New Mexico’s Housing Market – Finally Stable
There may not have been a state hit harder by the Great Recession than New Mexico. Even before the U.S. economy went bust, New Mexico’s state economy was struggling. Historically, New Mexico has the biggest gap between the rich and the poor. And, as of the beginning of 2013, New Mexico’s biggest city – Albuquerque – was still officially in a recession.
So, what’s the problem here? And, more importantly, can New Mexico’s housing market get on track anytime soon?
Realtors in New Mexico will tell you that you can’t have a healthy housing market without a healthy jobs market. And, unfortunately, New Mexico’s unemployment picture isn’t the brightest one. Add to it the fact that New Mexico spent much of 2012 dealing with a massive drought – which gutted the tourism industry – and you have a state that has flat employment, with a chance of employment going over a steep cliff.
Speaking of cliffs, even though Congress avoided going over the fiscal cliff, if there are major cuts to the federal budget, it will have a big effect on New Mexico’s economy. That’s because this state receives more federal money than its residents pay in taxes. As a result, there isn’t a ton of money for people to spend on homes for sale here!
Because the demand for home ownership isn’t very high in much of the state, the number of permits being applied for isn’t high, either. In fact, in November of 2012, the number of permit applications in Albuquerque was half of what it was in March of 2012. So, the people who do want to buy here won’t have much new construction to choose from.
However, it looks like most of the new homes for sale in New Mexico’s biggest city will be on one side of town. Nearly 40% of the permits issued were in the Northwest Quadrant.
What about other cities?
Las Cruces actually saw more permit applications in 2012 than it did in 2011.
The good thing about selling in Las Cruces for the foreseeable future?
The inventory is very low, and realtors think it will stay that way for awhile. So, with fewer homes to choose from, buyers are having to pay slightly higher prices. Even though the average homes for sale in Las Cruces sell for less than $150,000, there are a number of buyers shopping in that range!
So, what’s the bottom line?
Realtors in New Mexico are busy focusing on the positives – like low sales prices and low mortgage rates. While the market isn’t nearly as healthy as anyone would like it, prices seem to have stabilized – which has people here smiling.