Note:   The data in The Lora Company report do not include Angel Fire, Eagle Nest, Red River and other areas that are in the Taos County Association of Realtors MLS, but that we don’t consider part of the main Taos market.

For the first four months of the year:

Total market (all categories of property) – The number of closed transactions is 145 in 2020 vs. 136 last year, a gain of 9 sales (7%).  Total dollar sales are $47.7 million vs. $37.2 million, an increase of $10.5 million (28%).  The large increase is mainly due to one sale: a ranch in El Rito that added $7 million to the total.

Single-family homes – Unit sales up 12 houses (16%).  Dollar sales up 18%.  SFH are 61% of total market transactions, 66% of dollar sales.

Condos – Unit sales down 5 condos (-24%).  Dollar sales down 25%.  Condos are 11% of total transactions, and 11% of dollar sales.

Land – Unit sales up 1 tract (3%).  Dollar sales up 241%.  Land is 25% of total transactions, and 21% of dollar sales.

Commercial – Unit sales down 1 (33%).  Dollar sales down 9%.  Commercial sales are 1% of total transactions, and 1% of dollar sales.

It is still unclear what impact the Covid-19 pandemic will have on Taos real estate sales.  Prior to the pandemic, we were expecting 2020 to continue the same trends as in 2018-2019: strong interest in single-family homes and condos but with sales constrained by lack of inventory; gradually increasing interest in land; marginal improvement in commercial.  With the unknown duration of the health emergency and its full impact on the national economy, the market this year may be somewhat negatively impacted: buyers may be reluctant to travel; and they may postpone purchasing property if they have suffered major economic damage due to loss of income, declines in the stock market, etc.  Although single family home sales are up 15% through April, it look as if May sales will be less than last May.  However, over time the pandemic may actually boost Taos real estate sales, as people seek a home in a less populous area for future emergencies.  Living in Taos during the crisis has certainly been easier than in large cities!

Click here for detailed year-to-date data.

Click here for a chart with data for the past 15 years.

The second chart shows that, since bottoming out in 2011, the total market (all categories of property) through 2019 had recovered 130% in unit sales, but was still about 38% below peak year 2005 unit sales.  Dollar sales had recouped 170% from the bottom, but were still about 30% below peak year 2006 volume. Average prices for homes and condos were about back to peak levels, but land prices are still well below.

Following is a detailed discussion of each market segment:

SINGLE-FAMILY HOMES

April 2020 unit sales were up by 9 homes over April last year: 29 vs. 20 closed transactions (+45.0%).  Dollar sales for the month were only up 10.4%. There were more high-dollar sales in April 2019, including one at $1.65 million.  In May 2020, the highest sales price was $840,000, followed by one at 750,000, two in the mid-$500,000’s, and two in the $400,000’s.

Year-to-date unit sales are ahead of last year’s pace by 12 homes: 89 vs. 77, an increase of 15.6%.  The inadequate supply of homes for sale that has plagued the market for the past several years continues to be a constraint on sales.  Dollar sales are up by 18% ($31.3 million vs. $26.6 million).

Median and Average Prices – For the first  four months of 2020, the median price is $320,000 vs. $327,500  for the same period last year, a decrease of $7,500 (-2.3%).   The average price year-to-date is up $6,600 (+1.9%) at $352,000 vs. $345,400 last year.  Here is a chart showing the trend in median and average prices over the past several years, and what they were in peak year 2007:

Price          2007        2016       2017         2018          2019        2020 YTD

Median   $325,000  283,500   300,000    311,000     322,500      320,000

Average $379,900   306,100   326,800    370,500    373,100       352,000

Price Level – Prices of single-family homes fell 30%–35% from the market peak in 2007 to a bottom in 2011.  Prices were basically flat for a few years, then they started to increase slowly, and mainly in the most preferred areas.  By 2015 prices were starting to rise in most cases as buyer interest began to pick up.  The rate of price rise has increased steadily over the past four years, as demand has continued to grow, while supply has steadily declined. Prices are now about equal to peak levels of 2007.  The trend should continue, as demand is expected to remain greater than supply.

Price Discounting – For the year to date, actual sales price has averaged  5.6% below the last asking price when the home went under contract; however, the discount from original asking price is 8.7%.  Some homes were overpriced when first listed, and had one or more price reductions before selling.  However, the trend of more demand than supply has caused the discount from original price to decrease from 2013 to 2019; it’s too early to estimate how 2020 will play out:

2013        2014     2015    2016    2017     2018     2019    2020 YTD

18.4%      16.9%   13.9%  13.3%  9.4%   10.3%     7.8%      8.7%

Days On Market – The average days on the market so far in 2020 is 162 vs. 158 for the same time frame in 2019, a marginal increase of 2.5%.  Good homes in the preferred locations, especially those in the low- and mid-price range, are selling faster than in years past.  Days on market has always been relatively high in Taos, even during the boom years of the early 2000’s.  However, this metric has decreased a lot over the past three years.  Today if buyers find a home that works for them, many are taking immediate action rather than assuming that the home they like — or an acceptable substitute — will be available later.  This chart illustrates DOM in peak year 2006, in the past seven years, and this year to date:

2006 2013 2014 2015 2016 2017 2018 2019 2020

247    244    235   235  226   192   147   151   162

Here is a chart indicating inventory and sales by price segment:

