Albuquerque multifamily fundamentals improve as new supply eases

Albuquerque multifamily market overview

Solid seasonal performance led to vacancy trends reversing in the second quarter, as the vacancy rate in the Albuquerque multifamily market improved year over year for the first time since late 2022. While the annual change was a modest decrease, the quarterly decline of 30 basis points may ultimately be an inflection point in the market after vacancies trended higher for much of the past two years. Heightened demand was a strong contributor, as was a slower pace of deliveries from the first quarter to the second quarter. While the second quarter is traditionally a period of strong demand, the most recent one exceeded historical norms. Apartments recorded net move-ins for approximately 500 units during the past three months, more than double the average second-quarter absorption recorded over the past five years.

Multifamily transaction activity in Albuquerque has been limited to this point in 2026 and the sales mix has shifted away from market-rate complexes with affordable properties now accounting for a larger share of overall transaction volumes. In the market-rate properties that have traded in 2026, the average age has trended to older vintages, after properties built since 2014 accounted for roughly half of the sales in 2025. The shift toward older assets, as well as to affordable properties, has dragged on per-unit pricing. In transactions where pricing was available, the median sale price is $91,400 per unit year to date. During the past five years, median pricing has ranged from $130,000 per unit to roughly $155,000 per unit. Cap rates for affordable properties have generally averaged in the mid-5% range, although most of these transactions closed prior to interest rates trending higher. More recent cap rates on market-rate properties were in the high-6% range.

Looking ahead for Albuquerque

Completions for the full year are expected to lag peaks recorded in 2025 by 38% but will closely track the totals recorded in 2023 and 2024. The construction pipeline is comprised mostly of affordable and partially affordable apartments, which is also the case for the planned pipeline. Inventory growth in the coming quarters and years will shift away from the influx of market-rate apartments that have come online in recent years. This should bode well for market-rate fundamentals, as the strong completions of the past few years will face minimal competitive impact from the affordable and partially affordable assets that are set to deliver in the future. Vacancy is expected to hold at around 7% through the end of the year, and rents are expected to advance roughly 1.5% annually, helping to offset the losses recorded in 2025.

The pace of multifamily sales is likely to remain limited through the end of 2026, and activity for the full year is projected to finish below historical levels. There could be a modest increase in volumes involving new builds as these properties reach stabilization, although a higher interest rate environment may delay transactions until the rates outlook brightens. Aside from last year, very few assets built since 2020 have sold in a period where more than 4,500 units have come online. Additionally, of the 10 properties currently in lease-up in Albuquerque, almost none have changed hands. Some of these assets will likely be made available for purchase in the coming quarters and years. If cap rates push higher, there may still be investor demand for properties built from the 1970s to the 2000s, vintages that have traditionally accounted for the majority of sales in the region.

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For a more complete analysis of the supply, demand, vacancy, rent and investment trends in the Albuquerque multifamily market, download and read the full report below.

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