Albuquerque, NM Real Estate Market Trends & Analysis [Updated 2021]

by Than Merrill | @ThanMerrill
Published on Mon, Apr 12 2021

Jump To Another Year In The Albuquerque Real Estate Market:

The Albuquerque economy, not unlike the rest of the country, has experienced a setback in the wake of COVID-19. The pandemic has shuttered the economy, as “shelter-in-place” orders issued by the government have ceased a large portion of business activity. That said, the Albuquerque real estate market appears poised to return to pre-pandemic form sooner rather than later. The momentum real estate in Albuquerque generated leading up to last year looks like it is returning to form. Several positive indicators are working in the housing market’s favor. In fact, Albuquerque can come out of 2021 even stronger than when it went in, which bodes well for local investors.

Albuquerque Real Estate Market 2021 Overview

  • Median Home Value: $243,300

  • 1-Year Appreciation Rate: +13.5%

  • Median Home Value (1-Year Forecast): N/A

  • Median Rent Price: $1,325

  • Price-To-Rent Ratio: 15.30

  • Unemployment Rate: 7.7% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 560,513 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $52,911 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 7.51%

  • Foreclosure Rate: 1 in every 7,088 (1.4%)

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Skyline view of Albuquerque, NM.

2021 Albuquerque Real Estate Investing

Much like the rest of the country, the Albuquerque real estate market saw an influx in real estate investing activities after the Great Recession. At the time (around the first quarter of 2012), home values had been suppressed for far too long, and foreclosures ran rampant, which created a surplus of distressed homes with extremely attractive profit margins. For nearly a decade, in fact, rehabbing and real estate “flipping” remained the preferred exit strategy for local real estate investors.

It should be noted, however, that home prices in Albuquerque have increased year-over-year since bottoming out in 2012. The same profit margins investors once found readily available are growing harder to find. That’s not to say rehabbing isn’t still a viable exit strategy in Albuquerque, but rather that today’s market landscape appears to favor an alternative investment strategy: procuring and building a portfolio of rental properties.

Real estate is cyclical, and rehabbing has enjoyed a run as the country’s most popular exit strategy for the better part of a decade. Still, the new market landscape created by the pandemic and years of appreciation has shifted fundamental indicators in favor of rental property owners. That said, here are some of the new Albuquerque real estate market trends benefiting today’s rental property investors:

  • Interest rates on traditional loans are historically low

  • Years of cash flow can easily justify today’s higher acquisition costs

  • Inventory shortages will increase rental demand

As of March, the average rate on a 30-year fixed-rate loan was 3.08%, according to Freddie Mac. While rates are increasing, today’s 3.08% is a huge improvement over the prior year. Lower borrowing costs have brought down acquisition costs for those looking to add to their passive income portfolio. At their current rate, mortgage rates will save today’s buyers thousands of dollars, and real estate investors will be able to pad their bottom line.

In any other market, Albuquerque’s 15.30 price-to-rent ratio would work against rental property owners. If for nothing else, it is unequivocally more affordable to buy than rent in Albuquerque. However, new listings in Albuquerque are down 6.7% year-over-year, according to the Greater Albuquerque Association of REALTORS®. The decline in listings further exacerbates the already existing inventory crisis, making it harder for residents to buy and increases the demand for rental properties. There aren’t enough listings to satiate demand. Even buyers who are ready and willing to take the leap into homeownership are forced to rent in today’s market, which is great news for rental property owners.

Investors are lucky to have several viable exit strategies at their disposal. Still, none appear more attractive than building a proper rental property portfolio in the wake of new Albuquerque real estate trends. Simply put, too many important market indicators are pointing towards becoming a buy-and-hold investor to ignore.

2021 Foreclosure Statistics In Albuquerque

The foreclosure rate in Albuquerque is a little on the high side, at least when compared to the national average. According to RealtyTrac, in fact, the ratio of distressed homes in Albuquerque is nearly twice that of the national average. With one in every 7,088 homes in some stage of distress, Albuquerque’s foreclosure rate is about 1.4%. The United States on the other hand, has a foreclosure rate of 0.8%, which translates to about one in every 12,001 homes being distressed.

