New Mexico Housing Market Report - 2023 Update
What’s the New Mexico Housing Market Like?
Home prices in New Mexico have appreciated 191.8% higher than the national level. Looking back three years at the median price in October 2019 compared to October 2022, prices have increased 48.4% in New Mexico VS 35.8% nationwide.
As of October 2022, the median price for a home in the state was $362,000, which is up 14.3% above last year’s median price.
Sales volume has also decreased recently. In October 2022, there were 1,532 homes sold in the state of New Mexico, a decrease of -9.2% from the previous month.
Comparing year-over-year, we saw a decrease of -24.8% sales from October 2021, when there were 2,037 home sales.
The number of sales peak was 5,625 sales in Jul-2022; compared to October 2022’s numbers, we are down -72.8% in the number of homes sold from the peak of the last three years.
It is clear that the recent steep rise in mortgage rates has curved sales activity and shrunk affordability, and the result has been a drop in home prices in New Mexico.
How Does The New Mexico Housing Market Compare to the National Housing Market?
The New Mexico housing market is similar to other markets because supply and demand drive housing prices. Mortgage rates also similarly impact New Mexico as the rest of the nation.
New Mexico’s home prices and sales numbers have begun to slow down along with the rest of the country. Differences in the regional economy of some of New Mexico’s metro areas make those markets more vulnerable and others more resilient to the current economics.
The current median price of homes in New Mexico is $362,000 compared to the national median sales price of $397,549. Over the past three years, the median price of homes in New Mexico has increased by 48.4% compared to the national average of 35.7%
New Mexico Metro Areas With The Hottest Housing Markets
The state of New Mexico has seen above-average growth in housing demand in recent years; consequently, prices had also gone up at a good pace. Some areas within the state have outperformed others, though. We will look at the cities with the highest increase in the median price year over year.
The top markets with the highest appreciation rate:
- Santa Fe
- Los Lunas
- Rio Rancho
- Los Alamos
Santa Fe, the capital of New Mexico, lies in the northern Rio Grande valley at 6,996 feet above sea level. With a population of 87505, it is the fourth largest city in New Mexico. This city is considered one of the world's best art cities because of its many art galleries and installations.
It is a well-liked summer destination due to the dry, refreshing climate, and skiers come in the winter for the mountains.
Santa Fe’s home prices have been doing quite well over the last few years; in fact, Santa Fe topped the list of cities in New Mexico with the largest increase in prices in 2022 with an increase of 27.8% from the prior year. For 2022, October’s median price was $575,000.
In October of 2022, 139 homes were sold in Santa Fe, down -4.7% from the same period in 2021.
The median days on the market in October 2022 was 41, which indicates a balanced market by today’s standards. Compared to October 2021, the median days on the market are down -4.7% compared to October 2022.
The county seat, Los Lunas, is about 20 miles south of Albuquerque and is situated along both sides of the Rio Grande. There are numerous activities in and around the Village of Los Lunas for outdoor enthusiasts and travelers along historic Route 66.
The population of the village is 14,835 as of the 2010 census. Moreover, Los Lunas is conveniently accessible from New Mexico Highways 6 and 314 and from Interstate 25 and the Rail Runner route. Clear, sunny, dry days, a picturesque mountainous landscape, and a generally healthy economy draw in new residents from all over the nation.
The Los Lunas Real Estate market is currently somewhat competitive. In October 2022, there 28 homes were sold with a median price of $297,145. The median home price in Los Lunas has increased 19.8% from October of 2021, while the number of homes sold was 28, a -59.4% decrease compared to the same month the year before.
The median days on the market in October 2022 was 36 and it’s up 111.8% compared to Sept 2021.
Rio Rancho is the 3rd largest city in New Mexico and the fastest-growing community. Also, Rio Rancho has been recognized as one of "America's 50 Best Cities to leave". It covers an area of around 104 square miles and is located at a height of about 5,290 feet.
The population was 87,521 as of the 2010 census. Moreover, this city is regarded as the economic center of the county. It features a high-desert climate.
Rio Rancho is considered a very competitive market right now. In October 2022, there 147 homes were sold with a median price of $297,145. The median price in Rio Rancho was up 19.8% over October of 2021, while the number of homes sold was down -31.3% compared to the same period in 2021.
