Home prices up, supply down in metro Albuquerque
While the COVID-19 pandemic has hammered other areas of the Albuquerque, N.M., economy, it's becoming clear that it hasn't stopped residential real estate momentum.
The Greater Albuquerque Association of Realtors released its market report on housing data for the second quarter of 2020 earlier this week, showing that the median sale price for a detached single-family home in metro Albuquerque stood at $236,000 in the quarter, nearly 5% higher than it was during the second quarter of 2019.
"It is just crazy out here," said Sherry Fowler, board president for the Realtors association. "There are so many buyers still looking for homes."
The report also suggests that the pandemic may have exaggerated market trends that were already in existence.
There were also significantly fewer homes on the market for prospective buyers, which Fowler said has helped keep prices high. The report showed that the total number of sales in the second quarter of the year dropped 14.5%, and the number of new listings dropped by more than 18%.
GAAR CEO Kent Cravens said the spread of the virus may have prompted some buyers and sellers to reconsider for the time being, but the larger problem is a supply shortage that has been present in Albuquerque since well before the pandemic reached the city.
"The market is just a bit out of balance," Cravens said. "If we had more, we'd be selling more."
Home prices have been rising in metro Albuquerque for years, driven by low interest rates and declining inventory.
Fowler said this has created an environment where potential sellers might be reluctant to sell their current house, particularly during a pandemic, given the lack of options on the market.
"People have no place to go," Fowler said.
Consequently, there has been more interest than ever in the handful of homes that have come on the market. Home spent an average of just 29 days on the market in the second quarter of 2020, down from 36 days during the same period in 2019. Fowler said there was a particular house that had 23 offers before it sold.
"It's definitely a feeding frenzy out there," she said.
Cravens added that the Realtors' association has seen more interest from out-of-state buyers as well, who may have made plans to move to Albuquerque prior to the pandemic, and were left needing to find housing quickly.
In the meantime, Fowler said the tight real estate market isn't likely to disappear anytime soon. While new houses are still being built, particularly on Albuquerque's West Side, Fowler said the homes are on the high end of the market, and will likely be too expensive for most first-time homebuyers.
"I don't foresee it stabilizing any time soon," Fowler said.