Albuquerque rent prices ease off from record highs
ALBUQUERQUE, N.M. — The days of skyrocketing rent prices appear to be over in Albuquerque.
“Prices have seemingly peaked in summer,” said UNM finance professor Reilly White. “Since then, they’ve been coming off fairly slowly in the Albuquerque area.”
According to Rent Café, the average price for all types of apartments in Albuquerque is $1,320 per month. White says that is roughly 35% higher than in 2020, but it’s still below the current national average of $1,702 per month.
A recent report from Rent.com found rent prices nationwide decreased by nearly 2% in September – the first decrease since April. While other reports suggest rent prices are still slowly increasing in Albuquerque, White believes the market is leveling off due to a major increase in new construction.
“We’re starting to see some of those effects of supply hitting the market, more apartments hitting the market, and with that increase in supply, we’re seeing downward pressure on rents,” he said.
The Apartment Association of New Mexico says there are 40 apartment complexes under construction around Albuquerque right now. Those new complexes are expected to add 5,331 new units to the market in the coming months.
It’s been 30 or 40 years since we’ve seen this kind of growth in Albuquerque, maybe longer, actually,” said Alan LaSeck, executive director of the AANM. “It takes multiple years, obviously, to get these projects off of the ground, so this has kind of been a long time coming, but 2024 is going to be a huge year for deliveries on apartments.”
According to the association, 70% of the upcoming apartment units will be market-rate housing. The other 30% will be affordable housing – LaSeck says that means they will be income restricted or benefit from government subsidies.
LaSeck says there are at least 5,200 more apartment units still in the development pipeline. Despite the drastic increase in housing supply, he says the nearly 10,000 new units still won’t be enough to meet the estimated demand of 15,000 – 30,000 units in the Albuquerque metro area.
“It may take a little while for the absorption to kind of take in these new apartments, but I do believe that this is a great thing,” LaSeck said. “This provides more opportunities for tenants, more opportunities for residents to pick from newer opportunities to move into a new place, maybe a different part of town.”
Both White and LaSeck predict rent prices will not increase anytime soon; however, both of them say renters should not expect prices to decrease either.
“You may see some dips in rent prices, but what you’ll really see is concessions,” LaSeck said. “What that means is apartments offering a first month maybe rent free or $100 off a month.”
White noted historically high mortgage rates – around 8% – are pushing many homebuyers into the rental market. He says once home prices come down, the demand for rentals will likely decrease potentially bringing rent prices down.
“In the next year, our forecast is looking at something where we’re looking at fairly stable rents or slightly decreasing rents going forward, but not in a way that will depreciate very rapidly,” White said.