Recent Supply High Softens Apartment Fundamentals in Albuquerque

Apartment supply has historically been limited in Albuquerque. From 2003 through 2022, the market added less than 6,100 units, expanding inventory an average of just 310 units (0.5%) per year. However, completions began picking up in the second half of 2023. In the year-ending 1st quarter 2024, Albuquerque added 1,038 units to its apartment stock. While that new inventory expanded the existing unit base just 1.8%, it marked a 25-year high for the New Mexico market, according to data from RealPage Market Analytics. Although that’s not an aggressive expansion rate nationally, it’s enough to cause weakness in the local apartment market. In 2024’s 1st quarter, occupancy in Albuquerque remained at an eight-year low of 93.6%. That rate was down 380 basis points (bps) from the all-time high of 97.4% achieved just over two years ago. Meanwhile, effective asking rents rose 1.4% in the year-ending 1st quarter, Albuquerque’s second-weakest performance in five years. Even more new supply is on the way. Albuquerque is set to receive 2,083 units in the year-ending 1st quarter 2025. Should all those units complete as scheduled, inventory will expand by a 29-year high of 3.6%.