A year of ‘stabilization’: 2024 report shows modest increases in closed sales, inventory in ABQ metro

Last year was a year of “stabilization and almost normalcy” for the Albuquerque metro real estate market, local Realtor Tego Venturi said.

A new report from the Greater Albuquerque Association of Realtors, or GAAR, outlines modest increases in closed sales and inventory from a year prior — shifts that come amid elevated mortgage rates over the past two years, and as the city continues to struggle with a low number of available homes.

The report points to continued price increases — which have kept some buyers out of the market — but also expresses signs of optimism heading into the new year, a sentiment shared by some local real estate experts.

“Supply and demand is always about the ratio,” said Venturi, past president of the Southwest Multiple Listing Service, a database used by local Realtors. “We definitely have more homes available, more choices for buyers. But it’s still constrained, and we still have a shortage.”

While supply remains below expectations, buyers did notice signs of improved inventory last year. GAAR data showed a 14% increase from 2023, the highest level since 2020. Inventory in 2021 was below 800 on average, according to the data, and 2020 had about 1,100 homes on the market at any given time.

That number picked up in 2022 and 2023, spiking above 1,400. But experts say a healthy market has somewhere between 3,000 and 4,000 homes for sale. Last year’s 1,628 average — an increase of close to 200 homes — is welcomed, said Christopher Shain Tanner, 2025 GAAR president and a local Realtor.

“We should all kind of celebrate that, in a sense,” Tanner said.

It’s possible that number could increase next year, with more people looking to reenter the market, Venturi added.

“Early signs already are that it’s going to grow from previous years,” Venturi said. “But there’s no impetus for some sort of big surge.”

Home sales, despite some reluctance to buy, also increased to 9,831 last year, GAAR data shows, a slight increase from 2023. But that’s far below the number of closed sales during 2020 and 2021 — when mortgage rates hit record lows — which saw a two-year average between 14,600 and 15,100.

When rates climbed in the years after, fewer people pulled the trigger. The number of closed sales dropped by more than 2,000 between 2022 and 2023, data shows, and only last year did that number increase ever so slightly.

“There was a lot of speculation that interest rates would drop through 2024, which didn’t happen,” Venturi said.

But there’s also a case to be made that part of the increase in closings last year was buyers being “unfazed” by interest rates, said Vincent Smith, a mortgage loan originator with Nusenda Credit Union.

“I think you’re going to continue to see some movement, regardless of whether it’s job relocation or moving for school districts,” he said.

Home prices last year continued on a steady rise — increasing 4% last year to a median of $350,000 — largely due to the still-limited inventory available to buyers. The median sales price in 2020 was $240,000 and it jumped to $320,000 by 2022.

Albuquerque buyers on average have lower household incomes than those in surrounding states, forcing them to look for the best deal possible, Tanner said.

That shows up in how long homes have managed to stay on the market.

Homes between $200,000 and $274,999 averaged 22 days on the market last year, according to GAAR data, while homes from $275,000 to $378,999 averaged a month. Homes above $379,000 averaged 43 days or more.

“The pool of fish looking for that type of home is enormous,” Tanner said. “The average income of our state is much closer to that, ‘Hey, I’m comfortable affording a mortgage at that $200,000 to $300,000 price point versus those higher price points.’”

The GAAR report also highlighted a shift in buyer preferences, including the affordability and increasing supply of new homes outside the city in places like Los Lunas and Rio Rancho.

Tanner said he’s noticed the price per square foot for resale homes — a term used to describe homes that aren’t new — has inched closer to those newly constructed.

“New homes can only be built generally on the peripheries of town because everything — at least larger communities — else has been taken up at this point regarding building sites,” Tanner said. “But some people are OK with that.”

Smith said more people may reenter — or enter for the first time — the market in 2025. He suggested there could be some slight decreases in rates.

And he may be right. Over the last three weeks, for example, the 30-year fixed mortgage rate — the standard measurement for economists — has steadily decreased, according to the mortgage finance company Freddie Mac. That rate, just under 7%, reached its lowest point this year.

“I don’t think that a lot of people moving forward and heading into 2025 are going to be as worried about interest rates,” Smith said.

Potentially lower rates and more inventory could bode well for buyers.

“I would say 2025 (will offer) you way more options than we’ve seen since 2019, so you’ve got more choices,” Venturi said. “A lot more new construction homes than we’ve seen in a long time and obviously a lot more resale homes compared to the pandemic years, for sure.”

Sellers should be ready as well.

“If you’re a seller, it’s always about having (your property) in good condition — clean, looking good, show ready,” Venturi said. “Those little things as a seller make a huge difference in attracting buyers.”

Matthew Narvaiz covers the economy for the Albuquerque Journal. You can reach him at mnarvaiz@abqjournal.com.