Already seeing higher median home prices stemming from COVID-19 and the limited supply of building materials, a couple Albuquerque metro area home-sales experts aren’t forecasting any significant price drop-off entering winter.
The average sale prices on detached single-family homes in Rio Rancho for August and September were about $321,000 and $322,000, respectively, according to Rio Rancho Realtor Matt DeAveiro.
John Garcia, executive vice president of the Home Builders Association of Central New Mexico, said the median home prices in Rio Rancho he’s seen over the last month are around $300,000, adding that number is comparable to Albuquerque.
“The market is driven by supply and demand. Right now, the supply is very low because of things related to COVID, getting supplies and things like that to build houses,” Garcia said. “It’s a little bit of a crunch on the market right now; demand is super strong.”
He said the demand’s still steady because of the overall home value compared to other cities in the western United States.
As of the final week of October, Garcia said there was less than a month’s supply of homes on the market.
The same week, DeAveiro said there were around 1,100 homes on the market between Albuquerque and Rio Rancho. He also said prices on new homes are higher compared to re-sale home prices because of building-material costs.
DeAveiro estimates the price per square foot on new homes is around $180-$200, while the square-foot price for resale homes ranges from $145-$168.
“Inflation’s kicking up now. Lumber prices went really sky high… and the next problem (is) we have a shortage of workers,” he said. “I don’t see (material costs) going down due to shipping and what-not, unless they get the supply chain and truckers back. That’s causing more issues economically.”
Garcia said materials like lumber are attainable but are still expensive.
He said such supplies are starting to come in, which should give builders extra time to catch up with getting more lots to help ensure continued demand is met. However, he also said home prices won’t start decreasing and stabilizing until inventory begins catching up.
Garcia said the outlook suggests demand won’t slow down significantly at this time.
“I think we’re still in it for a while,” he said.