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.

A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.