The Paper's business coverage is supported by Southwest Capital Bank.
It’s no secret that the housing market in Albuquerque has been nothing short of cutthroat this last year. Demand for homes in the Albuquerque metropolitan area has skyrocketed since the beginning of the pandemic. A hyper-competitive housing market is not just limited to Albuquerque. Medium and small-sized cities around the U.S. are experiencing similar trends to their markets as people attempt to escape less-than-desirable living conditions in overcrowded metropolises on the coast. Albuquerque’s affordable housing and abundance of recreational opportunities have attracted buyers from all over the country.
Nob Hill has especially felt the surge in demand for real estate. The Nob Hill housing market encompasses portions of the zip codes 87106, 87108, 87110; and aside from new apartment housing close to Central Ave., there’s not a whole of new homes being built. “There are simply more buyers than houses on the market,” Greater Albuquerque Association of Realtors President Belinda Franco said about the state of the market in one of Albuquerque’s most sought-after neighborhoods.
So what makes Nob Hill such a high-demand place to lay your head? Its proximity to restaurants, retail, bars and walkability have created a hub of activity in the heart of the city. It’s also close to the university, which creates a demand for housing for those who want to live close to their work. Several of Nob Hill’s neighborhoods, such as the Monte Vista and College View subdivisions are listed on the National Register of Historic Places.
According to the latest figures from the real estate database, MLS, the average home value in Nob Hill has increased 13.3 percent from 2020 to an estimated $345,000. Like other markets similar in size to Albuquerque, the increase in home values has been driven by a shortage of houses available compared to the rise in demand. However, the recent boom in the market is unique due to its sheer competitiveness. The average selling price in Nob Hill for a 3-bedroom home in June so far is over $380,000. The market has virtually transformed into an all-out bidding war, with the average number of days for a home on the market at only three days.
When asked about the out-of-state buyers, Franco said that many buyers from California and other areas with competitive real estate markets have an advantage over New Mexico residents due to their properties being sold at much higher prices. “We’re seeing a lot more multiple offers and cash offers,” she said. Demand for Albuquerque’s relatively inexpensive housing market is not helping in-state buyers either, as a sale of their property cannot compete with those that are selling in more competitive markets.
How the Albuquerque Market Compares
According to GAAR, the price for a single-family home in Albuquerque has increased 26.3 percent from May 2020 to May 2021. At the beginning of the pandemic, the price of a single-family 3-bedroom home was $290,000 compared to $333,448 from the most recent figures taken in May 2021. Franco believes that the pandemic pushed many people to reconsider what they want and need in a home. The pandemic has also forced more people to work from home, and many, especially those with families, have seen a need to move into a bigger space with a home office. “People have re-evaluated how they’re living,” Franco said.
The busy market has also dramatically cut down the amount of time that a property is listed. According to GAAR, “Single-family homes sold on average in 13 days, 43.5 percent faster when compared to May 2020.” As a result, not only are Albuquerque residents facing competition from out-of-state buyers, but the search to find a property that fits the needs of a buyer has become substantially more difficult.
Franco predicts that demand for Albuquerque real estate will likely continue well into 2021. Noting past trends she expects that the traditional seasons to sell a house, spring and summer, will ensure that the market stays busy. Sellers are eager to list their properties, especially because of the record demand of the market, she noted in an interview.
Although a pain when looking to buy a house, the boom in the housing market is also a boom for other industries in the city. “For every house sold in Albuquerque, it pumps money back into our local economy to the tune of $72,000,” Franco said. The demand for houses translates to a demand for services such as construction, cement and a handful of other related industries. Motivations for buyers to move in the first place are the same motivations that pump money and investment back into the community. The pandemic has inspired many buyers to mold their living space to fit their needs, which translates to an increase in demand for services across other industries.
Nationally, soaring housing prices have begged the question about whether or not the housing market is on a course to repeat the infamous housing bubble that contributed to the Great Recession in 2007. Similar to other experts around the country, Franco is confident that this is not a bubble. “This feels very different. This does not feel like the housing bubble before,” she said. She noted that the factors driving demand are different than those in the early 2000s. Record low mortgage rates and a generation of millennials reaching prime house-buying age have been the primary drivers of the nationwide boom.
GAAR predicts that Albuquerque’s hyper-competitive housing market will likely last well into 2022 and should not sound any alarms of a housing bubble. Franco believes there’s still a lot of competition and room for growth in the city.
Nob Hill at a Glance:
- Average rent: $1244 (*weichert realty)
- Average home price: $345,000 (*mls)
- Average income: $51,867 (*weichert realty)
- Economic drivers: Education, retail, food & beverage
- Transit score: 47 (*WALKSCORE.COM)
- Walkability score: 82 (*WALKSCORE.COM)
- Jobs nearby: UNM/CNM, government, retail, food & beverage