Evelyn Bruder, Associate Broker, CRS,GRI,ABR
Steinborn & Associates
Real Estate 575-522-3698
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HOMES IN LAS CRUCES, NEW MEXICO
ANALYSIS - 2003 RESIDENTIAL HOMES MARKET
2003 MARKET SUMMARY This table is a summary of the Residential Real Estate Market Activity in 2003.
HOMES SOLD:
2003 was the most active year EVER.
1. The most homes sold - 1590
2. The most new homes sold - 302
3. the highest average and median prices for homes sold -
AVG Price-$143,266 / MEDIAN Price-$127,500
4. The lowest average days on the market - 110
ACTIVE LISTINGS ACTIVITY:
1. As of 12/31/03 there were the lowest number of homes available for sale in a very long time- 468
2. The average and median prices for homes listed for sale was the highest ever - $207224 AVG Price / $174,450 MEDIAN Price
5- YEAR MARKET SUMMARY BACKGROUND: Historically homes sales and home prices in Las Cruces have been relatively stable with increases of both running along with inflation at approximately 2.5% .
Between 1995 and 1998 the Average home prices went from $98K to $112K and the total $-value of Real Estate Sold ranged from $100 Million to $122 Million. This trend continued through the year 2000. In the last three years (2001-2003) everything changed.
With the general economic and stock market downturn, and decreasing interest rates, the Real Estate Market, Nationwide and in Las Cruces, responded with "inflationary" increases in the volume and price of homes sold.
THE LAS CRUCES MARKET 1999 -2003
 2001 to 2003 were remarkable, record breaking years in the number of residential homes sold. After years of +/- 3% increases, since 2001 we have experienced increases of 15%, 13%, and 10%.
 The rise in sales in 2000-2001 was not reflected in the price of homes (remaining at the usual 2.5%. But, the persistent increase in volume in 2002 & 2003 has caused dramatic increases in average and median prices. Prices increased 10% and 8-9% respectively. (Average price of $118,000 in 2000 rose to $143,000 in 2003) The combination of volume and price increases caused a skyrocketting of the total $-value of Real Estate Sold increased from $132 Million in 2000 to $228 Million in 2003. NEW CONSTRUCTION VS RESALE HOMES
 THE NEW VS RE-SALE HOME MARKET AS OF 2002
In my analysis of new and re-sale homes at the end of 2002, I stated that "new home construction is NOT the driving force in the marked upswing in the real estate market in either 2001 or 2002." The number of new home units remained relatively stable (170 - 180 units, and even though the price of new construction rose significantly and is higher than the price of re-sales, it is the greater number, and the greater increase in number of re-sales that account for the great upswing in the market.
AS SHOWN IN THE CHARTS BELOW...
(29 more new homes, even at the very high average price of $198,336, only represents $5.8M; while an increase of 164 resale homes even at the much lower price of $124,439 represents an increase of $20.5M.
2003 - EVERYTHING CHANGED
 Looking at the data at the end of 2003, it becomes obvious that there has be a complete reversal in what drove the market in 2003 vs prior years.
The market continued its steady growth with an increase of $34-Million (17%)in market value in 2003. But you will note immediately that the rate of growth in re-sale homes was very flat(5.87% - $9Million) while the sales of new homes rose dramatically (63.22% -$25Million).
 AS SHOWN IN THE CHARTS ABOVE, the number of new home units sold rose from 185 to 298 (63%)in 2003, and even though the price of new construction remained relatively stable at the record high level of $200,966. The net effect was over $23M in increased value of Real Estate Sold. In 2003 the resale home market was very flat. Number of homes sold went from 1256 to 1275 (19 units (1.5%), and the average price of a resale home increased only 4% (pretty much average) from $124,500 to $130,000.
HOME PRICES
As a supplement to this market summary you will find an analysis of home prices in Las Cruces for 2003. There is an overall picture of home prices with an additional evaluation of the number of homes sold in each price range, and the price per/SF of these homes. There is also an evaluation of home prices by neighborhood including an analysis by new and resale home prices and prices/SF. Click here for the full article.
 2004?
After three record years (2001-2003) in number of homes sold, increases in the price of homes sold and especially with the shift to new home sales dominating the market - we have to ask - can the market sustain or will the bubble burst?
1. Do we believe that the national and local economy will continue to recover and thrive?
2. Do we believe that interest rates will continue to remain low?
3. Will Las cruces continue to grow? Will new industry as well as more retirees come?
All of that will need to happen to sustain the market that we are looking at as of 12/31/2003:
1.Three years of 8 -10% price increases. This is more than triple the average Las Cruces price increase. Las Cruces Prices have increased at least as much or more than the national averages during this time period.
2. The fact that the number of re-sale home sales has flattened out in 2003, and the gains to the market have been made primarily by new home sales, is something which must be watched carefully in 2004 to see if a more normal balance will return. If not, do we have the economic conditions needed to sustain the 2003 pattern.
3. The basket of homes available for sale is also of considerable interest. Availability is low and prices are high.
A. Of the homes available for sale new homes account for 30% with an average price of $254,000. In 2003 only 20% of the homes sold were new and the average price of these was $200,000.
B. Of the re-sale homes available for sale the average price of homes available is $189,000, while the homes that sold in 2003 had an average price of $130,000.
C. 28% of all (New + Resale)of the homes available for sale are over $250,000. In 2003 only 9% of the homes sold were over $250,000.
We are starting 2004 with an interesting supply of inventory. What will the demand be?
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