Albuquerque Market - Why are prices increasing?
I've been investing in the Albuquerque area for almost 3 years. In the last year, I've noticed that home prices are increasing more rapidly. While this isn't going to deter me from investing, I'd like to know if I need to change my investing strategy.
I live abroad most of the year and therefore, have not made an effort to attend any meetups. I read the local news and I talk to friends in the area about the happenings there. I know there are some big things happening in ABQ and surrounding areas - Netflix, Facebook, Intel, New Mexico United, etc. But what is driving the market higher?
Any thoughts would be apprecited.
Those factors are bringing people into the area from out of state for sure, as well as people relocating here from expensive states like California and Colorado. I’ve met quite a few moving from Texas too.
This is all adding to our current market imbalance - it’s a seller’s market.
We have about a 2 - 2.3 month supply of homes, yet a balanced market would be closer to a 6 month supply, and so there’s a lot of competition and higher home prices.
@Kristen Marino I did a presentation on the state of the market in ABQ at last months ABQREIA. Here is a copy:
https://drive.google.com/open?...
Highlights -
NM Populations is not growing as fast as a lot of other places
NM Unemployment is at 4.9% (full employment is considered 6%)
July 2018 Inventory 3500 Detached Homes - July 2019 Inventory 2300 Detached homes!
July 2018 Absortion 3.7 Months - July 2019 Absortion 2.3 Months
July 2018 Median Sales Price $210k - July 2019 Median Sales Price $232K
Lots of good employment coming in to town - Intel and Sandia are hiring for sure. My Rio Rancho rentals are getting picked up in a heartbeat due to intels numerous new employees and contractors.
In short - its a simple supply/demand imbalance. Great topic!
This is great info thanks for bringing it up as I have noticed higher prices for properties that are of lower quality. @David Torres great presentation information.
I recently listed one of the rental properties I own. I received three full price offers and eventually accepted an offer that was 12k more than my asking price. The market here is definitely good for sellers - particularly if it's a quality property. Like others have said before, my understanding is that there is very little supply here in ABQ.
Average price is up 8.2%, median price is up 9%. These are year to date 2019 over 2018 pricing.
Evertyhing said in the responses and Sandia Labs is hiring about 2,000 people. New positions and replacing retiring employees. They are hiring a lot of engineers from out of state. I have helped a lot of them buy homes. They get paid great and buy nice homes