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Summary of Residential Real Estate Market in Las Cruces, New Mexico
Las Cruces has been fortunate over many years to have a steady growth rate of its population, its economy, and its housing market of 2-3% year after year. Since 2000, with uncertainty in the national economy and the stock and bond markets and with low interest rates, there has been unprecidented refinancing of real estate, and investors are shifting funds from stocks and bonds into the housing market. In Las Cruces an average home in 1999 sold for $116,054, while in 2004 the average home sold for $167,484 an increase of 44%. The median price of a home went from $102,000 in 1999 to $146,000 in 2004 an increase of 43%. Only 10 states report increases of this magnitude, and we are well above the New Mexico 5 year average of only 27.7% Las Cruces' one year increase in the Median Price of 14.6% also is in the top 10 for the 50 states and again well above the New Mexico average of 8%.
|TOTAL $ SOLD
Even though this is considered to be a speculative market with the high number of investors buying up residential real estate (approximately 25% of sales can be attributed to investors), the opinion of most experts is, if you are in the market to buy a new home, do not wait for a bubble to burst or prices to decline. Waiting has a higher risk of interest rates rising and prices continuing to climb even if they climb more slowly than the last 3 years. Since the first of the year (Jan 1, 2005 ending April 30, 2005) Las Cruces average home prices have continued to rise another 7% to $179,876.
In 2000, 61% of the homes sold for under $120,000 and only 10% sold for over $160,000. By 2002, 52% of the homes sold for less than $120,000, and now 24% of homes sold for over $160,000 (2.5 times more in just 2 years). By 2004 the shift in home prices becomes dramatically evident. First I want to say that the middle of the market remains constant troughout these 5 years with about 19-23% of home selling in the $120-$160,000 range keeping our overage and median price range in this area. It is the high end of the market that has truly emerged. Now (2004), only 1/3 of the homes can be found for under $120,000, while 43% are over $160,000 (4 times greater than the number sold in the 2000 market). Even more significant is the fact that the homes selling for over $250,000 have tripled from 5% in 2000 to 15% in 2004.
This idyllic area, weather, economy, and small town atmosphere with larger metropolitan amenities has sparked an influx of new people to the area. We have seen retirees young and old, people who do their business out of their homes, people selling their homes elsewhere for the highest prices ever and coming here to buy a similar home for 1/2 the price. In light of this the developers are opening new areas for homes and selling out as fast as they can complete their development. This has brought about a change in the Real Estate Market that everyone, (home owners, home buyers, home sellers, investors, and realtors) need to be aware of