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Published 9 October 2023
It’s no secret the Las Cruces real estate market is experiencing a change of direction, from a sellers’ market to a buyers’ market. Two questions that immediately come to mind are how quickly and to what extent is the change occurring? While there is no single source for the answers, there are a number of indicators that paint a fairly clear picture of the direction our market is taking. What follows are data from an October 5 report from the Las Cruces Association of Realtors.
One of the most often quoted indicators is the median sales price, where half sold for more and half sold for less. Both new and existing-home prices have been trending downward over the past two-to-three months. After rising to $399,000 in July, the median price of the newly constructed homes that closed escrow in August dropped by $55,425, to $343,575. Between August and September, the price dropped by an additional $14,004, to $329,571. That’s a $69,429, or 17.4 percent, decline over two months. The median existing-home price peaked at $307,000 in August, before declining by $22,000, or 7.2 percent, to $285,000 in September.
A growing inventory of unsold listings typically indicates that the number of buyers in the marketplace is on the decline. Currently on the ground and for sale in Las Cruces are 417 new and existing single-family homes, which is a far cry from the 167 homes for sale just over one year ago. (The all-time high for our inventory was 1,745 in 2007.) Our month’s supply grew by 41.7 percent between August and September, increasing to 3.4 from 2.4. The unsold listing category, which includes listings which were withdrawn, cancelled or expired, grew by 142.9 percent between August and September. The list-price-to-sales-price ratio, or the percentage of the asking price received, is another important benchmark. In September, it was 97.2 percent for existing-home sales. One year ago, it was 99.8 percent.
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. There’s little doubt Freddie Mac’s October 5 announcement that the 30-year fixed rate mortgage rose to an almost 23-year high of 7.48 percent will act as a drag on the already-slower fall and winter sales.
Other indicators, such as affordability rates, mortgage applications, days on market, price per square foot, building permit numbers, and a few others are also trending negatively. Add to those factors the Fed’s notion that they’ll raise rates again between now and the end of the year will certainly make the coming months challenging for both buyers and sellers.
Ah, but it’s all about perspective. It appears our Las Cruces market may have crested the wave that began forming in 2007. During the 5-year period between that year and 2012, the median price of a Las Cruces-area single-family home fell by $41,245, or 21.6 percent, to a then modern-day low of $149,500. That’s a decline of $859 per month for 48-straight months. Paraphrasing a tag line from a popular 1967 cigarette commercial, we’ve come a long way baby.
See you at closing.
About author
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About Author
Gary Sandler
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