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 last three years have extended the trend of positive price growth since the recession. Albuquerque real estate also produced in the form of home equity, with homeowners and investors earning comparable gains with the rest of the country. While the Albuquerque real estate market remains under the radar, the trend isn’t expected to last for long.
An assortment of factors helped to 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. Additional improvements need to be made, but the first six months of the year fared well for the Albuquerque real estate market and should continue to do so moving forward.
Albuquerque, NM Real Estate Market Statistics:
Appreciation for Albuquerque real estate continued on an upward trajectory in 2016, despite rates falling short of the national average. One-year and three-year rates reached 5.2 percent and 12.8 percent during the second quarter, compared to 4.9 percent and 17.8 percent by the rest of the country. The last three years have benefited homeowners and investors alike, as appreciation growth also contributed to positive gains in the form of home equity. For those considering Albuquerque real estate investments, the following outlines appreciation gains from previous years:
- Homes purchased in the Albuquerque, NM housing market one year ago have appreciated, on average, by $12,538. The national average was $14,963 over the same period.
- Homes purchased in the Albuquerque, NM housing market three years ago have appreciated, on average, by $30,928. The national average was $46,878 over the same period.
- Homes purchased in the Albuquerque, NM housing market five years ago have appreciated, on average, by $39,836. The national average was $82,353 over the same period.
- Homes purchased in the Albuquerque, NM housing market seven years ago have appreciated, on average, by $31,311. The national average was $77,054 over the same period.
- Homes purchased in the Albuquerque, NM housing market nine years ago have appreciated, on average, by $18,747. The national average was $31,126 over the same period.
Gains in home equity for Albuquerque real estate remained competitive in 2016. Homes purchased one year ago have appreciated by $12,538, whereas homes in the rest of the country appreciated by $14,963. Price appreciation and principle payments in the last three years have boosted total equity growth since the recession, which bodes well for Albuquerque real estate investors and homeowners. The last nine years have earned positive gains in home equity, but continue to fall short of the national average. The largest gain in home equity was earned in year five, when homes appreciated by $39,836. In spite of trailing equity gains, Albuquerque real estate investing remains attractive in terms of investment opportunities.
Those opportunities also include foreclosures. According to RealtyTrac, the Albuquerque real estate market had 2,498 properties in some stage of foreclosure in the month of December. That number is high in comparison to other markets, but represents a 30 percent decline from the previous month and 30 percent lower than the same period last year. The number of banked owned real estate (REO) in Albuquerque was also down, as REO properties fell 41.3 percent from the previous month and 6.2 percent from the same period last year. That said, the Albuquerque real estate market is rich with investment opportunities, particularly when it comes to foreclosures.
Albuquerque, NM Real Estate Market Summary:
- Current 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, NM Real Estate Market (2016) — Q2 Updates:
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.
The local economy was among several market factors that influenced the Albuquerque real estate market in the second quarter. Unemployment in the area continued to lag behind the national average, as rates reached 6.4 percent in Q2 versus 4.9 percent by the rest of the country. Job growth, on the other hand, continued to improve as one-year job growth in Albuquerque reached 2.2 percent. That was not only better than the previous quarter, but higher than the 1.9 percent recorded by the rest of the country.
Another factor to consider in the Albuquerque housing market is affordability. Homeowners in paid 10.6 percent of their income to mortgage payments, compared to the15.8 percent paid by the national average. Along with home affordability, new housing construction continued to garner steam in the second quarter. The level of construction reached 18.3 percent above the long-term average, with single-family housing permits increasing 3.9 percent. Construction is on the rise relative to last year, suggesting that local inventory in Albuquerque has stabilized.
Pushing ahead, the Albuquerque real estate market is expected to see weaker price growth in the next 12 months than the rest of the U.S. According to the National Association of Realtors (NAR), home prices for Albuquerque real estate is forecasted to grow by 2.6 percent, compared to the national average of 3.6 percent. Nevertheless, the Albuquerque real estate market is poised to see an increase in investor activity in the next few years.
