The Albuquerque Housing Bubble
From 1993 to 2004, housing in the Greater Albuquerque market area experienced stable price appreciation at an average annual rate of 3.5%. Beginning in 2005, prices began to inflate well in excess
of the historic price trend with an average annual price increase of nearly 11.5% from 2004 to 2007 (price increases were in excess of 12.5% in 2005 and 2006).
These rapid price increases continued into late summer of 2006 when the first signs of a market correction appeared; although prices continued to increase into 2007, the rate of increase had slowed. Prices began their decline in 2008 with the decline continuing unabated, although the rate of decline has slowed; the 2011 median price of $160,000 is down 16.9% from the 2007 median price peak of $192,500.
Metro Area Listing Inventory
On April 2, 2012 the metro area listing inventory reported by the Multiple Listing Service was 4,885 compared to 4,501 listing on January 2, 2012 and 5,932 listings on June 1, 2011. The on going question is whether the inventory decline is the sign of health that is appears to be? The lower 
number of listings is not because of an increase in sales which have remained tepid at an average of 443 homes a month; this begs the question:"where are all the sellers"? Answer: they are exhausted - fearful of discounts too steep, or with too little equity for a down payment, which means fewer owners both wanting to move and with equity to roll. Some have become reluctant landlords, others have simply retreated to the sidelines hoping to wait out the storm; all translate into fewer and fewer listings.
Albuquerque Median Price and sales Volume Trend January 2004 through March 2012
As the housing bubble inflated, the median Albuquerque price increased sharply from 2004, cresting in July 2007 at $208,000, before beginning to decline as the market began a price correction.
The March 2012 median price of $155,000 is down 25.5% from the apex of the housing bubble roughly the spring of 2005.
The number of sales peaked in June 2005 when 1,058 sales were reported and "bottomed" in January of 2009 with a monthly total of just 265 sales. 470 sales were reported in March 2012. The number of sales has been fairly stable since the summer of 2009.
Albuquerque Monthly Median Price and Sales Volume Trend Over the Last 15 Months.
Over the past 15-months the monthly median price has been in general decline. The median price has been falling at a rate of $20.00 per day over the last 15-month period.
The March 2012 median price of $155,000 was down 3.2% from February's median price of $160,000 and year-over-year, the March 2012 median price was down 3.2% from the March 2011 median price of $160,000. The March median price was the lowest since April 2005 at $152,500.
The 470 sales reported in March 2012 were up from February's 391 sales and up slightly from the 461 sales reported for March 2011.
There is little in the "hard numbers" to suggest a recovery. At best, the Albuquerque market can be characterized as moving sideways or, at least, the worst of the bleeding has stopped.
Supply Analysis
As of April 2, 2012 the MLS reported 3,692 listings in the City of Albuquerque. In the past 12 months there were 5,320 sales. At the current sales velocity, with 443 sales per month, the standing inventory represents a 8.3 month supply. It is also likely that there is a "hidden" inventory of owners who are waiting on the sidelines for market conditions to improve as well as a "shadow" inventory of bank foreclosures, "underwater" sellers, and homes that are somewhere in the foreclosure process but are not yet on the market.
A residential market is generally considered "in balance" with a six month supply of houses for sale; a more than six month inventory suggests an oversupply.
The continuing gap between seller expectations and market realities is reflected in the $189,750 median price for the active listings, the $159,000 median list price for the pending sales, and the $163,000 median price for sale that closed in the past 12 months. the standoff continues - sellers still want prices that were available 3 or 4 years ago and buyers, who don't want to look stupid, are waiting for prices to fall further. The listing overhang can be expected to extend the downturn with the inescapable conclusion that prices will continue to decline.
Albuquerque Westside Hot Pick
2602 Sq. Ft. 4 Bedrooms 3 Baths 2/Car Finished Garage .jpg)
