There’s a decaying real estate market in New Mexico and it’s all a product of plummeting buyer confidence, rising foreclosure incidents, and tighter credit availability. The housing market is already in a downward spiral in this state of natural forests and Air Force bases. Although the population is growing at a fast rate, this has not provided enough stimuli for home construction. The economy is further taken in lumps as oil prices plummet to low levels after last year’s record-breaking prices per barrel. The state budget has been highly burdened by this situation.

In Albuquerque, the technology sector was an economic bulwark during the onset of the real estate crisis. Many were qualified to receive prime loans, a situation that demanded less of the risky subprime and Alt-A mortgages. The local government also retained employment to more residents that guaranteed their financial standings amidst the recessionary economy. With this, the city is only getting to the nip of the crisis at a slower pace compared to other areas. The economy will still be supported by call centers and manufacturing centers this year.

For the next 10 months however, the home values in Albuquerque are going nowhere but down. As home sales turn weaker, expect added pressure to home prices. RealtyOutlook.com forecasts values to fall down by 12.5 percent.

In Sante Fe, where tourist activity is a significant contributor to the city’s revenues, the real estate market hasn’t grown since the start of the national downturn. Its vacation homes account for a significant portion in the total housing units but rental homes have experienced a slack response among tourists.

Home values haven’t regained their normal figures and is expected to linger throughout the year. Furthermore, the high cost of living in the capital of New Mexico will continue to stress the saddled market. This year, home inventory will rise more thus depressing home prices by 11.5 percent.

The Las Cruces property market is also badly impaired by the crisis. First, home purchases cannot offset the current glut of housing supply in the market. This situation persists even if mortgage lenders are ready to provide them with loans. Second, homebuilders are suffering from losses due to the lack of interested buyers. Foreclosure rates are hitting all-time high with no chance of mitigating throughout the year. RealtyOutlook.com predicts current conditions to further strain home values through a 13.5 percent depreciation.