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By almost every metric available, 2021 was a record-setting year for metro Albuquerque’s real estate market.
According to the Greater Albuquerque Association of Realtors’ annual home price report for 2021, which was published Friday, the median sale price for a single-family detached home in metro Albuquerque increased by 17.2% last year, reaching a record $290,000. The mean, or average, sale price also increased by 17.5%, the largest single-year jump since at least 1985, according to the report.
The growth was matched by a record-high price per square foot and dollar volume, along with a record-low number of homes available on the market, said local real estate agent Tego Venturi.
“Just about every record that could be broken was broken,” Venturi said.
Overall, Albuquerque has seen meteoric home price growth over the last couple of years, with the median home price increasing nearly 30% since 2019, according to data from the association. Real estate experts have long attributed the growth to a chronic shortage of homes on the market and demand fueled by low interest rates.
Looking ahead
A number of experts, including the National Association of Realtors, expect rates to rise in 2022, as the Federal Reserve takes steps to curtail inflation. If interest rates increase but the inventory of homes stays low, GAAR board president Bridget Gilbert said she expects buying a house to get more challenging for first-time home-buyers over the next 12 months, even if price appreciation slows.
“The big picture I see is home affordability is really going to get much worse for those first-time homebuyers,” Gilbert said.
Despite high demand from first-time and step-up buyers, the number of sales hardly changed from 2020. According to the report, 13,521 single-family homes were sold in 2021, compared to 13,488 the year before. Gilbert said the very low supply of homes helped keep the number of sales relatively flat.
“We’re just kind of behind on the number of homes we would normally see on the market,” Venturi added.
Gilbert said the shortage of homes is creating a “Catch-22” for some sellers: the supply of homes on the market is so limited that they’re afraid to list their homes for fear of not being able to find another, thus contributing to the limited supply.
‘No Inventory’
“If I sell my house, where do I go?” Gilbert said. “There’s no inventory.”
That lack of inventory led to price increases in nearly every sub-market in Albuquerque. Gilbert said home price growth in high-end areas like Sandia Heights and North Albuquerque Acres was particularly brisk.
“It shows that our luxury market is very, very healthy,” she said.
One upshot to the higher prices is increased demand for single-family attached homes, including condominiums and townhouses. The median sale price increased 20%, and the number of attached homes sold increased by 4.5% despite the tight market. Gilbert said these homes tend to be smaller and less expensive than single-family detached homes.
“People are willing to scale down just a little bit,” Gilbert said.
Despite the higher prices, Venturi said he doesn’t believe the market is overheated. He pointed to similar price increases in other Sunbelt markets, and the fact that the home purchases are largely not coming from speculators.
“People who are buying are the people who are living in the houses,” Venturi said.
