Jul. 2—According to creditkarma.com, 87506 is New Mexico’s most expensive ZIP code. Also, and somewhat surprising in light of New Mexico’s reputation for being one of the country’s most impoverished states, the 87506 ZIP code ranks as the 32nd most expensive in the country (with an average median home value of $ 1,046,788). Overall, 19 of the 50 most expensive ZIP codes in the U.S. are in the San Francisco Bay Area or Silicon Valley, followed by another 15 in Southern California. (In contrast to the most expensive zip codes, the cheapest zip code goes to Lashmeet, West Virginia, where homes there had an average value of $16,389.)

The US Postal Service considers Santa Fe the “primary/preferred city” within the 87506 ZIP code, but Jaconita, the Tesuque Pueblo, the Nambe Pueblo, the San Ildefonso Pueblo and Pojoaque are also included within the ZIP code. People living in 87506 are primarily Caucasian and middle-age-or-above adults. There is a slightly higher than average number of single adults and a slightly less than average number of families. The percentage of children under 18 living in the ZIP code is slightly less than average when compared with other parts of the country.

According to Neil Lyon, a 29-year Santa Fe real estate veteran with International Sotheby’s who specializes in the luxury home market niche, Las Campanas, along with being the most “visible” neighborhood within the 87506 ZIP code, is also the most illustrative market of what has been going on with property appreciation in Santa Fe since 2018. Take a look at these numbers that come from MLS data:

Lyon believes that Santa Fe, like many other parts around the country, is seeing an unusual housing market. “Home sales are down around the country, and particularly in our Mountain Region, by 20, 30, 40 percent, despite there being high demand,” he says. “Here in Santa Fe, because of our restrained, small market, we’re seeing continued high demand … with home values remaining stable and mostly going up.”

Much of that high demand is coming from Texas, California (particularly, since the pandemic, the San Francisco Bay Area) and within New Mexico itself from buyers who are redefining their lifestyles. Depending upon where they are in their life stages, some buyers are upsizing to accommodate their increasing family sizes. Some are downsizing their housing costs to reflect transitions due to changing marital statuses, retirement and/or adult children becoming independent. Other buyers are looking for “bargains” when compared with housing prices in high-cost states. “People are anxious to get a foothold in this market,” says Lyon. “They want this lifestyle.”

What, if anything, will slow down buyer demand for homes within the 87506 ZIP code? “The quality and maintenance of the home,” says Lyon. Not the price. Not the interest rate.

“The higher the price, the more likely financing will not be involved … and even if financing and interest rates are involved … those who need financing are looking at current interest rates as temporary. They’ll simply refinance next year or the year after, once rates come down and stabilize.”

Lyon adds, “Many buyers and sellers often want to work together collaboratively [to obtain] the best possible transaction, so that they both walk away from the completed transaction feeling as they each got the best deal they could.”

New Mexico first in homeowners insurance rates increase

As recently reported by ValuePenguin, a research and analysis arm of Lending Tree, homeowners insurance rates continue to climb across the country, with the fastest in-creases coming in New Mexico. Since the be-ginning of 2023, the nationwide increase has been an average of 2.8 percent. But in New Mexico, homeowners insurance rates have gone up 8.3 percent, the highest of any state. (Arizona ranked second at 8.2 percent.)

Despite this year’s rise in homeowners insurance rates, it is still lower than the 4.9 percent average increase in 2022. And since 2018, rates have increased a cumulative 19.1 percent across the U.S. (The cumulative rate change in New Mexico over that time: 31.5 percent.) According to ValuePenguin home insurance expert Divya Sangameshwar, “In 2023, the rising cost of labor and materials for rebuilding, rising home values, an end to COVID-19 pandemic trends — like working from home — and a resurgence in property crime have all made a significant impact on U.S. homeowners insurance claims.”

Why New Mexico—land of so few natural disasters? Blame extreme weather and climate disasters, which led to damages or costs that exceeded $1 billion in 2022. Hence, the precipitous rise in homeowners insurance. Last year alone, there were 119 natural catastrophes, which led to $98.9 billion in insured losses. Most of the insurance loss events were severe convective storms and wildfires, droughts and heat waves.

And while Sangameshwar believes that the rise in insurance rates can be tied into the value of one’s home—or the zip code in which one resides—”the one factor really impacting homeowners’ insurance premiums is the worsening frequency of extreme weather events.”

According to QuoteWizard, another arm of Lending Tree, homeowners insurance in New Mexico costs an average of $173 a month, which is 17 percent higher than the national average home insurance rate of $146 a month. New Mexico’s high rates are due in part to the state’s wildfire risk. Wildfires can completely destroy a house, and so insurance companies jack up their premiums to offset this risk. Even so, Santa Fe County, despite it being home to one of the most affluent zip codes in the country, still ranks only third in New Mexico in its average annual premium—behind Bernalillo and Doña Ana counties. (Go figure.)

To keep your homeowners insurance manageable, Sangameshwar has three suggestions: comparison shop, look for discounts and raise your deductibles. And hope for rain (although—not too much rain).

87506: New Mexico’s most expensive zip code