Albuquerque's Economy: How We Got Here After a Decade of Boom, Bust and Uncertainty

The median home price in Albuquerque hit $365,000 in June, up 48 percent from five years ago but essentially flat since January. That plateau marks a sharp turn in the trajectory that began in 2020, when the pandemic triggered a wave of out-of-state buyers and remote workers-many from California and Texas-pushing prices in the Duke City higher than local incomes could easily support.

Why that matters now: After two years of interest rate hikes by the Federal Reserve and a cooling national housing market, the local economy is recalibrating from what some economists call a “post-pandemic overshoot.” The city’s job market, while still strong with unemployment at 3.8 percent in May, no longer benefits from the same tailwinds that boosted construction, logistics and professional services between 2021 and 2023.

A Tale of Two Recoveries on Central Avenue

Walk down Central Avenue between the University of New Mexico campus and Nob Hill, and the evidence of the recent past is visible in storefronts. A dozen new cafes and breweries opened on that stretch since 2021. But two blocks away, the shuttered Garla’s Furniture on Central and Washington-a fixture since 1972-remains vacant after the owner cited rising property taxes and a lease dispute in 2024. The contrast reflects a broader split: the uptick in foot traffic and consumer spending has not reached every corridor equally.

The city’s economic development office, headquartered at One Civic Plaza downtown, has targeted the Central Avenue corridor for a $12 million streetscape improvement plan funded partly by the 2022 general obligation bonds approved by voters. That money is still flowing, with construction expected to wrap on the section between I-25 and San Mateo by spring 2027.

Data Points That Tell the Story

Albuquerque’s gross metropolitan product grew 3.2 percent in 2025, according to the University of New Mexico’s Bureau of Business and Economic Research. That is down from 5.1 percent in 2023 and 4.6 percent in 2021. The slowdown mirrors national trends, but the local mix of industries-with heavy reliance on federal labs and the health care sector-has buffered the city from the sharper slowdowns seen in places like Phoenix or Denver.

The city’s sales tax revenue hit $276 million in fiscal year 2025, up 2.1 percent from the prior year, but below the 8 percent average growth between 2021 and 2023. Officials at the city’s Finance and Administrative Services Department, which tracks revenue from the gross receipts tax, say the drop reflects lower consumer spending on big-ticket items like vehicles and appliances, while restaurant and hotel tax collections remain robust.

Meanwhile, the Sandia and Los Alamos national laboratories, which together employ about 25,000 people in the region, have seen steady funding increases. The labs’ combined budgets for 2026 total $7.8 billion, up from $6.99 billion in 2022, according to the National Nuclear Security Administration. That federal anchor has provided stability even as the private sector cooled.

One number that stands out: the residential construction permit count in the city dropped to 1,012 in 2025, the lowest since 2018, according to the City of Albuquerque Planning Department. Builders have cited higher materials costs and labor shortages, a legacy of the supply chain disruptions that peaked in 2022 and never fully unwound.

What Comes Next for Local Residents and Businesses

For the typical Albuquerque homeowner, the practical takeaway involves property tax assessments, which the Bernalillo County Assessor's Office will mail out in early August. With values stabilizing, early filings for protests could be worth considering-as county records show nearly 3,000 residents filed appeals in 2025, a 15 percent jump from 2023.

For small business owners, especially along the Central corridor and in the North Valley, the next milestone is the expiration of the state's Sustainable Economic Development Act tax credits in December 2027, a program that has supported projects from the Sawmill Market area to the Westside. Renewal is expected to be a central issue in the 2027 legislative session.

And for anyone watching the local economy day-to-day: the weather this summer matters. The monsoon season, which brings critical moisture to the Rio Grande Valley, is forecast to be average after two drier-than-normal years. If it holds, the outdoors sector-from Bosque trails to the Sandia tram-could see a steady season; if not, the cascade of drought and wildfire risks could pressure insurance rates and tourism dollars all over again.