Albuquerque, NM Real Estate Market Trends & Analysis [Updated 2020]

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 has generated over the last year looks like it is returning to form, and a number of positive indicators are working in the housing market’s favor. In fact, it is entirely possible for Albuquerque to come out of 2020 even stronger than when it went in, which bodes well for local investors.

Albuquerque Real Estate Market 2020 Overview

  • 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%)

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Skyline view of Albuquerque, NM.

2020 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 surpassed 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. To this day, the Albuquerque housing market hosts plenty of opportunities for rehabbers.

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, but the new market landscape created by the pandemic and years of appreciation have 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 July, the average rate on a 30-year fixed-rate loan was 3.02%, according to Freddie Mac. July also represented one of the lowest average mortgage rates ever, and the Fed has already announced its intentions of keeping rates low for the foreseeable future. As a result, 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 bottomline.

In addition to lower borrowing costs, Albuquerque real estate investors stand to make a profit on newly acquired rental properties. Let’s say, for example, an investor was able to acquire a home for $216,090 (Albuquerque’s median home price) and put down $43,000 (about 20.0%) at signing. After accounting for things like a 3.02% interest rate, property taxes, and a few other costs, the monthly mortgage payment would come out to somewhere in the neighborhood of $1,183. In the event the investor was able to receive $1,325 a month in rent (the median rent price), they could come away with a cash flow of about $142 a month. While these numbers are just averages, the potential to increase cash flow has been magnified by the demand for rental properties over the course of the pandemic.

In any other market, Albuquerque’s 13.59 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 4.5% year-over-year, according to the Greater Albuquerque Association of REALTORS®. The decline in listings further exacerbates the already existing inventory crisis, which simultaneously makes it harder for residents to buy and increases the demand for rental properties. There simply 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 a number of viable exit strategies at their disposal, but 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.

2020 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 8,374 homes in some stage of distress, Albuquerque’s foreclosure rate is about 1.1%. The United States on the other hand, has a foreclosure rate of 0.6%, which translates to about one in every 15,226 homes being distressed.

Despite boasting a foreclosure rate that is nearly twice that of the national average, Albuquerque has actually had a lot of success lowering its foreclosure filing rate over the last year. As recently as June, in fact, “the number of properties that received a foreclosure filing in Albuquerque, NM was 19% lower than the previous month and 87% lower than the same time last year,” according to RealtyTrac.

The Albuquerque real estate market has actually seen greater improvements in its own foreclosure rate than the national average. “In July, the number of properties that received a foreclosure filing in U.S. was 4% lower than the previous month and 83% lower than the same time last year,” according to data presented by RealtyTrac.

Regardless of the improvements made over the last year, Albuquerque’s foreclosure rate remains high. However, 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 foreclosure auctions, as they currently represent the highest distribution of the city’s distressed homes. With 47.6% of the city’s distressed homes, auctions should give investors the best chance of landing a deal for below market value. With nearly half of the city’s distressed inventory up for auction, bidding at auctions in Albuquerque will tilt the scale in investors’ favor.

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

  • 87105: 1 in every 3,700 homes is currently distressed

  • 87104: 1 in every 6,159 homes is currently distressed

  • 87113: 1 in every 6,181 homes is currently distressed

  • 87120: 1 in every 6,194 homes is currently distressed

  • 87121: 1 in every 8,437 homes is currently distressed

Foreclosure filings have dropped in recent history. However, the presence of the Coronavirus is expected to induce an influx of filings over the course of 2020. 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 2020.

2020 Median Home Prices In Albuquerque

The median home value in Albuquerque is $216,090, according to Zillow. At today’s levels, the median home value is slightly under the national average ($248,857). 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), the median home value in Albuquerque 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 27.8%.

Over the same period of time (August 2012 to August 2020), the national average increased somewhere in the neighborhood of 52.6%. 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—7.0% and 4.1%, 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 April, 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

Again, Albuquerque’s unemployment was slightly more insulated than the national average, which suggests the pandemic may not drop local home values as much as the national average. While home values in Albuquerque are forecasted to drop a modest 0.7% over the next year, the median home value in the United States may drop by as much as 1.5%. It is worth noting, however, that the decline is only expected to be temporary. Pent-up demand and a lack of inventory should drive prices higher sooner rather than later, which means today’s prices may actually represent an opportunity for local investors.

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. Home prices, while lower than the national average, 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 into 2015, it had been a long time since homeowners in the Albuquerque real estate market were able to 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. It is that same enthusiasm that 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 still 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 serve as a catalyst for the local housing sector, and just about everyone participating should benefit.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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