Foreclosures represent a great opportunity for the entire Albuquerque real estate investing community. At the very least, distressed homes are often easier to acquire and are more likely to be bought at a discount. Local investors looking to capitalize on lower acquisition costs should pay special considerations to Albuquerque’s pre-foreclosure inventory, as it currently represents the highest distribution of the city’s distressed homes. With 55.2% of the city’s distressed homes, pre-foreclosures should give investors the best chance of landing a deal for below market value. With more than half of the city’s distressed inventory at risk of foreclosure, distressed homeowners with the proper motivation could represent a great buying opportunity.

To narrow the search down even further, here’s a list of the neighborhoods with the highest distribution of foreclosures:

  • 87120: 1 in every 4,129 homes is currently distressed

  • 87121: 1 in every 4,219 homes is currently distressed

  • 87107: 1 in every 4,763 homes is currently distressed

  • 87110: 1 in every 6,268 homes is currently distressed

  • 87112: 1 in every 6,700 homes is currently distressed

The presence of the Coronavirus is expected to induce an influx of filings over the course of 2021. The financial burden created by the pandemic and government-mandated quarantines has already proven difficult for many homeowners to keep up with mortgage obligations. As a result, it is safe to assume more homeowners will file for foreclosure as the year progresses. Consequently, investors who line up financing and position themselves for success at this time could be in line for a busy second half of 2021.

2021 Median Home Prices In Albuquerque

The median home value in Albuquerque is $243,300, according to Zillow. At today’s levels, the median home value is under the national average ($272,446). That said, the Albuquerque housing market has come a long way in a relatively short period of time. No more than eight years ago (August 2012), Albuquerque’s median home value was about $169,000 and attempting to recover from the Great Recession. Thanks—in large part—to improving sentiment, a strengthening economy, and (ironically enough) a distinct lack of inventory, Albuquerque demonstrated an increased propensity for appreciation. Over the last eight years, in fact, the median home value increased 43.9%.

Over the same period of time (August 2012 to August 2020), the national average increased more than fifty percent. The latest increases have people asking one question more than anything else: Is not a good time to invest in Albuquerque real estate? There’s no doubt about it: Albuquerque is a hot market.

Over the last year, local real estate has appreciated at a faster rate than the national average—13.5% and 9.9%, respectively. The difference may be attributed to the city’s decline in new listings, which has simultaneously increased competition and prices. Consequently, Albuquerque’s unemployment rate appears to have been slightly more insulated than the national average. While spiking to 12.3% in the second quarter of last year, local unemployment never exceeded the national average, and is on the mend. The improved economic outlook suggests more people will be looking to buy sooner rather than later, and there still isn’t enough inventory, which will drive prices up further.

Due to supply and demand discrepancies, these neighborhoods have become the most expensive in Albuquerque (according to NeighborhoodScout):

  • Sandia Heights

  • Modesto Ave NE / Eubank Blvd NE

  • Las Lomas Rd NE / Spruce St NE

  • Alexandria Dr / Lowell Dr NE

  • Rio Grande Blvd NW / Teodoro Rd NW

  • Paseo Del Norte NE / Eubank Blvd NE

  • Camino De La Sierra NE / Hugh Graham Rd NE

  • Glendale Ave / Barstow St NE

  • City Center

  • Tramway Blvd NE / Manitoba Dr NE

Home prices are expected to continue rising at a fast pace. Improving employment numbers, pent-up demand, and a lack of available inventory will all contribute to higher home values over the course of 2021. In fact, there’s a good chance price will continue rising until more inventory is brought to the market. Builders (who were slowed down during the pandemic) are working their hardest to increase supply, but new builds will take time. Help is on the horizon, but prices will keep rising until it gets here.

Albuquerque Real Estate Market: 2020 Summary

  • Median Home Value: $216,090

  • 1-Year Appreciation Rate: +7.0%

  • Median Home Value (1-Year Forecast): -0.7%

  • Median Rent Price: $1,325

  • Price-To-Rent Ratio: 13.59

  • Unemployment Rate: 8.9% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 560,513 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $51,128 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 7.51%

  • Foreclosure Rate: 1 in every 8,374 (1.1%)

Albuquerque Real Estate Investing 2020

Albuquerque real estate investing trends followed the same trajectory as the rest of the country in 2020. When the year first started, home values were in the midst of an eighth consecutive year of appreciation. Prices had increased every year since 2012, and the lack of supply heading into 2020 suggested last year would be no different. However, the Coronavirus’s impact on real estate in Albuquerque forced the city to take a breather, albeit a short one. When the pandemic was officially declared, activity came to a stop, and nobody was looking to buy or sell. In just a few short weeks, the hot real estate market was receiving its first threat in nearly a decade.

