New Mexico remained among the top states enjoying home price appreciation in the fourth quarter last year.

But by the first quarter this year, a buyers market was encroaching on the Land of Enchantment.

The state is beginning to succumb to affordability issues and over building.

But don't expect the market to crash and burn with foreclosures and short sales.

The Realtors Association of New Mexico reported average home prices were up 3 percent for the year ending in the fourth quarter of 2007.

By the first quarter this year, the association reported a reversal of fortunes that saw the average price plummet by 19 percent.

Some of the change is due to buyers being priced out of the market.

The 2008 Colorado College State of The Rockies Report Card gave 19 of New Mexico's 33 counties a "D" grade in affordable housing.

New Mexico's minimum-wage workers must work more than two jobs just to afford local fair-market rents.

In Santa Fe only 19.5 percent of homes are affordable for those earning a median income.

Experts say New Mexico's growing popularity as a second home and retirement locale has pushed up prices and left some areas over-built. However, because most homeowners stay put for 10 years or more, foreclosures due to falling values aren't a major market factor.

Real estate agents reporting to RealtyTimes' Market Conditions for Albuquerque, Clovis and Santa Fe indicated prices are falling in a buyers market. Las Cruces remains a sellers market holdout with rising prices and stronger sales.

Published: May 19, 2008

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.