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New Mexico Real Estate Market Trends & Analysis

The New Mexico real estate market is starting to show the first signs of cooling off in about a decade. For the better part of ten years, in fact, real estate in New Mexico has been firing on all cylinders. Following the great recession, a booming economy and affordable home prices resulted in a great deal of activity. Even the pandemic, as unwelcome as it was, catalyzed one of the hottest New Mexico real estate markets the state had ever seen. However, the Federal Reserve has had to tighten the economy in the wake of historic inflation and a potential recession on the horizon. As a result, higher interest rates are leading to fewer mortgage applications and stripping sellers of the power they have had for far too long. That is not to say New Mexico is no longer a seller’s market, but rather that the balance of power is starting to shift; let’s take a look at what that means for the New Mexico housing market and all of its participants.

The Top New Mexico Real Estate Markets

While the best real estate market in New Mexico is up for debate, here’s a list of the cities investors may want to pay special considerations to:

New Mexico Real Estate Fees & Regulations

Real Estate

Closing Conducted by: Escrow
Conveyance: Warranty or Quitclaim Deed

Foreclosure Procedure

Primary Foreclosure Method: Judicial
Process Period: 4 - 6 months
Notice of Sale: Court
Redemption Period: 9 Months


Income Tax: 1.7% - 4.90%
Corporate Tax: 4.8 - 7.60%
Sales Tax: 5.13%
Estate Tax: No
Inheritance Tax: No
Median Property Tax: 0.55%
Property Taxes by County:

Average Transactional Costs

Closing Cost: $2,516.00
Transfer Fee: no fees
Origination Fee: $1,761.00

New Mexico Housing Market Overview

  • Median Home Value: $297,808

  • Median Sales Price (YTD): $305,000

  • 1-Year Appreciation Rate: +16.5%

  • Active Listings: 13,194

  • Homes Sold (YTD): 14,663

  • Average Days On Market: 44

  • Pending Sales: 1,884

  • Median Rent Price (1 & 2 Bedroom Units): $1,258

  • Price-To-Rent Ratio: 19.72

  • Unemployment Rate: 4.4% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 2,115,877 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $51,243 (latest estimate by the U.S. Census Bureau)

  • Foreclosure Rate: One in every 7,074 homes

New Mexico Median Home Prices

The New Mexico real estate market has seen its median home value fluctuate wildly over the course of 10 years. Dating back to the end of 2014, when the New Mexico real estate market started recovering from the Great Recession, local home values dropped as low as $170,764. Improving economic conditions promoted homeownership in the time following the recession, leading to historic appreciation rates. Today, the median home value is $297,808, or 74.3% higher than when it bottomed out eight years ago.

While real estate in New Mexico has appreciated for eight consecutive years, the fastest pace has taken place over the last few years. Since COVID-19 was officially declared a global emergency, in fact, the median home value in the New Mexico real estate market has appreciated by as much as 42.2%. When mortgage rates were lowered to spur buying activity, buyers came out in droves and fostered a level of competition the local market had never seen before. The competition resulted in multiple offers per listing and quickly turned the New Mexico housing market into a seller’s market.

Home prices look as if they will continue increasing, but not at the same pace the state has seen over the last few years. If for nothing else, there aren’t enough listings to keep up with demand. That said, demand has dropped modestly because interest rates have more than doubled year-to-date. Mortgage applications are down because the Fed continues to tighten in an attempt to avoid a recession. Therefore, it’s safe to assume prices will increase, but at a much slower pace.

New Mexico Median Rent Prices

Total rents across the United States are up about 6.8% over the course of 2022. For some perspective, however, rents are not increasing as fast as they were last year. Rents increased 17.1% over the same period of time last year, suggesting the rental market is peaking with its housing market counterpart. In fact, September marked the first month-over-month decrease in rents on a national level all year. The decline may be due to the continued easing of supply.

While the national rental market saw a decline in month-over-month rents, the New Mexico housing market saw a modest increase. Jumping 0.4%, New Mexico’s rent growth was modest but a gain nonetheless. Heading into the fourth quarter, the median rent in New Mexico is now $1,258.

Rents in the New Mexico real estate market are most likely the result of inventory, or lack thereof. With too few listings to keep up with demand on the buying side of housing, more people are forced to continue renting (even if they want to buy). The spillover from the housing market will continue to create more competition in the rental market and drive prices up.

New Mexico Foreclosure Trends & Statistics

According to ATTOM Data Solutions’ latest Foreclosure Market Report, “there were a total of 34,501 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 14 percent from a month ago and up 118 percent from a year ago.”

