New Mexico Real Estate Market: What to Expect in 2024 and 2025?

✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

The current median home sale price of $373,300 is stable and rising steadily at 8.7% YoY. Moreover, homes spend only 42 days on the market. This indicates that the New Mexico real estate market is pretty much competitive.

The average months of home supply are 4 months YoY. A market with fewer months of supply indicates a seller’s market. However, in July, the number of homes sold dropped by 8.3% year-over-year. In July 2024, 839 homes were sold, down from 918 homes in July 2023.

Such inactivity in the market is mainly due to the recent NAR settlement. People are anxious about the selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation and many MLSs have followed suit. It will probably reduce the home selling prices. As a result, buyers will enjoy better affordability and low mortgage rates. Here are some tips to help you stay competitive in the market:

• If You Are a Home Buyer: The number of homes for sale (4,191) is up by 6.5%. Combined with the expected drop in home prices, this could benefit you. The low mortgage interest rates at 5.95% are now in buyers’ favor. If housing demand and prices drop, you can also request seller concessions.
• If You Are a Home Seller: The correction in the home prices is long overdue. Following the NAR settlement, home prices may dip further. As a seller, you can still profit from your home sale before prices decline.

So, How Is the Real Estate Market in New Mexico?

Balanced!

The number of homes for sale increased by 6.5% in July 2024 compared to the previous year. This is the 3rd consecutive month the housing market has witnessed such growth. Other important facts are:

• Median Days on Market: The median days on the market for homes for sale are 42 days, up by 13 days YoY. This trend suggests a high demand in the New Mexico real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 6.5%. There are 4,191 homes for sale in New Mexico, with an average supply of 4 months.
• Average Home Prices: The median home price in New Mexico is $373,300. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 96.4%, down by 3.8 pt YoY.
• Home Sales: As per July 2024 data, home sales decreased by 8.3% YoY! Only 839 homes were sold, compared to 918 last year.
• Average Rent Prices: Rental costs vary statewide. The median rent is $1,750 with a month-over-month change is -$10.

Why Is New Mexico a Seller’s Market Now?

New Mexico’s real estate market has a balanced inventory of homes for sale. Besides this, a steady increase in median home prices favors home sellers. Homes spend only 42 days on the market which depicts the competitive market.

Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending only 42 days on the market before going under contract. This is visible in metro cities like White Rock and Rio Rancho where the average days on the market is between 7 to 35 days.
• Multiple Offers on Homes: White Rock got 97 in Redfin’s Compete Score. It means the housing market in New York is very competitive. Many homes get multiple offers, some are even sold without contingencies.
• High Sale-To-List Price: Homes often sell for 5% above the list price and go pending in 8 days. Hot homes sell for 11% above the list price and go pending in 7 days. The average sale-to-list price ratio in White Rock is 102.6%.

• Homes Sell Above List Price: On average, 6.7% of homes sell above list prices. This trend indicates a gradual shift toward a buyer’s market.

New Mexico Housing Market Predictions 2024

Here are the predictions for New Mexico’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market. The historically high interest rates averted buyers in 2023. But the easing inflation and stabilizing rates will bring back house hunters.
2. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across NM YoY, reaching $373K in July 2024. Cities like Rio Rancho and Northern Meadows expect home prices to increase by 4.7% and 4.5% by July 31, 2024.
3. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.
4. New Home Constructions Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for home shoppers in 2024.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

When Will the Housing Market Crash in New Mexico?

A housing market crash in the Land of Enchantment is unlikely.

New Mexico’s cost of living is 5% lower than the national average. Cities like Rosewell and Clovis offer several budget-friendly options. Rosewell’s cost of living is 13% lower than the state average. NM has the 5th highest median household income of $53,992.

New Mexico now has a record 869,400 jobs, and its unemployment rate is 3.5%. It is lower than the national average. This steady job growth, combined with the lower cost of living, continues to draw homebuyers to the Land of Enchantment.

2024: Is It a Buyer’s or Seller’s Market Now?

New Mexico real estate market favors sellers in 2024. (And buyers, too!). The New Mexico real estate market is expected to lean more in favor of the buyers in the latter half of 2024.

Home prices are rising slowly, and the number of homes for sale has increased by 6.5% YoY. Buyers now have more choices. With mortgage rates around 5.95%, buyers also have more purchasing power.

Consequently, more homeowners are likely to list their homes on New Mexico MLS. So, whether you are looking for a condo in White Rock or a single-family primary home in Rio Rancho, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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