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 but are not part of the main Taos market. 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.
Single-family home sales in September were down by 4 units from September last year. Year-to-date sales are below last year by 6 units(3%).
Condo sales for September were down by 5 units. Year-to-date sales are ahead of last year by 6 units (17%).
Land sales for the past month were down by 3 . Year-to-date sales are up by 5 (6%) over last year.
Multi-family sales for the month were nil, the same as last year. Year-to-date sales are down by 2 from last year (2 vs. 4).
Commercial sales were also nil for the month, both this year and last. Year-to-date sales are up by 4 over last year (9 vs. 5).
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.
The shortage of adequate inventory of good homes available for purchase has been and is a major constraint on sales. Buyer interest continues to increase but the supply has not kept up with 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!
SFH are by far the largest segment of the Taos market. Through September of 2018, SFH account for 57% of transactions, and 76% of dollar sales.
September 2018 had 21 closed sales vs. 25 in September 2017 (-16%). However, dollar sales were up 5%. There was one big sale last month: the old Lineberry home and museum in town sold for $5.4 million. This transaction could have been classified as commercial. This was a co-listing by The Lora Company and Sotheby’s International Realty in Santa Fe. The buyer was Taos Pueblo. Here is a link to an article about it in The Taos News: https://www.taosnews.com/stories/taos-pueblo-purchases-storied-lineberry-estate,52106?
Year-to-date unit sales are 3% below last year (197 vs. 203 homes sold). But dollar sales are up 3% ($70.4 million vs. $68.0 million); there have been three sales over $1 million.
At this point in time, October 2018 unit sales look to be slightly higher than last October, so it appears that 2018 will end with the almost the same volume as last year. That would mean the market is still about 20% below the peak (2005) level of unit sales.
Median and Average Prices – Year-to-date the median price is $294,000 this year vs. $305,000 last year (-3.6%). Full-year 2017 median price was $300,000; in 2016 it was $283,500. Year-to-date 2018 average (mean) price is $357,300 vs. $335,200 last year (+6.6%). The full-year 2017 average was $326,800; in 2016 it was $306,100. In peak year 2005, the median was $290,500; the average was $333,500.
So far this year, the highest sale price was the $5.4 million sale noted above. It was followed by a home at $1,985,000,000, and one at $1,500,000. These three sales have pushed up the average price.
Price Discounting – Year-to-date, the actual selling price has averaged 6.0% less than the last asking price when the property went into contract; the average discount from original price is 11.6%. This metric is somewhat skewed by the $5.4 million sale: that property had an original price of $8.5 million. 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. 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. This year, we have seen prices rising faster as demand has picked up even more while supply has remained about the same. The median price is now approximately back to peak market level.
Days On Market – The average days on the market for all the homes that have sold year-to-date in 2018 is 152 vs. 201 for the same time frame last year (-24%). Well-priced homes in the more desired areas are definitely selling faster than in years past: In 2017, average DOM was 192; in 2016 it was 228; in 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. However, if today’s 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 25, down from 32 at last report a month ago.
|Up to $200,000||62||61||190||66||44%||77||27%||53||27%|
|$200,001 – $300,000||55||54||109||37||25%||66||23%||52||26%|
|$300,001 – $400,000||50||63||69||20||13%||65||23%||41||21%|
|$400,001 – $500,000||45||48||39||12||8%||33||12%||21||11 %|
|$500,001 – $650,000||32||33||35||9||6%||25||9%||19||10%|
|$650,001 – $800,000||30||32||27||4||3%||15||5%||5||2%|
|$800,001 – $1 million
Inventory – The inventory of homes listed for sale decreased from 328 last month (the high point for this year) to 309 at the time of this report; this is up 54% from a low point this year of 201 homes available 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. Current inventory is substantially less 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 today’s 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. And some homeowners are making good income from vacation rentals. The number of home rentals on sites such as airbnb.com and vrbo.com has exploded over the past several years. This is probably another reason owners are holding homes: positive net cash flow plus price appreciation.
How Home Sales Were Financed:
Foreclosure Sales – Through nine months of 2018, there have been 17 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 only 5 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.
September 2018 unit sales were 5 vs. 10 in September 2017. Dollar sales were down from $1, 531,000 to $1,170,900 (-23%). Sales prices ranged from$79,900 (an older studio unit on Kit Carson Road) to $400,000 (an upscale 2-bedroom unit on Upper Ranchitos Road).
