Note: The data herein do not include Angel Fire, Black Lake, Cimarron, Eagle Nest, Red River, Raton, Chama, Mora, San Miguel, and “Other” areas that are in the Taos MLS. For the most part, buyers looking for property in Taos are not looking in those areas, and vice versa. Those areas do not have their own MLS system, and many brokers in those areas have joined the Taos MLS; however, basically they are separate and distinct markets, so they are not included in this report on the Taos market.
2018 started with gains in all categories of property. Single-family homes are the largest component of the market. January unit sales were up 33.3% over last year. Buyer interest continues to grow while inventory remains very limited. There isn’t enough supply to satisfy the increasing demand. Good homes in good locations are selling faster, and prices are rising. Even homes in less-popular areas are selling.
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TOTAL MARKET (single-family homes, condos, multi-family, land, commercial)
Month of January (2018 vs. 2017)
# of Closed Sales UP from 23 to 34 (+47.8%)
Dollar Sales UP from $4.27 million to $8.77 million (+105.4%)
As the second of these two charts shows, since bottoming out in 2011-2012, the overall market to December 2017 has gained 105% in unit sales, and 130% in dollar sales. The market has not yet reached the peak level of 2005-2006 – it’s still about 20% below that – but it is on track to reach that in another couple of years.
In 2017, SFH accounted for 60% of total market transactions, and 76% of dollar sales. In peak years 2005-2006, SFH were about 42% of total transactions, and about 57% of total dollar sales. In the years since the real estate market downturn, condos, multi-family, land and commercial have not recovered as much as single-family homes.
January 2018 unit sales exceeded last January’s by 5 units: 20 vs. 15 (+33.3%). Dollar sales were up 91.6%, from $3,491,999 to $6,689,100.
For the full year 2017, the number of houses sold was up over 2016 by 14.1% (284 vs. 249). Dollar sales were up 21.8%, from $76.2 million to $92.8 million. The gain last year would have been even greater if there had been more good homes available for purchase. This will be true again in 2018.
Average Prices – January median price was $310,000 this year vs. $165,000 last year (+87.9%). The full-year 2017 median price was $300,000 vs. $283,500 in 2016. January average (mean) price was $334,500 this year vs. $232,800 last year (+43.7%). The full-year 2017 average was $326,800 vs. $306,100 in 2016..
Price Discounting – January actual selling price averaged 5.6% than the last asking price when the property went into contract; the average discount from original price was 9.6%. For the year 2017, the discount from original price was 9.4%; in 2016, it was 10.5%; in 2015 it was 13.9%; in 2014 it was 16.9%; in 2013, it was 18.4%.
Price Level – Prices of single-family homes fell 30%–35% from a peak in 2007 to a bottom in 2011. Prices were basically flat for a year or two, then they started to increase, but mainly just for good-quality homes in the most preferred areas. By 2015 prices were rising in most cases, due to increasing demand and limited supply. On average, prices now are about 10% – 15% below peak market levels. Of course, prices in the most preferred areas have risen more than others.
Days On Market – The average days on the market for all the homes that sold in 2017 was 192 vs. 228 in 2016 (-15.8%). However, this statistic must be qualified: Due to an MLS rule change, in some cases listings got a new MLS number with days on market re-set to zero. This has happened in a number of instances, and this has compromised the accuracy of the days-on-market statistic.
Nevertheless, it is also true that buyers today are moving faster than they historically have in Taos. The average for the full year 2015 was 234 days; in 2014, it was 235 days. Even during the boom years 2004-2006, the average time to sell a house in Taos was about eight months — much longer than in many U.S. markets. The reason is that few buyers relocate to Taos for a job; most home purchasers are not in a rush to buy and get settled here. Now we are starting to see good homes going into contract in just a few weeks.
Pending Sales – The number of homes under contract for sale at the time of this report remained the same as last month at 22.
|Up to $200,000||40||44||190||66||44%||77||27%||6||30%|
|$200,001 – $300,000||33||40||109||37||25%||66||23%||4||20%|
|$300,001 – $400,000||36||42||69||20||13%||65||23%||4||20%|
|$400,001 – $500,000||27||29||39||12||8%||33||12%||1||5%|
|$500,001 – $650,000||25||24||35||9||6%||25||9%||4||20%|
|$650,001 – $800,000||16||16||27||4||3%||15||5%||1||5%|
|$800,001 – $1 million
Inventory – The inventory decreased again in January to an off-season low of 201 homes listed for sale. In 2017, the number of homes available for purchase during the year ranged from a low of 228 to a high of 329, averaging 285. That is approximately 45% fewer homes on the market than in 2008, when there was a high of 518 homes for sale. The inventory consists of a wide variety of price, style, location, and condition, so 285 units is not very many. It is often difficult to find more than 5-6 homes to show a buyer that meet most of his or her criteria. This has been a limiting factor on sales: if buyers don’t see a home they really like, they don’t buy. As noted above in the Days On Market section, most Taos buyers have no sense of urgency to buy.
The inventory shortage is affecting average prices, sales prices per square foot, price discounting and days on market!
How Home Sales Were Financed:
The percentage of homes financed with conventional loans has increased over the last three years, as conditions in the lending market have eased, and interest rates have remained very attractive.
Foreclosure Sales – There were two foreclosure sales in January 2018. The number of foreclosure sales, and their percentage of total sales of single-family homes, for the previous seven years were:
Currently, there are 8 bank-owned houses listed for sale; of those, one is under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both locally here in Taos and nationally.
January 2018 unit sales were 3 vs. 2 in January 2017. Dollar volume was up 41% from $431,000 to $607,400.
