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Thinking about investing in Albuquerque real estate in 2025? You're on the right track.
Despite economic shifts, Albuquerque's property market shows promising stability and growth potential.
In this blog post, we will explore why investing in this city is a wise choice.
We rely on solid, up-to-date data and statistics from trusted sources to guide our analysis.
By the end, we will share our own conclusions based on a thorough examination of the facts. Enjoy the read!
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
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1) Albuquerque's "vacancy rate" of 6.0% shows a bustling and competitive market with most spaces filled
Signal strength: strong
The vacancy rate in Albuquerque is currently at 6.0%, which is considered very low. This low vacancy rate indicates that the market is highly occupied and competitive, suggesting strong demand for rental properties.
When demand is high, it often means that rental properties are quickly filled, reducing the risk of long vacancy periods for property owners. In Albuquerque, well-maintained single-family homes in areas like the Nob Hill neighborhood are particularly sought after by renters.
These types of properties tend to attract tenants due to their proximity to amenities and vibrant community atmosphere. As an investor, this means you are more likely to experience consistent rental income and potentially higher returns on your investment.
If the vacancy rate were to rise above 10%, it might indicate a less favorable market for property investment, as it could suggest an oversupply of rental properties.
Sources: NeighborhoodScout, DataUSA, USCensus
2) Albuquerque has a "livability score" of 72, indicating it's a pleasant place to live
Signal strength: moderate
The livability score of 72 in Albuquerque is considered good, indicating a favorable environment for residents.
This score reflects the city's affordable cost of living, which is lower than the national average, making it attractive for potential homeowners and investors. Additionally, Albuquerque boasts a vibrant cultural scene, with numerous festivals, art galleries, and a rich history that draws both tourists and new residents alike.
Moreover, the city is known for its pleasant climate, offering over 300 days of sunshine a year, which enhances the quality of life and attracts people seeking a sunny and warm place to live. These factors contribute to a stable demand for housing, making it a potentially lucrative market for real estate investment.
However, if the livability score were to drop below 60, it might indicate underlying issues that could deter investment, such as rising crime rates or declining public services.
Source: AreaVibes
3) The "I-25 Gibson Interchange Reconstruction Project" in Albuquerque, set to finish in 2026, is expected to boost real estate values by improving transportation
Signal strength: moderate
The I-25 Gibson Interchange Reconstruction Project in Albuquerque is a significant development that could positively impact real estate values in the area.
By improving transportation efficiency and safety, this project aims to reduce congestion and enhance accessibility for residents and commuters. This means that people will find it easier and quicker to travel to and from the area, making it a more attractive place to live and work.
Improved transportation infrastructure often leads to increased demand for properties in the surrounding areas. As accessibility improves, more people may be interested in moving to the area, which can drive up property values. Additionally, businesses may also be more inclined to set up shop in areas with better transportation links, further boosting the local economy and real estate market.
Investing in property near the I-25 Gibson Interchange could be a strategic move for those looking to capitalize on these potential increases in property values. As the project is set to be completed by Fall 2026, buying property now could allow investors to benefit from the anticipated rise in demand and value as the project's benefits become more apparent.
Sources: New Mexico Department of Transportation, New Mexico Legislative Finance Committee
4) Albuquerque's metro area is experiencing a growth of 1.26%
Signal strength: moderate
The metro area of Albuquerque is experiencing a growth rate of 1.26%, which can be seen as a positive indicator for property investment. This growth suggests an increasing demand for housing and infrastructure, as more people move into the area.
When a metro area grows, it often leads to a rise in property values due to heightened demand. As more individuals and families seek housing, the competition for available properties can drive up prices, making real estate a potentially lucrative investment.
Additionally, a growing population can stimulate economic development, attracting businesses and services to the area. This can enhance the quality of life and increase the desirability of living in the metro area, further boosting property values.
Investing in property in a growing metro area like Albuquerque can also offer rental income opportunities. As the population increases, so does the need for rental housing, providing a steady stream of potential tenants for property owners.
Sources: Neilsberg, Synergos Tech, Macrotrends
5) Airbnb or short-term rentals in Albuquerque offer a "moderately attractive" profit margin of 4.0%
Signal strength: moderate
The cash-on-cash return on Airbnb in Albuquerque is 4.0%, which indicates a moderate level of profitability for property investors.
This percentage suggests that the income generated from short-term rentals can cover a significant portion of the investment costs, making it an attractive option. Albuquerque attracts a diverse range of short-term tenants, including tourists visiting for its unique cultural events and business travelers attending conferences.
These visitors often seek accommodations that offer a local experience, which Airbnb properties can provide. Additionally, the city's proximity to natural attractions like the Sandia Mountains and the Rio Grande makes it a popular destination for outdoor enthusiasts.
If the cash-on-cash return were to drop below 2.0%, it might indicate that the investment is less favorable, as the income would not sufficiently cover the costs.
Source: Mashvisor
6) The "cash-on-cash return" of 4.0% for long-term rentals in Albuquerque is fairly appealing
Signal strength: moderate
The cash-on-cash return of 4.0% in Albuquerque indicates that the property is generating a decent return on the cash invested. This percentage is considered moderately attractive because it suggests that the investment is likely to yield a steady income stream.
In Albuquerque, long-term tenants often include students, military personnel, and healthcare professionals due to the presence of universities, military bases, and hospitals. These groups tend to seek stable housing options, which can lead to consistent rental income for property owners.
Additionally, Albuquerque's growing job market attracts young professionals who prefer renting over buying, further supporting the demand for rental properties. This demand can help maintain or even increase the property's value over time, making it a potentially lucrative investment.
If the cash-on-cash return were to drop below 2.0%, it might indicate that the investment is not as favorable, potentially leading to reconsideration of the property's profitability.
Source: Mashvisor
7) Albuquerque's median home price remains 24% lower than the national average
Signal strength: minimal
The fact that Albuquerque has a median home price 24% below the national average suggests that there is room for growth in property values. This means that investing in real estate here could potentially yield higher returns as the market catches up with the national trend.
In Albuquerque, the most expensive properties are likely to be luxury homes in areas like the North Valley, where the demand for upscale living is high. On the other hand, the cheapest properties might be small, older homes in neighborhoods such as the South Valley, where prices are more accessible.
These differences in property types and areas highlight the diverse investment opportunities available in Albuquerque's real estate market. Investors can choose between high-end properties with potentially stable returns or more affordable options with room for appreciation.
If the median home price in Albuquerque were to rise above the national average, it might indicate that the market is becoming less favorable for new investments.
Source: Zillow
So, is it a good time to invest in Albuquerque real estate in 2025? Absolutely!
Investing in Albuquerque real estate in 2025 is a smart move. The city's low vacancy rate of 6.0% indicates a bustling market with high demand for rental properties, ensuring consistent rental income for investors.
Albuquerque's livability score of 72 highlights its appeal as a pleasant place to live, with an affordable cost of living and a vibrant cultural scene. This makes it attractive to both residents and investors, further stabilizing housing demand.
The upcoming I-25 Gibson Interchange Reconstruction Project promises to enhance transportation, likely boosting property values. Additionally, the metro area's growth rate of 1.26% suggests increasing demand for housing, driving up property values.
With a cash-on-cash return of 4.0% for Airbnb properties, Albuquerque offers a reasonable return on investment. Plus, the city's median home price is 24% lower than the national average, providing room for growth and higher returns as the market catches up.