The following are my personal predictions for today’s trends in the Albuquerque sales for the residential market. Although, I am an industry expert, no one can predict with certainty what the future sales market will hold.
Affordability to Drive Albuquerque Sales
First, I believe the affordability of housing and the low cost-of-living in the area will drive housing growth. In return, these drivers along with a recovering economy, will bring an increase in people relocating to the Metro Area. A much needed trend for the Metro Area’s economic growth. Population growth has been stagnant in the Metro Area since the great recession of 2008.
Second, there is an emerging trend for an increase in first-time homebuyers to enter the real estate market. Many millennials are settling down with a life partner and having children. Despite the great recession, owning your own home is still an important part of the American dream. These millennials want a yard and a pet not another high-end apartment. As home buying declined in the past few years, single-family residential rents increased across much of the country, including New Mexico. In the Metro Market it is usually more affordable to buy than to rent. For this reason there has been an uptick in investors buying homes to rent out in the area.
Third, the metro real estate market is benefiting from the the wave of baby boomers reaching 66 every year for the next ten years. The word is out, the Albuquerque Metro Area is affordable and we have a very pleasant climate. The boomer’s children are well established and have family homes of their own. As an example, the Del Webb division of Pulte homes has recently opened up a new 55+ active community in a planned development, Mirehaven, of over 500 homes. This project is selling so quickly they are looking for another Del Webb location in the area. The majority of purchasers in these communities are coming from out of state. Great news for population growth. Locally the 55+ demographic are downsizing in record numbers. This demographic shift will create a large demand for housing in the smaller well-appointed homes.
Market for $750k Plus Homes Lagging
I saved the soft spot for last, the demand for homes over $750,000 has lagged for a long time and will continue to lag until some time next year. The metro continues to be in a 2008 post recession housing slump for expensive homes. As I see it, political uncertainty and the volatility of the stock markets have kept the upper-end homes from rebounding. High-end homes are going for much less than the cost basis of these homes. I believe this market will experience some relief starting in Spring of 2017 when the election dust clears. If you are in the market for a fabulous home in the Metro, now is the time to buy.