Note: The data in The Lora Company report do not include Angel Fire, Black Lake, Cimarron, Eagle Nest, Red River, Raton, Chama, Miami, Mora, San Miguel, Vallecitos, 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; but we feel that they are separate and distinct markets, so they are not included in our report on the main Taos market.
Monthly single-family home unit sales were down for the second month in a row. June 2018 unit sales were below June of last year by 7 units (23%). The ongoing problem of low inventory of homes available for purchase is the limiting factor. Buyer interest continues to increase while the supply of good homes for sale 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.
IF YOU HAVE BEEN THINKING ABOUT SELLING YOUR HOME, NOW IS A GREAT TIME!
CALL US AT THE LORA COMPANY FOR A FREE CONSULTATION AND MARKET ANALYSIS!
June condo sales were also down, by 2 units. Land sales were up by 4 lots. Commercial sales were down by 2.
YEAR-TO-DATE TOTAL MARKET (single-family homes, condos, multi-family, land, commercial)
# of Closed Sales UP from 211 to 220 (+4.3%)
Dollar Sales UP from $54.75 million to $54.80 million (+0.1%)
As the second of these two charts shows, since bottoming out in 2011-2012, the total market through 2017 gained 105% in unit sales, and 130% in dollar sales. At this point, it looks as if 2018 will finish about the same as 2017.
SFH are by far the largest segment of the Taos market. In 2017, SFH accounted for 60% of total MARKET transactions, and 76% of dollar sales. Through June of 2018, SFH account for 55% of transactions, and 71% of dollar sales.
June 2018 had 23 closed sales vs. 30 in June 2017 (-23%). Dollar sales were down 27%. Year-to-date unit sales are down 4.7% compared to last year (122 vs. 128 homes sold). Dollar sales are down 6.8% ($38.81 million vs. $41.64 million).
The year 2017 saws a gain over 2016 of 14% in the number of houses sold, and a gain of 22% in dollar sales. The gain last year would have been even greater if there had been more good homes available for purchase. Likewise, 2018 growth is being constrained by lack of inventory. This year may end up with no gain over last year if current trend continues. If 2018 ends with the same volume as last year, we will still be about 20% below peak (2005) level of sales.
Average Prices – Year-to-date the median price is $292,500 this year vs. $298,500 last year (-2.0%). Full-year 2017 median price was $300,000 vs. $283,500 in 2016. The year-to-date 2018 average (mean) price is $318,100 vs. $325,300 last year (-2.2%). The full-year 2017 average was $326,800 vs. $306,100 in 2016. In peak year 2005, the median was $290,500; the average was $333,500.
So far this year, the highest sale price was $990,000. There have been two sales in the $700,000’s; four in the $600,000’s.
Price Discounting – Year-to-date, the actual selling price has averaged 4.8% less than the last asking price when the property went into contract; the average discount from original price is 8.6%. 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 couple of years, then they started to increase, mainly 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% 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 167 vs. 202 for the same time frame last year (-17%). 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; nevertheless, we do see homes selling faster than in years past!
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. 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. But now if buyers find a home that works for them, they are taking action rather than assuming that the home they like 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 22, down from 26 last month and 27 in the month prior.
|Up to $200,000||46||45||190||66||44%||77||27%||35||29%|
|$200,001 – $300,000||47||44||109||37||25%||66||23%||28||23%|
|$300,001 – $400,000||54||50||69||20||13%||65||23%||30||25%|
|$400,001 – $500,000||45||43||39||12||8%||33||12%||9||7%|
|$500,001 – $650,000||31||30||35||9||6%||25||9%||16||13%|
|$650,001 – $800,000||31||23||27||4||3%||15||5%||3||2%|
|$800,001 – $1 million
Inventory – The inventory of homes listed for sale increased again, from 270 last month to 291 at the time of this report; this is up 45% from a low point of 201 in January. 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 during the early 2000’s; for example, in 2008 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 a lot 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. The inventory shortage is affecting total sales, average prices, sales prices per square foot, price discounting and days on market.
One reason for the reduced inventory is that there is almost no “spec” building happening, in which a contractor builds a home to list for sale (rather than “custom” building, where the contractor builds for an owner of a lot). Another reason may be that property owners who financed purchases at extremely low interest rates are holding the property in the expectation that price appreciation is greater than financing and other holding costs.
How Home Sales Were Financed:
Foreclosure Sales – Through the half of 2018, there have been 11 foreclosure sales (9% 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 12 bank-owned houses listed for sale; of those, 5 are under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both locally here in Taos and nationally.
June 2018 unit sales were 4 vs. 6 in June 2017. Dollar sales were down from $1,203,000 to $540,000 (-55%). The highest sale was $193,000 for a 2-bedroom unit near the Taos Spa health club.
Year-to-date, 24 condos have sold, a gain of 4 (20%) over 2017’s pace for the first six months. Dollar sales are up from $4.43 million to $7.05 million (59%). Full-year 2017 unit sales were below 2016’s pace by 9% (61 vs. 67). But dollar sales were up 4.3% ( $14.87 million vs. $14.26 million).
Year-to-date 2018 median price is $270,000 vs. $206,500 for the same period in 2017 (+31%). The median price for full-year 2017 was $215,000; in 2016 it was $188,000.
