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.
February 2018 single-family home unit sales were the same as February last year; however, dollar sales were down 20%. Buyer interest continues to increase while inventory remains very limited. The supply of good homes isn’t adequate to satisfy the demand. Homes in preferred locations are selling faster, and prices are rising. Even homes in less-popular areas are selling faster.
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TOTAL MARKET (single-family homes, condos, multi-family, land, commercial)
Year-to-date through February (2018 vs. 2017)
# of Closed Sales UP from 50 to 69 (+38%)
Dollar Sales UP from $12.2 million to $15.4 million (+27%)
As the second of these two charts shows, since bottoming out in 2011-2012, the overall market through 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 sales have not recovered as much as single-family homes.
For the full year 2017, the number of houses sold was up over 2016 by 14% (284 vs. 249). Dollar sales were up 22%, 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.
Year-to-date through February unit sales are up 15% over last year (38 vs. 33 homes sold). Dollar sales are up 21% ($11.5 million vs. $9.6 million).
Average Prices – Through February, the median price is $245,000 this year vs. $210,000 last year (+17%). The full-year 2017 median price was $300,000 vs. $283,500 in 2016. The year-to-date average (mean) price is $303,300 this year vs. $289,700 last year (+5%). The full-year 2017 average was $326,800 vs. $306,100 in 2016. Prices are rising, and we are also seeing an increasing number of sales of higher-priced homes.
Price Discounting – Year-to-date, the actual selling price has averaged 5.9% than the last asking price when the property went into contract; the average discount from original price is 10.8%. 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. Of course, prices in the most preferred areas have risen more than others. On average, prices now are about 10% – 15% below peak market levels.
Days On Market – The average days on the market for all the homes that have sold year-to-date in 2018 is 156 vs.185 for the same time frame last year. The statistical sample is too small to make a projection for the year; however, it does seem as if homes are selling faster than in years past! In 2017, average DOM was 192; in 2016 it was 228. However, these statistics must be qualified: Due to a Taos MLS rule change, in some cases listings got a new MLS number with days-on-market re-set to zero even though they were on the market continuously. This has happened in a number of instances, and it has somewhat compromised the accuracy of the days-on-market statistic.
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 faster: if buyers find a home that works for them, they are taking action rather than assuming that the home or an acceptable substitute will be available later.
Pending Sales – The number of homes under contract for sale at the time of this report was 21, down from 22 last month.
|Up to $200,000||38||40||190||66||44%||77||27%||13||34%|
|$200,001 – $300,000||39||33||109||37||25%||66||23%||10||26%|
|$300,001 – $400,000||37||36||69||20||13%||65||23%||5||13%|
|$400,001 – $500,000||27||27||39||12||8%||33||12%||3||8%|
|$500,001 – $650,000||25||25||35||9||6%||25||9%||6||16%|
|$650,001 – $800,000||14||16||27||4||3%||15||5%||1||3%|
|$800,001 – $1 million
Inventory – The inventory increased slightly in February to 206 homes listed for sale from a low point of 201 last month. 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 substantially fewer homes 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 current inventory is not much to work with. It is often difficult to find more than 5-6 homes to show a buyer that might 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, buyers’ financial positions have strengthened as the economy has improved, and interest rates have remained very attractive.
Foreclosure Sales – Through the first two months of 2018, there have been six foreclosure sales (16% of total units sold). The number of foreclosure sales, and their percentage of total sales of single-family homes, for the previous seven years were:
Currently, there are 7 bank-owned houses listed for sale; of those, three are under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both locally here in Taos and nationally.
February 2018 unit sales were 2 vs. 3 in February 2017. Dollar sales were down from $803,000 to $210,500 (-74%).
Year-to-date, 5 condos have sold, the same as in 2017. Dollar sales are down from $1.2 million to $817,900 (-34%). Full-year 2017 unit sales were below 2016’s pace by 9% (61 vs. 67). But dollar sales were UP 4.3% at $14.87 million vs. $14.26 million.
