to adopt water efficiency tools by which to rate homes. 

And with the coming 60 day session of our state legislature, efforts to renew and refund the Sustainable Building Tax Credit will likely find broader support with the inclusion of a WERS type provision.

It is likely that national organizations like RESNET will be looking closely at our locally crafted WERS tool as they begin their process of including water conservation in their set of rating tools. This will only further bolster Santa Fe’s reputation as a leader in water conservation nationally, and help to influence law makers here at home for inclusion of water conservation requirements in new policies.

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