Note: Our data exclude some areas of the Taos MLS (Angel Fire, Eagle Nest, Red River, Raton, Chama, Mora, San Miguel County, “Other”) which we do not consider relevant to the main Taos market.
The market was UP again in December for the third month in a row, narrowing the negative variance to 2015: Total closed transactions were down 3.5%; dollar sales were down 5.8%.
Single-family homes and condos almost equaled last year’s totals. Unit sales of homes were just 1.2% below 2015 sales; Dollar sales of homes were 3.0% above last year’s level. Condo unit sales were down 1.5%; dollar sales were down 0.7%. The number of land sales was up marginally, but dollar sales were down significantly. Commercial sales were down approximately 60% compared to 2015, which had a real surge.
At the beginning of this year, we had expected a moderate increase in sales over 2015, extending the gains of 2015 over 2014. Looking back now, we realize that there were several factors which caused 2016 to fall short of expectations: the limited inventory of good homes for sale; the impact of the oil price collapse on many would-be buyers from Texas-Oklahoma; and the preoccupation with the political elections. These factors caused some people to put a Taos real estate purchase on hold.
We expect that in 2017 the market will resume a gradual upward trend. Now that the election is over, people should start to pay less attention to politics and more to their personal goals and aspirations! The out;look for the economy is generally positive; the stock market is at an all-time high; interest rates have increased some but they are still very favorable. Current Taos real estate market activity seems greater than at this time last year, with quite a few properties going into contract.
SUMMARY OF TOTAL MARKET (all categories of property)
Month of December (2016 vs. 2015)
# of Closed Sales INCREASED from 37 to 42 (13.5%)
Dollar Sales DECREASED from $9,056,200 to $8,300,600 (-8.3%)
Year to December 31 (full year – 12 months)
# of Closed Sales DECREASED from 430 to 415 (-3.5%)
Dollar Sales DECREASED from $106,919,000 to $100,731,300 (-5.8%)
December unit sales were 67% above last December’s: 25 vs. 15 homes sold. Dollar sales were up 62%, from $4,331,900 to $7,036,400.
For the full year, unit sales finished the year down only 3 units (1.2%) at 249 vs.252 houses sold. Dollar sales were UP 3.0%, from $73,962,900 to $76,208,500.
Average Prices – The median price for the year was up 9.2% compared to 2015, from $259,500 to $283,500. The average (mean) was also up, from $293,500 to $306,100 (4.3%).
Price Discounting – For the full year, actual selling price averaged 4.4% less than the last asking price when the property went under contract. However, the average discount from original asking price was 10.5%. For 2015, the discount from original asking price was 13.9%; for 2014, it was 16.9%; for 2013, it was 18.4%.
Price Level – Prices of single-family homes fell 30%–40% from the market peak in 2007 to a bottom in 2012. Prices were flat for a few years. During the past 1-2 years, they are starting to move up some, but mainly for good-quality homes in the most preferred areas; we are not yet seeing consistent price rises across the board.
Days On Market – The average days on the market for all the homes that sold in 2016 was 228 vs. 235 in 2015. In 2014, it was 235 days. Even during the boom years 2004-2006, the average time to sell a house in Taos was the same as today: about eight months. However, we are seeing well-priced homes in preferred areas selling relatively quickly, due to very limited inventory.
Inventory and Sales by Price category:
|Current||Last||Sept.||# of||% of||# of||% of||# of||% of|
|Up to $200,000||48||54||190||47||25%||91||35%||78||31%|
|$200,001 – $300,000||54||53||109||46||25%||56||22%||61||24%|
|$300,001 – $400,000||51||54||69||35||19%||52||21%||49||20%|
|$400,001 – $500,000||29||27||39||17||9%||24||9%||32||13%|
|$500,001 – $650,000||26||20||35||20||11%||15||6%||17||7%|
|$650,001 – $800,000||20||21||27||7||4%||9||4%||11||4%|
|$800,001 – $1,000,000||22||24||36||8||4%||4||2%||0||0 %|
The number of pending sales remained steady at 16 homes under contract.
Inventory – The inventory dropped again, but only slightly, from 267 homes on the market last month to 264 at the time of this report. The inventory consists of a very wide variety of price, style, location, and condition; so it is often difficult to find more than a few homes that meet most of a buyer’s criteria. Note that in September of 2008, there were 518 homes listed for sale. The lack of inventory has been a constraint on sales.
Cash Sales vs. Loans – Here is how the 249 homes that have sold so far this year have been financed:
|FHA loan||11||( 4%)|
|VA loan||10||( 4%)|
|Seller financing||7||( 3%)|
Foreclosure Sales – For the full year 2016, there were 34 foreclosure sales (14% of total houses sold). The highest sale price was $787,600, followed by $522,000, then $455,000. There were three sales in the $300,000’s, five in the $200,000’s, ten in the $100,000’s; thirteen sales were below $100,000. The number of foreclosure sales, and their percentage of total sales of single-family homes, for the previous five years were:
The number of bank-owned houses listed for sale has decreased again, from 8 to 6; of those, one is under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both here in Taos and nationally.
December condo sales were down by 1 unit, (5 vs. 6). Dollar volume was down from $1,263,300 to $606,000 (-52.0%).
Full-year 2016 unit sales were nearly equal to last year’s (67 vs. 68). Dollar sales were down 0.7% at $14,261,900 this year vs. $14,368,700 last year.
