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Home prices increase despite saturation of houses on market
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By the numbers
The number of housing units sold continues to drop compared to a year ago, while the inventory of available homes continues to rise. Here's a look at November over the years.
2006: 935 sold; 4,363 on market
2005: 1,130 sold: 2,263 on market
2004: 900 sold; 2,572 on market
2003: 679sold; 2,845 on market
Source: Albuquerque Metropolitan Board of Realtors
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Will housing prices ever stop rising?
The question becomes more acute when looking at the November home sales figures released Tuesday by the Albuquerque Metropolitan Board of Realtors.
The 935 units sold in November represent a 17.3 percent decrease compared to a year earlier.
Meanwhile, the number of homes on the market as of Sunday - 4,363 - is nearly 93 percent more than the 2,263 from the same day a year earlier.
Despite the saturation of homes on the market, the average home price in November increased by 10 percent in the metro area compared to a year earlier - from $219,949 in 2005 to $242,061 last month. The median sales price, the point at which half the homes sold for more and half for less, rose 7.3 percent from $178,900 in November 2005 to $192,000 last month.
"It can't continue like that," said Cathy Colvin, who leads the realtors board. "Not with the amount of homes people have to choose from."
Colvin isn't predicting a grave drop in home values, as in places like California, Nevada and parts of the East Coast where the cost of buying a home has skyrocketed in recent years. Instead, Albuquerque home prices should begin to level, rather than increase, as long as the inventory of homes stays high, she said.
A piece of good news this month is the fact that the inventory of homes - while significantly higher than it was last year - dropped by more than 260 homes from the board's last report on Nov. 10.
Overall, board officials say the local housing market continues to be stronger than in recent years. Just three years ago, only 679 housing units were sold in November, according to board statistics.
"This time of year we usually see a slow down anyway, regardless of what the market is," Colvin said.