In August, lenders across the country started the foreclosure process on 23,952 U.S. properties, up 12% from last month and 187% from this time last year.

“Two years after the onset of the COVID-19 pandemic, and after massive government intervention and mortgage industry efforts to prevent defaults, foreclosure starts have almost returned to 2019 levels,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “August foreclosure starts were at 86 percent of the number of foreclosure starts in August 2019, but it’s important to remember that even then, foreclosure activity was relatively low compared to historical averages.”

Following the nationwide increase, the New Mexico housing market has the 35th highest foreclosure rate out of all the states. “Of its 940,859 homes, 133 went into foreclosure, making for a foreclosure rate of one in every 7,074 homes,” according to SoFi. While it is too soon to tell exactly what foreclosures will look like in the immediate future, it’s safe to assume New Mexico will see an increase in foreclosures by the end of 2022 and into next year.

Tax Lien Investing

  • Tax Lien or Deed: Tax Deed state (with challenge possibility)

  • Redemption Period: Sale can be challenged for up to 2 years after sale

New Mexico Real Estate Investing

As prices continue to march higher, more and more investors are starting to consider long-term investments. Rental properties, in particular, appear to be the optimal exit strategy for New Mexico real estate investors. Not only have home values increased to the point where they are too expensive, but the Coronavirus has created a new marketplace with three fundamental indicators that seem to favor landlords over rehabbers:

  • While interest rates have doubled year-over-year, borrowing costs are still low enough to encourage using a traditional loan to buy a rental property.

  • New Mexico’s price-to-rent ratio suggests it is cheaper to buy a home than rent one. However, insufficient inventory levels will relegate more people to the renter pool, making vacancies less of a worry for landlords.

  • With more people being forced to rent, landlords may increase rental asking prices and justify today's higher prices with more cash flow.

Lower borrowing costs will help absorb today’s high prices, but it’s the cash flow potential of real estate assets that makes the prospect of owning a rental property even more attractive. With a median rent price of $1,258, it is possible to simultaneously rent out an investment property while having someone else pay down the mortgage. That way, investors could potentially build equity in a physical asset and collect cash flow each month with the right long-term investment.

As of September, the average rate on a 30-year fixed-rate loan is 6.7%, according to Freddie Mac. To be clear, rates have doubled year to date. Still, at just south of seven percent, rates are still relatively low compared to years past. While higher than they were a year ago, today's rates will help landlords keep more of the cash they collect from rent each month.

If that wasn’t enough, the lack of available inventory will force many residents’ hands into renting, even those intent on buying. New Mexico had already been facing an inventory crisis for the better part of five years, but the introduction of the Coronavirus has shaken seller confidence, and higher rates are preventing homeowners from selling. The lack of homes for sale will inevitably force more people to rent for the foreseeable future, which creates more demand and allows rental property owners to increase rental rates.

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 the pandemic. Too many important market indicators are pointing toward becoming a buy-and-hold investor to ignore.

New Mexico Housing Market Predictions

The New Mexico housing market has enjoyed nearly a decade’s worth of good news. For eight consecutive years, real estate in New Mexico has been able to ride the wake of national trends, albeit to a tempered extent. Price increases, confidence in the market, and several other indicators are heading in the same direction as the rest of the country, but what does that mean moving forward? What can the New Mexico real estate investing community expect for the foreseeable future now that things are starting to slow?

  • Roswell should attract more first-time buyers: While the median home value in New Mexico is below the national average, prices are still higher than they have been in a long time. As a result, it’s safe to assume a growing number of residents in New Mexico will seek out more affordable cities to live in, like Roswell. Already one of the largest cities in the state, Roswell has plenty of demand, but the city’s current median home value should increase demand on behalf of budget-conscious buyers.

  • Inventory levels will continue to drive up prices: Inventory levels have yet to match the pace of demand, which will only serve to stir up more competition. While higher borrowing costs will bring down mortgage applications, there are still too few listings to account for all buyers. Therefore, prices will continue to rise, but at a slower pace than in recent history.

  • Influx of suburban residents: Work-from-home trends have all but eliminated the need to live within close proximity to an office. As a result, it's highly likely we will see a lot of people trade expensive city living for cheaper, suburban alternatives. Secondary cities and suburban areas should see an uptick in demand, which could bode very well for investors ahead of the trend.


The New Mexico real estate market is better off than where it was at the depths of the last recession, but it's now confronted with an entirely new set of obstacles. Fortunately, the state appears resilient and may be able to weather a slowing housing market. In fact, New Mexico's trailing indicators may actually help it through today's inflationary marketplace.


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