Full-year 2017 unit sales were 9.0% below 2016’s pace (61 vs. 67). But dollar sales were UP 4.3% at $14.87 million vs. $14.26 million.
The median price in 2017 was $215,000 vs. $188,000 in 2016 (+14.4%). The average (mean) price was up 14.5%, from $212,900 to $243,800.
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 2017, final sales price averaged 4.6% less than last asking price when the property went under contract. The average discount from original asking price was 6.6%. For the full year 2016, the discount from original price averaged 11.8%.
Inventory – The number of condos listed for sale increased slightly from 43 last month to 48 at the time of this report. However, of those 28 are at Taos Ski Valley, so there are only 20 condos available for purchase for buyers who don’t want the Ski Valley location. Of the 61 units that sold in 2017, nine were at Taos Ski Valley (15%).
As with homes, the lack of inventory is constraining sales. Last year’s highest inventory was 68 units for sale, which occurred in September. In 2006, there were often over 200 condos on the market at any given time.
|Current||Last||Sept.||# of||# of||# of|
|Up to $150,000||3||4||40||16||55%||11||18%||1||33%|
|$150,001 – $250,000||11||9||50||8||28%||29||48%||1||33%|
|$250,001 – $350,000||11||9||51||3||10%||10||16%||1||33%|
|$350,001 – $500,000||17||15||56||1||3%||9||15%||0||0%|
Pending Sales – There are four sales pending at the time of this report, an increase from only one last month.
Days On Market – For the full year 2017, the average days on the market was 195 compared to 259 for 2016 (-24%); in 2015 it was 328 days; in 2014, it was 237 days.
Cash Sales vs. Loans – Of the 61 condos that sold in 2017, 37 were cash sales (61%), and 24 were financed with a conventional loan (39%). Conventional loans for condos are more difficult to obtain than they were before the real estate bubble burst in 2008: the criteria for a Fannie Mae (FNMA) conforming loan are more stringently applied these days, so some condo projects do not qualify; even if the buyer is qualified, the lender won’t make the loan.
Foreclosure Sales – Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There was one sale in January 2018 vs. none in January 2017.
For the full year 2017, there were four sales vs. two in 2016. Total dollar volume for 2017 was $1,790,000 vs. $787,500 in 2016. Of the four sales in 2017, two were duplexes, one was a triplex, and one was a 28-slot mobile home park (which is not truly a multi-family residential property – it should probably be classified as improved land).
Currently, there are seven multi-family properties listed for sale; there is one pending sale.
Investor interest in multi-family should start to increase. The supply of long-term rentals in Taos is low because 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. On the other hand, as interest rates are starting to rise, investors will demand higher cap rates, which will reduce values unless rents increase commensurately, which they may.
Obtaining financing for multi-family properties of more than two units is difficult because the lack of sales means that there are not enough comparable sales for lenders: they generally require two comps in the past 12 months. The triplex that sold in 2017 was a cash purchase.
January 2018 land unit sales were 9 vs. 6 in January 2017 (+50%). Dollar volume increased from $347,000 to $1,138,300 (+228%).
2017 full-year unit sales were up 31% over 2016 (118 vs. 90 tracts sold). Dollar sales were up 61% ($10.6 million vs. $6.6 million).
Due to the limited inventory of single-family homes available for purchase, land sales are increasing as some people who want a home in Taos and who cannot find an existing home that suits them are opting to buy land and build. Additionally, there have been some sales of lots to builders.
The average median price for 2017 was $64,500, up 23% from $52,300 in 2016. The average (mean) price was up 23%, from $73,100 to $89,800.
The highest sale price in 2017 was $700,000, a 12.9-acre tract near Town zoned for four residential units per acre. A 30-acre rural-agricultural tract a few miles south of Taos center sold for $425,000. Of the 118 tracts that sold in 2017, 39 were $100,000 or greater. There were no commercial tracts sold last year.
Price Discounting – For the full year 2017, the final sales price averaged 12.1% less than last asking price; the discount from original asking price was 20.0%. This average was skewed by four sales: a 103-acre tract with original ask of $531,000, sold price of $162,500; a 10-acre tract originally listed at $325,000 that sold for $152,000; the 12.9-acre tract noted above which had an original price of $1 million and sold for $700,000; and a 151-acre rural parcel that had an original price of $425,000 and sold for $250,000. For the full year 2016, the discount from last asking price was 13.4%; the discount from original asking price was 22.4%.
The average days on market for the 118 tracts that sold in 2017 was 472 vs. 464 in 2016; in 2015 it was 605 days; in 2014 it was 390; in 2013 it was 465.
|Up to $50,000||144||143||42||47%||46||39%||4||44%|
|$50,000 – $100,000||190||186||31||34%||34||29%||3||33%|
|$250,001 – $300,000||14||15||2||2%||2||2%||0||0%|
There are currently 6 pending sales, down from 15 last month.
The inventory stayed the same at 527 tracts listed for sale. This equates to a 4.5-year supply at 2017’s absorption rate.
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 $46 million. In 2006, 296 tracts sold for a total of $42.7 million.
There was one commercial sale in January 2018 vs. none in January 2017.
For full-year 2017, there were five sales, totaling $2,851,000, compared to seven for the year 2016 that totaled $2,890,800.
In 2015, there were 17 sales, totaling $8.1 million. In 2014, there were just three sales, totaling $2.34 million.
Currently, there are 34 commercial properties listed for sale. Of these, five are under contract: an 8,750-square foot office/treatment center on the main thoroughfare south of town (asking price $1,150,000); a gallery/retail/residential complex on the main road just north of Taos Plaza (asking price $664,000); the old El Cortez Theatre and the old Post Office in Ranchos de Taos; and the RV park south of Town with an asking price of $350,000, and which has been under contract for years.