The median price for the year was up 6.8% ($188,000 vs. $176,000). The average (mean) price was up only 0.8%, from $211,300 to $212,900. 2016 did not have as many high-dollar sales as 2015.
As a comparison to peak market levels, in the full year 2006 there were 149 condos sold, with a median price of $251,000, and an average price of $259,300.
Price Discounting – For the full year 2016, final sales price averaged 5.3% less than last asking price when the property went under contract. The average discount from original asking price was 11.8%. For the full year 2015, the discount from original price averaged 8.6%.
Inventory – The number of condos listed for sale at the time of this report decreased from 53 last month to 44. In 2016, the highest inventory was 72 units listed for sale, which was in January. In 2015, peak inventory was 89 units, in August. In 2006, there were often over 200 condos on the market at any given time, since developers built a lot of units in 2004-2006. Buyer interest in condos has decreased since the peak years. As a result, there has been almost no new condo development. One factor affecting demand for condos is that conventional loans are more difficult to obtain.
Inventory and Sales by Price Category
|Current||Last||Sept.||# of||% of||# of||% of||# of||% of|
|Up to $150,000||5||6||40||10||20%||19||32%||22||33%|
|$150,001 – $250,000||22||26||50||15||30%||27||45%||27||40%|
|$250,001 – $350,000||7||9||51||14||28%||5||8%||10||15%|
|$350,001 – $500,000||7||9||56||7||14%||5||8%||6||9%|
The number of pending sales remained the same at 3 units under contract.
Days On Market – The average days on the market for 2016 was 259 compared to 324 for 2015; in 2014, it was 237 days.
Cash Sales vs. Loans – Of the 67 condos that sold in 2016, 33 were cash sales (49.3%); 33 were financed with a conventional loan (49.3%); there was one FHA loan (1.4%).
There were no sales in December in either 2016 or 2015. Full-year sales were two sales in 2016 vs. five in 2015. Dollar volume was down, from $1,725,000 to $787,500.
Currently, there are seven multi-family properties listed for sale. There are two pending sales, including a 6-unit property priced at $585,000.
Investor interest in multi-family should start to increase. The supply of long-term rentals is low, as many property owners have switched to short-term (vacation) rentals. Long-term renters are having difficulty finding places to live. Rents are rising; therefore capitalization rates (net operating income as a percentage of sales price) should become more attractive to investors.
The number of land sales in December 2016 was equal to December 2015’s, at 12 tracts sold. Dollar sales were up 21.7%, from $541,000 to $658,200.
For the full year, land unit sales were slightly ahead of last year’s pace, at 90 vs. 88 tracts sold. But dollar sales are down 25.1%, from $8,791,400 to $6,582,600. The mix of sales this year consists of more lower-priced lots than last year (see the chart below). The median price year-to-date is down, from $64,500 vs. $52,300 (-18.9%). The average (mean) price is also down, from $99,900 to $73,100 (-26.8%).
The highest sale price was $845,000 for a 4.85-acre commercial lot on the main thoroughfare through town, purchased for a planned hotel development. The next highest was also on the commercial corridor: $510,000 for the lot that the new Dollar Tree store was built on. The highest residential lot sale was $290,400 for 4.8 acres in the Des Montes area.
For the year, the price discount from last asking price was 13.4%. The discount from original asking price was 22.4%.
The average days on market for the 90 tracts that sold in 2016 was 464. In 2015, the average for the 88 closed sales was 605 days; for the 73 tracts that sold in 2014, it was 390; for the 86 listings that sold in 2013, it was 465.
Inventory and Sales by Price Category
|Current||Last||Aug.||# of||% of||# of||% of||# of||% of|
|Up to $50,000||154||159||121||32||29%||32||37%||33||42%|
|$50,001 – $100,000||174||179||143||33||29%||28||32%||29||37%|
|$100,001 – $150,000||96||98||75||19||17%||9||10%||8||10%|
|$150,001 – $200,000||45||49||51||9||8%||8||9%||4||5%|
|$200,001 – $250,000||19||23||18||9||8%||5||6%||0||0%|
|$250,001 – $300,000||11||12||18||3||3%||3||3%||2||3 %|
The number of pending sales decreased from 12 to 11 tracts under contract.
The inventory decreased from 575 to 553 tracts listed for sale. At the current rate of 90 sales per year, this equates to a 6.1-year supply.
The number of land sales is still very low compared to the early 2000’s. In the full year 2005, there were 339 closed land sales for a total value of $39 million. In 2006, 296 tracts sold for a total of $42.7 million.
There were no commercial sales in December 2016, down from 4 in December 2015.
For the full year 2016, there were 7 commercial sales vs. 17 in 2015. Year-to-date dollar sales are down from $8,071,000 last year to $2,890,800 this year (-64.2%). Last year was a rather amazing year for commercial sales, with volume about equal to peak year 2005.
In 2014, there were just three sales, totaling $2.34 million.
Currently, there are 42 commercial listings, with five pending sales. These include an RV park with an asking price of $350,000 which has been under contract for a long time; a budget motel near the RV park; the old Appleby’s restaurant with an asking price of $990,000; and a gallery space on the main road north of Taos Plaza, with asking price of $850,000.
The commercial market is still weak, with a lot of vacancies in retail stores and professional office space. Unlike residential rents, commercial rents are not rising. Nevertheless, it appears that there are investors who believe that the Taos economy is going to improve; therefore we expect an increase in commercial sales over the next several years.