Although the city of Albuquerque has not managed to avoid the housing crisis entirely, it has remained impressively stable compared with the rest of the nation. The entire state of New Mexico has fared well in the midst of the real estate fiasco sweeping the United States, maintaining low foreclosure levels and reasonable appreciation rates while many other states drown in a sea of foreclosed properties. Investors on the lookout for a region in which the housing market has a positive outlook may want to consider spending a little time researching Albuquerque.
As of July 2007, there were 518,271 people who called the city of Albuquerque home. This number experienced a 13 percent increase from the year 2000. The city covers a land area of 180.6 square miles and has a population density of 2,869 people per square mile. The median household income was estimated at $43,677 in 2007, with 15.8 percent of residents living below the poverty line. As far as demographics are concerned, Albuquerque’s population is 49.9 percent White, 39.9 percent Hispanic, 4.9 percent American Indian and 3.1 percent Black, according to City-Data.com.
New Mexico real estate didn't see an excessive boom like other southwestern areas
The median price of Albuquerque homes on Zillow.com is $232,622, and median gross rent was $666 in 2007. The state of New Mexico has a very low number of foreclosure filings when compared to the rest of the United States; it ranked 42nd on RealtyTrac’s October 2008 foreclosure market data report. New Mexico foreclosures decreased by 45 percent since October 2007. According to the report, in New Mexico approximately one out of every 3,220 homes is in foreclosure. Comparatively, the national average is one out of every 452 homes. One of the possible reasons for the state’s low foreclosure rate could be that New Mexico’s housing markets never experienced the excessive boom that other regions saw, according to
The Albuquerque Tribune.
A recent report released by HousingPredictor.com, a site that forecasts conditions for real estate markets across the United States, placed Albuquerque among the top ten most promising housing markets in the nation. Cities in neighboring states Colorado (Grand Junction) and Texas (Austin) also made the cut. Albuquerque came in tenth on the list.
At first glance, the city’s appreciation rate of 0.95 percent in the second quarter of 2008 does not sound particularly exciting. But Albuquerque is faring better than other cities of similar size in the area. Approximately 450 miles to the southwest, Tucson experienced a -5.86 percent appreciation rate in the second quarter. 450 miles to the north, Denver’s appreciation rate was 0.38 percent for the same period, according to data from the Office of Federal Housing Oversight. When compared with these other cities, Albuquerque’s real estate market seems to be weathering the storm well.
“October saw 1,411 new detached residential listings come on the market. This number is down [six percent] from last month, following the similar trend for the last [three] years. There were 1,086 pending and closed sales, down from last month,” according to the Greater Albuquerque Association of REALTORS’ October 2008 Home Sales Report.
This isn’t to say that the real estate market in Albuquerque is magically immune to all of the problems facing the housing market. Appreciation rates in the region have certainly declined in recent years and months, just as they have all across the United States.
“[T]he market [in Albuquerque] is making a transition. Home prices are beginning to slide for the first time in years as the mortgage melt down affects the area. Loans are becoming tougher to get, and some prospective home buyers are failing to qualify for financing. It’s taking longer for homes to sell in Albuquerque. The boom is over,” according to Housing Predictor’s New Mexico report.
Remember that 0.95 percent appreciation rate that looked so impressive next to Tucson and Denver? During the same period last year, it was 8.91 percent. That’s a 7.96 percent decrease over a period of a year. And 2.36 percent of the drop occurred between the first and second quarter of this year, when Albuquerque’s appreciation rate fell from 3.31 percent to 0.95 percent.
“The market will see slower sales in 2008...and rack up just mild appreciation compared to last year...as the market winds down from its boom,” according to a Housing Predictor report.
Although investors should not go running out to snap up properties in Albuquerque as though it’s an enchanted oasis in the desert of the housing crisis, the city may be worth a more in-depth look. Its resilience in the face of the problems in the real estate market may make it a promising option for home investment over the coming months. Investors interested in learning more about Albuquerque and its real estate market conditions should get in touch with relevant local groups, such as the Greater Albuquerque Association of REALTORS, to learn more about the area before investing.