However, in an attempt to stimulate more activity, the government announced it would keep interest rates low, at least for the next few years. As borrowing costs dropped to historic lows, more buyers got off the fence and started participating in the market. Activity quickly turned into demand, and demand turned into competition. By the second quarter, demand outpaced supply, and home values increased dramatically.

Increasing prices in the face of low inventory levels forced the Albuquerque real estate investing community to rethink its exit strategies. Whereas Albuquerque was once known for its rehabbing potential, the city quickly turned its sights towards long-term investment strategies. Home prices were too high, and profit margins were taking a serious hit in 2020. As a result, investors turned to lenders to take advantage of low borrowing costs. Well under three percent for most of the year, lower borrowing costs helped investors simultaneously offset high prices and increase monthly cash flow from rental properties. That’s not to say investors didn’t flip homes when given the opportunity, only that the 2020 marketplace had fundamentals that favored long-term strategies.

Albuquerque Real Estate Market: 2016 Summary

  • Median Home Price: $193,500

  • 1-Year Appreciation Rate: 5.2%

  • 3-Year Appreciation Rate: 12.8%

  • Unemployment Rate: 6.4%

  • 1-Year Job Growth Rate: 2.2%

  • Population: 556,495

  • Median Household Income: $47,413

Albuquerque Real Estate Investing 2016

Located in the heart of New Mexico, the Albuquerque real estate market held its own in 2016. While lower than the national average, home prices were up from the previous year and continued to climb in the second quarter. Appreciation rates performed better than expected, as gains in the previous three years extended the trend of positive price growth since the recession. Albuquerque real estate also produced home equity, with homeowners and investors earning comparable gains with the rest of the country.

An assortment of factors helped keep the Albuquerque real estate market on course in 2016. In addition to home affordability, which remained among the lowest in the country, Albuquerque real estate benefited from an improving economy and an influx in new housing construction.

The Albuquerque real estate market performed well in 2016, but it wasn’t until the second quarter when things began to heat up. The median home price for Albuquerque real estate was $193,500 during the second quarter, with one-year and three-year appreciation rates of 5.2 percent and 12.8 percent. In comparison, the national average recorded a median home price of $239,167 with one-year and three-year rates of 4.9 percent and 17.8 percent, respectively. Although lower than the rest of the country, the Albuquerque real estate market has experienced positive price growth in consecutive years.

Albuquerque Real Estate Market: 2015 Summary

  • Current Median Home Price: $172,200

  • 1-Year Appreciation Rate: 1.2%

  • Unemployment Rate: 5.6%

  • 1-Year Job Growth Rate: 1.3%

  • Population: 556,495

  • Median Household Income: $48,355

Albuquerque Real Estate Investing 2015

Entering 2015, it had been a long time since homeowners in the Albuquerque real estate market could get excited about the local housing sector. According to Albuquerque real estate news at the time, the whole investing community shared a tepid sentiment. Price gains and equity appreciation weren’t particularly overwhelming, but there were signs of a prosperous future on the horizon. Home builders’ confidence in the market jumped almost five points, matching its highest level since 2005. The same enthusiasm has helped bring the Albuquerque real estate market up to today’s standards.

Home prices were increasing at the time but lagged behind the national bar set at $203,867. Over the previous year, home prices in Albuquerque grew 1.2%, down from a national average of 6.7%. Over the previous three years, Albuquerque real estate appreciated by as much as 5.7%, which is far below national price gains of over 28.8%.

Albuquerque real estate trends were a mixed bag in 2015, as the economy was still trying to get its feet underneath it. Locally, employment held tight after suffering through a major decline in 2009. The unemployment rate in 2015 was about 5.6%, which was slightly above the national average. Local job growth was lower than the national average, too.

Albuquerque County Map:

Map of Albuquerque neighborhoods

Albuquerque Real Estate Market Summary

The Albuquerque real estate market hasn’t had the easiest path towards prosperity, but the last few years have shown the city’s resilience. In fact, having lagged behind many national indicators may have actually worked in Albuquerque’s favor over theist few years. Home prices didn’t have the same type of run-up as many of today’s hottest markets, but demand persisted. As a result, real estate in Albuquerque remains relatively affordable. That said, the pent-up demand created by today’s pandemic has a great chance of returning many buyers to the market. The resulting activity should catalyze the local housing sector, and just about everyone participating should benefit.

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