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Nov 09, 2023 Las Cruces home-sale indicator flashes value warning

Gary Sandler

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Published 9 November 2023

As reported in this column last month, a number of local home-sale indicators have, for the last few months, pointed to the fact that our Las Cruces real estate market is transitioning from a seller’s market to a buyer’s market. In a report generated by the Las Cruces Association of Realtors on November 2, a new and arguably one of real estate’s most important indicators has emerged. That indicator, which I’ll detail below, traditionally validates all the previous indicators that together have been projecting a decline in values.

Those previous indicators include a growing inventory of unsold listings (currently at 455, up from 167 just over a year ago), an increasing month’s supply (which grew by over 40 percent between August and September), and a declining list-price-to-sale-price ratio. The latter dropped from 99.8 percent of the asking price one year ago, to 96.9 percent as of this writing.

New contracts signed is another key category, foretelling the approximate number of closed sales 30 to 60 days into the future. One hundred twenty-four contracts were signed in September, down 22.5 percent from the 160 contracts signed in August. And then there’s the seasonal factor. Traditionally, Las Cruces-area Realtors book around 57 percent of their sales over the spring and summer months, resulting in fewer buyers in the marketplace over the fall and winter.

So, what is the indicator that validates those that preceded it? It is what I refer to as the sales-price-to-list-price inversion. More specifically, it is when the median list price of the homes currently under contract is lower than the median sales price of the homes sold in the previous month.

The Nov. 2 report shows the median sales price of $310,000 for the 107 new and existing single-family homes that closed escrow in October. The report also shows a $305,885 list price for the 199 new and existing single-family homes that are currently under contract and awaiting closing; – a difference of $4,155. While one stand-alone statistic certainly doesn’t constitute a trend, it is a sign that competition for buyers is definitely heating up.

See you at closing!

Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces, New Mexico. He loves to answer questions and can be reached at (575) 642-2292 or Gary@GarySandler.com

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