Home values are going up in Albuquerque. For homeowners who already live here, it’s a welcome boon to their net worth. For those moving to ABQ, it can mean paying a higher price for your home. While property value trends to rise over time, the home values in Albuquerque have seen tremendous growth over the past few years. It’s important to understand why. In this article, we’ll explore five of the most important factors driving higher home values.
- A look at Albuquerque home values
- Supply, demand and market forecasts
- Jobs growth and population increase
- Lower cost of borrowing
- ABQ is a booming metropolitan area
- A more modern housing market
It’s important to note that there are many other variables that affect home value. We’re looking at five of the biggest and most relevant to the rising home values in Albuquerque. These variables are the result of changing markets, urbanization, socioeconomic advancements and more. Here’s what you need to know about why home values are going up in Albuquerque.
A look at Albuquerque home values
Before we dive into rising Albuquerque home values, it’s important to provide some context. How much have Albuquerque home values increased in recent years?
According to census and MLS data, there’s been strong appreciation in almost every ABQ Metro neighborhood and adjacent suburbs. Right now, the median home value in Albuquerque is $256,000 (Nov. 2020). This value is up more than 66% since 2000 and up about 14% since last year (2019).
Home values are going up in Albuquerque at a rate that’s higher than the national average of 3.8% appreciation annually. Additionally, about 20% of Albuquerque homes now fall into a mean price range of $200,000-$250,000, showing strong housing market stability.
What’s fueling these numbers? Take a look at five of the biggest drivers of rising home values in Albuquerque.
1. Supply, demand and market forecasts
Supply and demand are two of the biggest factors that swing home values. If there’s lots of available housing stock and few buyers, it’s a buyer’s market. Housing values tend to fall, since there’s more supply than there is demand. Conversely, if there are many buyers and few homes for sale, demand drives up home values.
Right now, in the ABQ metro area, it’s a seller’s market—meaning there’s more demand than supply. Because the market is subject to demand, home values are climbing since people are willing to pay more to own a home here. It’s a trend that’s expected to continue according to national housing market forecasts for 2021.
2. Jobs growth and population increase
Home values are contingent on people’s willingness to buy a home and live there. The ABQ Metro area is definitely a place people want to live! Albuquerque has seen population growth and rising employment numbers over the last several years, which are cornerstones of why home values are going up in Albuquerque.
Right now, Albuquerque is in the top 40 most populous cities in the United States, home to more than 560,000 people. Roughly half of the people who live in ABQ are also employed here (+271,300), which is slightly lower than the national average, yet still healthy according to the Bureau of Labor and Statistics. These stats combined tell us a few things about Albuquerque home values:
- People are moving here because there are employment opportunities.
- The cost of living in ABQ is reasonable compared to employment.
- Growing population means increased demand for homes.
It all adds up to rising home values in Albuquerque and the surrounding suburbs, such as Rio Rancho, Corrales, Los Lunas and others.
3. Lower cost of borrowing
The Fed’s historic low interest rates and extremely low mortgage rates have made it easy for people to borrow money—and for them to borrow more money than they otherwise would’ve. As a result, home values are rising in Albuquerque.
Think of it like this. When interest rates drop, your borrowing power increases. Instead of getting preapproved for a $200,000 loan, you might now have borrowing power up to $250,000. You find a home that’s priced at $225,000—already above what you would’ve originally paid. Now, there’s competition for the home, which means your winning bid might push it to $245,000. This sale wouldn’t be possible without the low interest rates that grant higher borrowing.
This trend isn’t specific to Albuquerque by any means, but it’s nonetheless one of the factors causing home values in Albuquerque to rise.
4. ABQ is a booming metropolitan area
Urbanization is a trend that’s been on the rise in Albuquerque since the 1940s. People have begun moving back to cities because that’s where they work. It’s where their friends live. It’s where the entertainment is. As a result, the most expensive properties usually exist at the city center, or in districts with more accessible amenities. But as urbanization rises, city sprawls grow to accommodate a growing population.
This is what’s happening to ABQ. Today, you’ve got a growing city rich with culture. Visit Old Town, founded in 1706! Check out the cuisine in Barelas and South Valley. See what all the buzz is about in Nob Hill or visit the iconic Balloon Fiesta Park. Albuquerque has personality, diversity and all the attractions you’d expect to find in a big city. As a result, it’s enticing more and more people to move here, driving up home prices as demand for urban-adjacent homes rises.
5. A more modern housing market
The age of a home and of the housing market have significant impact on the value of property. For example, a home built in the 1950s may not be worth as much as one built in 2010, purely based on its age. Newer homes tend to have more modern amenities and building materials, and they’re built with modern living in mind. Older homes may need updates, retrofits and improvements to meet modern living standards. Electrical is a great example of this. Would you rather buy a home that still has cloth-bound wiring or one that’s up-to-code with Romex™ wiring?
Older homes can cost more to maintain, whereas there’s an expectation that newer homes will require less upkeep from big-ticket items like roofing, HVAC and electrical. As a result, the value of the home tends to be higher the newer it is—against comparable older homes, of course. ABQ has a bounty of newer housing stock to support people moving to the city, which means homes in the area tend to see higher valuation.
Rising home values in Albuquerque are a good thing!
For homeowners and prospective buyers alike, rising home values are a good sign. They signal positive trends for the community and Albuquerque itself. They’re a good signal that Albuquerque is a great place to buy a home, and will be for years to come.
Ready to start looking? Myers & Myers Real Estate Inc. can help you find a great home at the right price—one you’ll watch appreciate for years and years to come. Contact us today to get the search started!
Check out homes for sale in Albuquerque, homes for sale in Rio Rancho, homes for sale in Corrales, homes for sale in East Mountains, homes for sale in Valencia County, and homes for sale in Los Lunas. Call us if you are looking to puchase a new house. Also you can call to see how we position your home to sell at the best possible price.