Year-to-date, 41 condos have sold, a gain of 6 (17%) over 2017’s pace for the first nine months. Dollar sales are up from $7,020,300 to $10,378,100 (+48%). This is because of the 41 condos sold so far this year, 9 were at Taos Ski Valley (22%), where prices are higher; of the 35 condos sold through September last year, only three were at TSV (9%).
Year-to-date 2018 median price is $215,000 vs. $185,000 for the same period in 2017 (+16%). The median price for full-year 2017 was $215,000; in 2016 it was $188,000.
Year-to-date 2018 average (mean) price is $263,100 vs. $200,600 in 2017 (+26%). 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. If the current trend holds up, 2018 will probably finish with about the same units sold as last year, or a total for the year of about 60 units; this will be about 60% below peak-year volume.
Price Discounting – So far this year, final sales price has averaged 5.6% less than last asking price; the discount from original price is 6.3%. 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 decreased from 74 last month to 68 at the time of this report. However, 39 of those are at Taos Ski Valley (57% of available units); there are only 29 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 much more challenging than it was before the recession.
|Current||Last||Sept.||# of||# of||# of|
|Up to $150,000||2||3||40||16||55%||11||18%||11||27%|
|$150,001 – $250,000||16||20||50||8||28%||29||48%||14||34%|
|$250,001 – $350,000||20||20||51||3||10%||10||16%||7||17%|
|$350,001 – $500,000||26||26||56||1||3%||9||15%||6||15%|
Pending Sales – There were 8 sales pending at the time of this report, up from 5 last month.
Days On Market – Through September 2018, the average days on market is 102 compared to 199 for the same period in 2017 (-49%). 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 41 units sold so far in 2018, 22 were cash sales (54%), 18 were financed with a conventional loan (44%), and one was seller-financed (2%). 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 loans on the secondary market cannot do so without the Fannie guarantee.
Foreclosure Sales – So far in 2018 there has been only one foreclosure sale (2% of total units sold). Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There were no sales in September of 2018. Year-to-date in 2018 there have been two sales (one duplex, one triplex) with a total price of $414,000. Through nine months in 2017, there were four sales, with a total price of $1,790,000.
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 currently 8 multi-family properties listed for sale. There are no pending sales.
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, cap rates should hold or increase. The asking prices for many of the listed properties do not yield an adequate rate of return for most investors; this is probably the main reason for the lack of sales. Additionally, 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 appraisals: lenders generally require two comps in the past 12 months.
September 2018 unit sales were 11 vs. 14 in September last year (-21%); dollar volume decreased from $1,649,300 to $1,125,800 (-32%).
Year-to-date unit sales are up over last year by 5 tracts (96 vs.91), or 5.5%. Dollar sales are down 2% ($8,434,500 vs. $8,636,400).
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 but 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 September 2018, the median price is $64,000 compared to $65,000 in 2017 (-1.5%). For full-year 2017 it was $64,500, up 23% from $52,300 in 2016. Year-to-date 2018 average (mean) price is $87,900 vs. $94,900 in 2017 (-7.4%). 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 20.66-acre rural tract in the valley near Taos center that sold for $360,000; then 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 nine months of 2018, final sales price has averaged 10.4% less than the last asking price when the land sold; the discount from original price is 16.8%. 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 September this year is 439 vs. 477 for the same period last year (-8%). 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||168||167||42||47%||46||39%||40||42%|
|$50,000 – $100,000||186||199||31||34%||34||29%||31||32%|
|$250,001 – $300,000||16||17||2||2%||2||2%||2||2%|
The number of pending sales stayed the same as last month (13) at the time of this report.
The inventory decreased from 592 to 573 tracts listed for sale. This equates to a 4.9-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 September 2018 or 2017.
The year-to-date total is 9 sales vs. 5 for the same period last year. Year-to-date dollar sales are $3,119,000 vs. $2,851,000 last year through the first nine months (+9%). 2017 finished at that amount. 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 37 commercial properties listed for sale. Of these, three are under contract: an 8,750-square foot office/treatment center on the main thoroughfare south of town (asking price $1,150,000); a commercial condo on Gusdorf Road with an asking price of $229,000; 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. Two properties that were under contract last month are 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 weak. The local general economy has not recovered as much as the national economy.