Year-to-date 2018 median price is $162,500. The median price for full-year 2017 was $215,000; in 2016 it was $188,000.
Year-to-date 2018 average (mean) price is $303,300. For full-year 2017 it was $243,800; in 2016 it was 212,900.
With only five sales so far this year, median and average prices are not very meaningful.
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 – So far this year, final sales price has averaged 6.2% less than last asking price; the discount from original price is 6.8%. For the full year 2017, final sales price averaged 4.6% less than last asking price; 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 from 48 last month to 52 at the time of this report. However, of those 32 are at Taos Ski Valley (62%), 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, only nine were at Taos Ski Valley (15%). As with homes, the lack of inventory is constraining sales. 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||3||40||16||55%||11||18%||2||40%|
|$150,001 – $250,000||12||11||50||8||28%||29||48%||2||40%|
|$250,001 – $350,000||14||11||51||3||10%||10||16%||1||20%|
|$350,001 – $500,000||17||17||56||1||3%||9||15%||0||0%|
Pending Sales – There are 3 sales pending at the time of this report, a decrease from four last month.
Days On Market – Through February 2018, the average days on market was 130. For the full year 2017, the average days on the market was 195 compared to 259 for 2016; in 2015 it was 328 days; in 2014, it was 237 days.
Cash Sales vs. Loans – For the 5 units sold so far in 2018, 2 were cash sales, and 3 were financed with a conventional loan. In 2017, 61% were cash sales, and 39% were financed with a conventional loan. 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, some lenders won’t make the loan.
Foreclosure Sales – So far in 2018 there has been one foreclosure sale. Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There were no sales in February of 2018 or 2017. Year-to-date in 2018 there has been one sale vs. none in 2017.
For the full year 2017, there were four sales; in 2016 there were two. Total dollar volume for 2017 was $1,790,000; in 2016 it was $787,500. 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 have been classified as improved land).
Currently, there are six multi-family properties listed for sale; there are no pending sales.
Investor interest in multi-family should start to increase. The supply of long-term rentals in Taos is very 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, i.e. rate of return on investment) 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.
February 2018 unit sales were 14 vs. 5 in February 2017 (+180%). Dollar volume increased from $291,000 to $1.5 million (+398%). Year-to-date unit sales are up 109% (23 vs. 11). Dollar sales are up 306% ($2.6 million vs. $638,000).
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.
Through February 2018, the median price is $68,500. For full-year 2017 it was $64,500, up 23% from $52,300 in 2016. Year-to-date 2018 average (mean) price is $112,500. Full-year 2017 average was $89,800.
The highest sale price so far this year was $350,000 for a 0.4-acre home site at Taos Ski Valley. It was followed by $340,200 for a 1-acre residential lot near Taos Plaza that is zoned 14 units per acre but could also be a couple of high-end single-family home sites.
Price Discounting – Through the first two months of 2018, final sales price has averaged 9.1% less than the last asking price; the discount from original price is 16.2%. For full-year 2017, 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 23 tracts sold so far this year is 382. For the full year 2017, average DOM 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||145||144||42||47%||46||39%||9||39%|
|$50,000 – $100,000||195||190||31||34%||34||29%||7||30%|
|$250,001 – $300,000||15||14||2||2%||2||2%||0||0%|
There are currently 8 pending sales, up from 6 last month.
The inventory increased from 527 to 542 tracts listed for sale. This equates to a 4.6-year supply at 2017’s absorption rate.
Although land sales are picking up, 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 February 2018, bringing the year-to-date total to two, a gain of one over the same period last year. But year-to-date dollar sales are only $320,000 vs. $730,000 in 2017.
For full-year 2017, there were five sales, totaling $2,851,000. In 2016 there were seven totaling $2.9 million. In 2015, there were 17 sales, totaling $8.1 million. In 2014, there were just three sales, totaling $2.3 million.
Currently, there are 32 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.