Mar. 21—Anyone who's ever gone down a real estate rabbit hole knows the drill.
Maybe your neighbor's house is suddenly on the market, or you hear your favorite restaurant is getting a new landlord. You turn to the internet, address in hand, to see what you can see.
Between commercial sites like Zillow or Redfin, and government sources like the county assessor or clerk's office, there's lots at your fingertips: listing price, owners' names, square footage, liens, even satellite images or photos of the property.
But there's one piece of information you can't find in New Mexico, at least not without the help of a real estate agent or broker: What the property actually cost the last time it sold.
New Mexico is one of only about a dozen or so states that hides real estate transaction prices from the public. Those prices are available only via "multiple listing services," private databases maintained by real estate professionals.
Shielding sales prices from the public creates an unnecessary barrier to New Mexicans with an interest in buying or selling property, and makes it harder to get an accurate sense of what property is actually worth, according to Reilly White, an economist and associate professor of finance at the University of New Mexico's Anderson School of Management.
"It really limits the availability of information for fair pricing ... into sort of the hands of a select group of real estate agents that have access to these systems," White said.
But bringing more transparency to real estate sales prices would mean New Mexico buyers and sellers giving up some privacy, as well as real estate agents' exclusive hold on a key piece of information. The most recent legislative effort to bring more transparency to real estate transaction prices was unsuccessful.
Whose business is it, anyway?
Across the country, making real estate prices available to the public is the norm, but New Mexico isn't the only state to buck that trend. The largest is Texas, but Utah, Idaho, Wyoming, Montana and Mississippi are among others that keep purchase prices under wraps.
State Sen. Steven Neville, an Aztec Republican and longtime Realtor, said he doesn't think it's a coincidence that, with the exception of New Mexico, states that hide or limit sales prices run from red to deep red.
"I think the conservative mindset says, 'This is personal information,' " Neville said. "That's the attitude. ... I don't necessarily agree with it."
Neville said in many states, that mindset has evolved as taxes grew and became more complex.
Neville pointed out he owns property in Colorado, where purchase price is a matter of public record, and it "doesn't get under my skin." He said he would support full disclosure of purchase prices, adding that in his mind, it's an issue of fairness.
"If you and I have the same building side by side, and I'm paying taxes on a half-million and you're paying taxes on a million, you're getting screwed, and that's not fair," Neville said.
But some still value the level of privacy currently afforded under New Mexico law.
Ernie Romero, a longtime Santa Fe commercial real estate broker and property owner, said he's one of them.
"In a lot of cases it's none of their damn business" how much a property cost, said Romero, who buys and sells all types of commercial properties. "... It's my business. It's my banker's business."
Marc Bertram, another Santa Fe-based broker/developer, said he thinks that feeling is common among property owners.
"There are some of the people that own large commercial real estate holdings that don't want to disclose, for whatever their own reasons might be," Bertram said. "They don't want necessarily the world to know their business."
Economic effects of nondisclosure
Real estate agents across the country are currently looking for answers as to how a $418 million settlement brought about by a series of lawsuits against the National Association of Realtors and others will shake out in their own backyards. White, the UNM economist, said he can understand why some agents in New Mexico and other nondisclosure states might see an incentive in keeping purchase prices away from public view: It gives them an added value.
But he said in his view, making sales prices open to the public would not jeopardize the use of real estate agents and brokers.
"Realtors are incredibly valuable because they're able to make a labyrinthian set of very ... complex information, very legalistic information accessible," he said. "I still think everybody is going to use brokers."
Other than meeting the desire for privacy, he said, hiding real estate prices from the public has little economic upside.
"I would say for consumers ... nothing comes to mind that would benefit them," he said.
White said people who are interested in representing themselves through a home sale or purchase are the most affected by New Mexico's nondisclosure status because they don't have a good way to analyze the market themselves.
But they're not the only ones. Not having immediate access to purchase prices can skew people's perspectives of the market or their ability to buy or sell a home, White said. Some research has linked lack of disclosure with inequities in the housing market, while some studies show perception of the housing market changes the way people spend their money even outside of the world of real estate.
"There's a lot of research that suggests that consumer behavior is heavily influenced by how much they think their house might be worth," White said. "... When people are, for instance, confident that the fair value of their home is higher or it has risen in the last few years, they're more likely to spend money and they save less and they do other things because they feel richer."
From a broader view, White pointed out the U.S. is currently in one of the worst markets ever seen for first-time homebuyers, thanks to high prices and high interest rates.
"Research shows a positive link between information disclosure and marketing outcomes," he said. "So the more information you have available, the more likely you'll get sales and more likely you'll get liquidity."
Neville said New Mexico residents also have a tougher time judging how fairly they're being taxed, and knowing whether they should protest their taxes.
"You can hire an appraiser or something, but you don't have any information as far as public sources to go challenge your taxes," he said. "[With that information] you could know if you're fairly treated or not."
Rep. Kathleen Cates, D-Rio Rancho, has been a Realtor for a little more than three years and said she questions how much of a barrier New Mexico's nondisclosure status is for consumers. She said for people working with a real estate agent, access to purchase price information is really only a phone call away.
"They get all the information I have when they ask for it," Cates said of her clients. "... I've run into zero issues from consumers about it all."
Complex commercial assessments
Another problem with New Mexico's secrecy around real estate sales has to do with the way tax levels are set.
When residential property changes hands, the purchase price isn't made public — but county assessors do get access to that price, which they use to determine how much the property is worth in taxes, said Santa Fe County Assessor Isaiah Romero.
"That allows county assessors to have relatively good information to set the assessment," he said.
But that doesn't happen with commercial properties.
Romero, who is also vice chair of the New Mexico Counties Assessors Affiliates, said assessing commercial properties is more complex than homes to begin with. Determining commercial property value involves taking into consideration the cost of the building and value of the land; the income the property can generate, and, in states where assessors have access to purchases prices, comparable sales of similar properties.
"A lot of times, we're not able to reflect that full market value because you're only able to use two methods of valuation," Romero said.
But not all those in the commercial real estate world agree.
Ernie Romero, the Santa Fe broker, said he doesn't see how providing purchase price to the public would help with assessments on commercial properties because of the complexity involved.
"They go through all of these gyrations, and they wind up with a value very close to what you're paying for," he said.
Some efforts for reform
In 2023, working on behalf of the assessors affiliates group, Neville sponsored a bill that would have required limited disclosure for commercial properties' purchase prices — but only for more accurate and equitable appraisals and tax assessments, not for the public.
Neville said he didn't think he introduced that bill early enough. This year he and Sen. Leo Jaramillo, an Española Democrat, proposed a related measure that called for further study of the issue. That measure, Senate Memorial 10, died too.
Damian Lara, Bernalillo County assessor and current New Mexico Counties Assessors Affiliates chair, said he considered the proposal a step in the right direction.
"We are not opposed to full disclosure," Lara said. "We believe that equitable disclosure [to assessors] is a good first step."
White, who worked as a commercial real estate banker before moving into academia, said he agrees disclosure wouldn't necessarily make the complex process of appraising and assessing commercial property that much easier.
But, he said, that doesn't change his belief that purchase price disclosure would overall be a better thing for New Mexico consumers, particularly in the residential realm.
"I would actually argue that ... a nondisclosure state is condescending to the average homebuyer and home seller, because it implies that they don't have the wherewithal or knowledge to ... use information like that in a way that would be beneficial to them," White said. "I'm very much in favor of a much freer availability of information."