The median number of days on the market for October 2022 was 24 days which is up 84.6% from October of 2021.
Albuquerque is at the heart of New Mexico and features diverse cultures, authentic art, and dynamic traditions. It is a hub for technology and media companies, historic landmarks, and a diverse restaurant scene. With 916,528 residents according to the 2020 census, it is the 32nd-most populous city in the United States.
Albuquerque's climate is mild and dry, with a yearly average of more than 200 clear days. So you can enjoy the moderate, sunny weather all year long in the state's metropolitan center.
The real estate market in Albuquerque is considered very competitive. There were 580 homes sold in Oct 2022, with a median price of $307,000. The median price in Albuquerque had an increase of 12.5%from Oct 2021, while the number of homes sold was down -31.6% compared to the same period last year.
The median number of days on the market for Oct 2022 was 22 days which is up 29.4% to the same month in 2021.
Los Alamos is a small mountain community of 18000 people known worldwide for its advancements in science and technology. It features small-town living with friendly neighbors, low crime, and a top-notch school system.
Los Alamos is a "big pine" region with a warm, four-season climate. Furthermore, Santa Fe, a city known for its southwest-inspired culture, arts, and food, is a forty-minute drive away.
Los Alamos is currently the most competitive market. In Oct 2022, 23 homes were sold with a median price of $475,000. The median price in Los Alamos saw a decrease of -8.2% over Oct 2021, while sales were down -8.0% compared to the same month in 2021.
The median number of days on the market for Oct 2022 was 11, which is a decrease of -8.2% compared to the same month last year.
Higher Mortgage Rates Could Slow Price Growth in New Mexico
How will interest rates affect the New Mexico housing market? We are already experiencing the impact of rising interest rates across the nation. Price growth in New Mexico has been flattening or on a slight decline for several months in 2022. However, New Mexico is such a high-demand destination that it may very well fare better than many other areas of the country.
As of mid-October 2022, the 30-year fixed rate mortgage is above 7% on average. That represents a 133% increase in mortgage rates in less than nine months. The Feds are on a “no holds barred” approach to curve inflation, and interest rate hikes have become the norm over the last several Fed meetings. Unfortunately, it seems that rate hikes are not done. We anticipate at least another rate increase before the year ends.
Key Market Stats for the New Mexico Housing Market:
As of the latest compiled housing report for October 2022.
|Current Value||Last Year||Change YOY|
|Median Sales Price||$362,000||$316,700||Up by 14.3%|
|Number of sales||1,532||2,037||Down by -24.8%|
|Median Days On The Market||41||33||up by 0.0%|
|Number of homes available||5,891||5,471||Up by 7.7%|
|Months' supply of inventory||3||2||Up by 50.0%|
|% of homes sold above list||20.2%||31.7%||Down by -36.3%|
|% of homes with price drops||21.8%||13.4%||Up by 62.7%|
|New Listings||1627||5471||Down by -70.3%|
New Mexico Historic price changes & affordability
The New Mexico housing market has seen explosive appreciation for years. The last 3 years have been particularly favorable to homeowners as they saw their homes appreciate by 48.4% in 36 months.
The steep rise in home prices and mortgage rates has shrunk affordability to record lows in the state. A 48.4% spike in home prices and a sharp increase in mortgage rates in the last 12 months does not spell good news for the New Mexico Real Estate market.
We know that the average person’s wages do not increase by 48.4% in three years, so we can see why affordability is a problem. The gap between rising home prices and wages keeps getting wider.
- The housing market is shifting, and New Mexico housing market predictions for the short term seem to be going down along with many areas of the US. Due to New Mexico’s significant price growth, some of the state’s metro areas are predicted to drop in home values.
The next 18 to 24 months will be an adjustment, especially for home sellers and Real Estate professionals. Adjusting to a normalized market that is not heavily skewed in favor of sellers will take time.
- Real Estate markets are highly local and even within the same state, there will be areas that are projected to be hit hard by the market shift and others will fare better.
- Timing the market for buying or selling is a big gamble. If it makes sense for you to buy, go ahead and buy a home. For sellers, if you have to sell in the next 12-24 months, you may want to consider doing it sooner than later, especially if you are in an area that may be considered overvalued and has a high potential for house prices to drop.