Top 5 Residential Real Estate Investment Markets in New Mexico

Trent Seigfried's Photo
By Trent Seigfried Updated May 28, 2024
's Photo
Edited by Michael Yessis

SHARE

Tucumcari is home to the best residential real estate investment market in New Mexico.

The 88401 zip code in Tucumcari presents the greatest opportunity for investors among the 276 individual real estate markets in New Mexico we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 New Mexico residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Tucumcari1002.042.59%
2Carlsbad97.32.613.02%
3Rio Rancho94.14.269.46%
4Albuquerque93.64.265.04%
5Roswell91.23.233.13%
Show more

Looking to buy or sell in New Mexico?

Considering investing in Tucumcari, the hottest investment market in New Mexico (or another top market)? Own a property in Carlsbad, Rio Rancho, or another part of New Mexico and are looking to sell? Let us match you with a top real estate agent in your city!

1. Tucumcari

We've identified the 88401 zip code in Tucumcari as New Mexico's best real estate investment market. Here's why.

πŸ”Ž Key data about Tucumcari

Data pointValueRank in state (of 276 markets)
Zip code88401N/A
InvestScore 100Highest
Typical property value $79,692[1]lowest
Five-year appreciation 42.59%[2]48th highest
Household income $40,313[3]61st highest
Affordability ratio 2.0most affordable
Five-year population growth 2.2%[4]29th highest
Unemployment rate 3.7%[5]10th lowest
Property taxes $482[6]lowest
Educational attainment 14.6%[7]59th highest
Show more

Tucumcari (zip code 88401) is the best residential real estate investment market in New Mexico. It has the 48th highest property value appreciation among markets we evaluated, with a 42.59% appreciation of the typical property over the last five years.

Tucumcari is the most affordable market among the 276 New Mexico markets we evaluated, with an affordability ratio of 2.0.

2. Carlsbad

The 88220 zip code in Carlsbad is New Mexico's second-best residential real estate investment market.

πŸ”Ž Key data about Carlsbad

Data pointValueRank in state (of 276 markets)
Zip code88220N/A
InvestScore 97.32nd highest
Typical property value $206,934[8]19th lowest
Five-year appreciation 13.02%[9]65th highest
Household income $79,809[10]11th highest
Affordability ratio 2.64th most affordable
Five-year population growth 12.2%[11]7th highest
Unemployment rate 3.7%[12]10th lowest
Property taxes $954[13]16th lowest
Educational attainment 19%[14]49th highest
Show more

The 88220 zip code in Carlsbad features a typical property value of $206,934, the 19th lowest in the state.

Property values have appreciated 13.02% over the past five years, the 65th highest increase among evaluated markets in the state. Carlsbad homes have an affordability ratio of 2.6, the 4th most affordable in the state.

3. Rio Rancho

The 87144 zip code in Rio Rancho comes in at No. 3 in our ranking of residential real estate investment markets in New Mexico.

πŸ”Ž Key data about Rio Rancho

Data pointValueRank in state (of 276 markets)
Zip code87144N/A
InvestScore 94.13rd highest
Typical property value $354,180[15]51st lowest
Five-year appreciation 69.46%[16]9th highest
Household income $84,303[17]7th highest
Affordability ratio 4.221st most affordable
Five-year population growth 17.9%[18]3rd highest
Unemployment rate 5.5%[19]35th lowest
Property taxes $2,221[20]49th lowest
Educational attainment 34.4%[21]23rd highest
Show more

With a typical property value of $354,180, Rio Rancho's 87144 zip code features the 51st lowest property values in the state.

Rio Rancho homes have an affordability ratio of 4.2, the 21st most affordable among the markets we evaluated.

4. Albuquerque

The 87120 zip code in Albuquerque ranks No. 4 among New Mexico's residential real estate investment markets.

πŸ”Ž Key data about Albuquerque

Data pointValueRank in state (of 276 markets)
Zip code87120N/A
InvestScore 93.64th highest
Typical property value $340,616[22]48th lowest
Five-year appreciation 65.04%[23]12th highest
Household income $80,704[24]12th highest
Affordability ratio 4.223rd most affordable
Five-year population growth 6.1%[25]11th highest
Unemployment rate 3.9%[26]15th lowest
Property taxes $2,653[27]60th lowest
Educational attainment 37.4%[28]20th highest
Show more

Property values in Albuquerque's 87120 zip code have seen the 12th highest increase among evaluated markets in the state, with an appreciation of 65.04% over the past five years.

Albuquerque's affordability ratio of 4.2 makes it the 23rd most affordable among the 276 markets we evaluated.

5. Roswell

The 88201 zip code in Roswell rounds out our top five residential real estate investment markets in New Mexico.

πŸ”Ž Key data about Roswell

Data pointValueRank in state (of 276 markets)
Zip code88201N/A
InvestScore 91.25th highest
Typical property value $194,899[29]15th lowest
Five-year appreciation 33.13%[30]51st highest
Household income $61,464[31]51st highest
Affordability ratio 3.211th most affordable
Five-year population growth 0.1%[32]35th highest
Unemployment rate 3.8%[33]13rd lowest
Property taxes $1,206[34]28th lowest
Educational attainment 27.2%[35]34th highest
Show more

Property values in Roswell's 88201 zip code rose 33.13% over the last five years, ranking the city 51st highest among evaluated markets in New Mexico.

Roswell homes have an affordability ratio of 3.2, the 11th most affordable among the markets we evaluated.

How we rank residential real estate markets in New Mexico

We evaluated 276 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in New Mexico.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

Authors & Editorial History

Our experts continually research, evaluate, and monitor real estate companies and industry trends. We update our articles when new information becomes available.

Better real estate agents at a better rate

Enter your zip code to see if Clever has a partner agent in your area
If you don't love your Clever partner agent, you can request to meet with another, or shake hands and go a different direction. We offer this because we're confident you're going to love working with a Clever Partner Agent.