Year-to-date 2018 average (mean) price is $293,900 vs. $221,600 in 2017 (+33%). For full-year 2017 it was $243,800; in 2016 it was $212,900.
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. 2018 will probably finish at about 50% below peak-year volume.
Price Discounting – So far this year, final sales price has averaged 4.5% less than last asking price; the discount from original price is 5.3%. 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 65 last month to 68 at the time of this report. However, 36 of those are at Taos Ski Valley (53% of inventory); there are only 32 condos available for purchase for buyers who don’t want the Ski Valley location. 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. However, inventory is not the only reason for lackluster sales: there just doesn’t seem to be as much buyer interest in condos as there was before the real estate recession. Additionally, condo financing is more challenging than it was before the recession.
|Current||Last||Sept.||# of||# of||# of|
|Up to $150,000||4||5||40||16||55%||11||18%||6||25%|
|$150,001 – $250,000||15||20||50||8||28%||29||48%||5||21%|
|$250,001 – $350,000||17||15||51||3||10%||10||16%||6||25%|
|$350,001 – $500,000||27||20||56||1||3%||9||15%||4||17%|
Pending Sales – There were 3 sales pending at the time of this report, down from 5 last month.
Days On Market – Through June 2018, the average days on market is 111 compared to 187 for the same period in 2017 (-41%). 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 24 units sold so far in 2018, 14 were cash sales (58%), 9 were financed with a conventional loan (38%), and one was seller-financed. 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; therefore, even if the buyer is qualified, lenders who sell their loan on the secondary market cannot do so without the Fannie guarantee.
Foreclosure Sales – So far in 2018 there has been only one foreclosure sale (4% of total units sold). Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There were no sales in June of 2018 or 2017. Year-to-date in 2018 there have been two sales (one duplex, one triplex) vs. three through six months 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 probably should have been classified as improved land).
There are now 12 multi-family properties listed for sale, up from 10 last month. There is one pending sales — a large 4-unit property (over 5,000 square feet) on over an 1.2 acres.
Investor interest in multi-family property should start to increase. The supply of long-term rentals in Taos is very low because many rental 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, with interest rates starting to rise, investors will demand higher cap rates, which will reduce values. But with rents rising, property values should hold.
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.
June 2018 unit sales were 13 vs. 9 in June last year (+44%); however, dollar volume decreased from $1,218,900 to $1,009,400 (-17%).
Year-to-date unit sales are up over last year by 16% (64 vs. 55 closed sales). Dollar sales are up 48% ($6.30 million vs. $4.25 million).
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 starting to increase 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, a few “spec” builders are buying land. But land sales are still about 60% below peak (2005) level.
Through June 2018, the median price is $68,800 compared to $55,000 in 2017 (+25%). For full-year 2017 it was $64,500, up 23% from $52,300 in 2016. Year-to-date 2018 average (mean) price is $98,500 vs. $77,300 in 2017 (+27%). Full-year 2017 average was $89,800.
The highest sale price so far this year was $537,500 for a 0.33-acre home site at Taos Ski Valley. It was followed by a 0.4-acre residential lot at TSV that sold for $350,000, and by 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, which sold for $340,200.
Price Discounting – Through the first six months of 2018, final sales price has averaged 10.0% less than the last asking price when the land sold; the discount from original price is 17.2%. For full-year 2017, final sales price averaged 12.1% less than last asking price; the discount from original asking price was 20.0%. For the full year 2016, the discount from last asking price was 13.4%; the discount from original asking price was 22.4%. In each of the past few years, there have been several high-dollar sales at huge discounts that have skewed the averages somewhat.
The average days on market through June this year is 406 vs. 610 for the same period last year (-33%). For the full year 2017, average DOM was 472; in 2016 it was 464; in 2015 it was 605 days; in 2014 it was 390; in 2013 it was 465.
|Up to $50,000||155||164||42||47%||46||39%||23||36%|
|$50,000 – $100,000||201||217||31||34%||34||29%||21||33%|
|$250,001 – $300,000||15||18||2||2%||2||2%||2||3%|
The number of pending sales increased from 14 to 19 at the time of this report.
The inventory decreased 5% from 619 to 589 tracts listed for sale. This equates to a 4.3-year supply at this year’s projected 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 were no commercial sales in June 2018 vs. two in June 2017.
The year-to-date total is 8 sales vs. 5 for the same period last year. Year-to-date dollar sales are $2,219,000 vs. $2,851,000 last year through the first six months (-22%); that turned out to be the total for the full year last year. In 2016 there were seven sales 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 35 commercial properties listed for sale. Of these, four are under contract: the former Van Vechten – Lineberry Museum with an asking price of $3.5 million (being handled by a broker in our company); an 8,750-square foot office/treatment center on the main thoroughfare south of town (asking price $1,150,000); the Dreamcatcher B & B, with an asking price of $995,000; and the RV park south of Town with an asking price of $350,000. This property has been under contract for years; a “dollar store” company is the buyer, but there is a lengthy due diligence/approval process. The building that housed the Century 21 real estate office for many years, located on the main commercial thoroughfare (asking price $315,000) had been under contract but is back on the market.
The peak year for commercial sales was 2005, when 19 properties sold, with a total sales price of $8,735,600. The Taos commercial market is still pretty tepid. The local general economy has not recovered as much as the national economy.