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May 08, 2023 Las Cruces median home price cannot make up its mind

Gary Sandler

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Published 8 May 2023

To say that the movement of the median sales price of the 1,891 Las Cruces-area single-family homes sold over the past year has been erratic is a bit of an understatement. Crazy is a better description. According to a 12-month history of our area’s median home prices culled from the archives of the Las Cruces Association of Realtors on May 3, 2023, home prices over the past year experienced two record-setting months, two months of substantial losses in value, and a year-over-year appreciation rate of less than two percent. The median is where half sold for more and half sold for less.

The 12-month lookback began in May of 2022, when the median price of the homes sold that month hit $286,000. By the time June ended, the median price had increased by $11,500, to $297,500. That gain was short lived, however, when the median price dropped to $289,250 in July. After rebounding to $294,500 in August, September’s median price fell by more than $19,000, to $275,356. Between September and October, the median price once again changed direction and increased by $24,644 to a record setting high of $300,000. That achievement was also short lived when the median price declined by $29,525, to a 12-month low of $270,475, in November.

Over the next 3 months, the median price steadily increased until reaching a new record high of $305,000 in February. In a stunning reversal of fortune, the median price then fell by a whopping $33,760, to $271,240, in March. In the eighth price reversal of the 12-month period, April’s median price rebounded to $291,050. In the end, the year-over-year rate of appreciation, that is the difference between the $286,000 median price posted in May of 2022 and its April 2023 counterpart of $291,050, was just $5,050, or 1.76 percent.

In other news, the rise in mortgage interest rates has caused homebuyers to lose a substantial amount of buying power. Here’s an example: A borrower who qualified for a $350,000 mortgage in January 2022 when the rate was 3.22 percent would have had a monthly principal and interest (P&I) payment of $1,517.00. The monthly payment would be $2,298.00at today’s national average of 6.87% and require additional annual income of $26,000to Qualify. At 6.87 percent, that $1,517P&I payment will only support a mortgage of $231,000. The difference represents a loss of $119,000, or 33 percent, of their buying power.

See you at closing.

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

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