Home Value Trends in New Mexico

If you haven’t been living under a rock for the past 12 months, you’ve probably heard all the doom and gloom predictions about the housing bubble bursting, home value averages slumping and the real estate market taking a big hit. Guess what? They’ve a bit over-exaggerated. Looking at the real estate market nationally, it is very true that it’s definitely over the boom of the past few years, however, most areas are still fairing well.

When you’re considering buying or selling a home, the national median home value isn’t going to do you much good (but if you’re curious, it’s at about $221,900). Real estate is an investment, so it is important to move somewhere your home value is sure to appreciate. The best way to see where home value prices are going in a given area is to examine past home value and sales trends, the economy, population, job opportunities, unemployment rates and attraction of that area.

New Mexico (capital city: Santa Fe) is one area that has seen quite a bit of appreciation in some areas. With a large and diverse population of about 1,954,599, New Mexico uses it’s diverse economy to keep job growth and opportunities growing, which is one major factor that can affect home value prices in an area. New Mexico relies on cattle, dairy products, hay, nursery stock and chilies as it’s main agricultural contributions. On the industrial side, New Mexico’s major sectors include electric equipment, petroleum and coal production, food processing, printing and publishing, stone, glass and clay products and of course, tourism.

With such a rich and diverse history and culture, it’s no wonder New Mexico has a big tourism sector. The strong job base and attractions to out of state visitors is one thing that has kept most of the New Mexican real estate market and home value prices steady. With several major cities (Santa Fe, Albuquerque and Las Cruces) New Mexico has plenty of opportunities for the nightlife lover, not to mention that Santa Fe is the 3rd largest art market in the United States! But it is the ancient cultures, world famous cuisines and diverse and varied landscapes that really keep people coming to New Mexico.

With over 30 state parks and varied landscapes (snowy mountains, green forests, blue lakes and white deserts) New Mexico has plenty of outdoor adventures, including camping, hiking, water sports, winter sports, cave explorations, etc. Some major historical and educational sites include the Billy the Kid Museum, Roswell and the International UFO Museum, the Space Museum, and Chaco Canyon National Historic Park – the major urban trading and cultural center of ancestral Puebloan culture. With so many different climates in one state, it’s no wonder New Mexico has so much to offer – not only do people visit, the sites make them want to relocate, therefore providing the state with a steady flow of new residents and therefore stable home value prices.

New Mexico’s unemployment rate reached a historical low of 3.5{db3ae8a81280553779663c6dc431a922c9e5ce920863bf636bccd15cfbaaca0d} in February and is now at about 3.7{db3ae8a81280553779663c6dc431a922c9e5ce920863bf636bccd15cfbaaca0d}. This low unemployment rate means job opportunities are plentiful. The median household income in New Mexico in 2005 was about $39,936 – much lower than the national value. On the flip side, the median home value in the Santa Fe area is at about $350,000, while the Albuquerque area was at about $285,000 in 2006. This means that while home value averages seem to being staying pretty high in New Mexico, the household income is low enough that it makes it more difficult to afford a home in the state.

Most real estate agents agree that since New Mexico did not experience as major a boom as other areas of the nation, they did not experience as much of a bursting of the housing bubble. The uniqueness of the area keeps home value averages high, and the first quarter of 2007 saw many higher priced homes sell – so that the median home value in the beginning of 2007 was almost $520,000. Housing under that price has been moving fast.

In Albuquerque the median home value of single family homes is about $199,000, while median home value of condos are at about $145,000. Housing is affordable, and with a large inventory, now is a good time to buy into the area. Agents in the area expect activity to increase in summer months, though interest rates are rising.

All in all, while New Mexico has some fairly expensive areas (Santa Fe) there is still affordable housing to be found, and not in such high demand that sellers can set any price they want. Home value averages continue to appreciate at a good rate overall, and as more housing and jobs become available, New Mexico is likely to see a decent rise not only in home value, but in new residents as well over the next few months.

Pungky Dwiasmoro Hiswardhani

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