INVENTORY					UNIT	SALES
	May 2020	May 2019	Sep 2008	…….	2011		……	2019		…..	2020	YTD	……
					#	%		#	%		#	%			.
Up to $200,000	49	48	190		66	44%		58	22%		16	18%
$200,001 – $300,000	40	46	109		37	25%		63	23%		21	24%
$300,001 – $400,000	46	47	69		20	13%		74	27%		27	31%
$400,001 – $500,000	23	36	39		12	8%		27	10%		10	11 %
$500,001 – $650,000	30	27	35		9	6%		24	9%		10	11%
$650,001 – $800,000	24	21	27		4	3%		16	6%		2	2%
$800,001 – $1million	8	13	36		1	1%		4	1%		2	2%
Over $1,000,000	26	19	13		1	1%		4	1%		1	1%
TOTAL	246	257	518		150	100%		282	100%		89	100%

Inventory –   At the time of this report, there were 246 homes listed for sale, up 1% from 243 last month, but down 4% from 257 in May a year ago.  The highest inventory last year was 314 in August.  In September of 2008, there were 518 homes listed for sale.  The average inventory decreased steadily from 2013 to 2018; it stabilized in 2019, but it is still way below pre-recession levels; and it is unlikely that 2020 will see a significant increase in homes on the market.  We may not even see usual seasonal inventory increase as as we head into the main summer selling season: some sellers may decide to wait to list their property due to the Covid-19 situation.

Here is  chart showing average inventory for the past seven years and the current number of homes listed for sale:

2013       2014       2015       2016       2017       2018       2019       2020

334          333         324         316         285        264          274         246

Taos inventory consists of a wide variety of size, price, style, location, and condition, so the current inventory is not a lot of properties to work with.  It is often difficult to find more than 4-5 homes to show a buyer that might meet most of his/her criteria.   The inventory factor is definitely affecting total sales, as well as average prices, price per square foot, price discounting and days on market.

One reason for the reduced inventory is that property owners who in earlier times would have sold their Taos homes when they no longer used them are now holding them as rental property. The number of home rentals on sites such as Airbnb.com and vrbo.com has exploded over the past several years. The anecdotal evidence is that property owners are achieving good net income with vacation rentals—at least they were before Covid-19 started crushing the travel industry!  If owners financed purchases at favorable interest rates and if they can generate strong rental income, they can achieve positive net cash flow plus price appreciation; therefore it makes sense to hold the asset as part of an investment portfolio.

Another factor is that there has been very little “spec” building (in which a contractor builds a home on his own lot to sell for profit) over the past several years. However, even if there were the same number of spec houses being built today that occurred in the 1990’s and early 2000’s, it would not amount to more than maybe an additional 20 homes in inventory at any given time.

How Home Purchases Were Financed:

	2011		2016			2019		2020 YTD
Cash	65	43%	91	36%		99	37%	29	33%
Conventional loan	66	44%	129	52%		143	53%	50	56%
FHA loan	8	5%	11	4%		11	4%	4	4%
VA loan	1	1%	10	4%		9	3%	4	4%
Seller financing	8	5%	7	3%		6	2%	0	0%
Other	2	1%	1	1%		3	1%	2	2%
Total	150	100%	249	100%		271	100%	89	100%

Interest Rates – Interest rates on residential loans remain very low by historical standards.  Although they have inched up in the past month, they are expected to remain very low in 2020. The Covid-19 emergency had created widespread volatility in financial markets during April, but interest rates have settled down recently, and as the pandemic crisis is gradually diminishing, volatility should be limited.

Here are current rates provided by local mortgage broker Adam Consiglio (NMLS 1748512) at C & M Financial (tel 505-263-6477), a.consiglio@candmfinancial.com:

Conventional 30-year fixed:           3.500 %  (Nominal)  3.534 % (APR)

Conventional 15-year fixed:           3.000 %                    3.060 %

Jumbo  30-year fixed:                    3.625 %                    3.722 %

Jumbo 15-year fixed                      3.375 %                    3.549 %

Note: Interest rates are impacted by occupancy, credit score, and down payment.

Foreclosure Sales –  Through April of this year, there have been two foreclosure sales (2.2% of total sales).  The number of foreclosures has diminished steadily over the past several years, both in Taos and nationally.  There could be a spike in foreclosures nationally due to high unemployment and business closures caused by Covid-19; however, we do not think there will be a surge in foreclosures in Taos.

This table shows the number of foreclosure sales, and their percentage of total sales of single-family homes, for the previous nine years:

2011	44	(29%)
2012	55	(28%)
2013	37	(16%)
2014	50	(22%)
2015	34	(13%)
2016	34	(14%)
2017	29	(10%)
2018	24	(  9%)
2019	17	(  6%)
2020 YTD	2	(  2%)

Currently, there are 10 bank-owned houses listed for sale; three of these are under contract.

CONDOMINIUMS

Note:  These data do not include any of the condominiums developed at and adjacent to The Blake Hotel by the Taos Ski Valley resort owner; those condos are not listed in the Taos MLS.

April was another down month, with 6 closed sales vs. 10 in April 2019 (-40.0%).  Dollar sales were down 52.0%.  Year-to-date unit sales are 16 vs. 21 last year (-23.8).  Year-to-date dollar sales are down 25.3% at $5,253,600 this year vs. $7,035,000 last year.  Sales prices have ranged from $131,000 – $620,000.

Median price YTD is $316,000 this year vs. $365,000 last year, a decrease of $49,000 (-13.4%).  Median price for the full year 2019  was $230,000.  Peak median price (in 2007) was $263,000. 

Average (mean) price YTD is $328,400 this year vs. $335,000 last year, a decline of $6,600 (-2.0%).  Average price for the full year 2018 was $265,800; in 2007, average price was $279,100.

Although the median and average prices are down so far this year, 16 sales are not enough to predict a trend.  As with single-family homes, condo prices have been generally rising, primarily due to the same inventory situation of more demand than supply. 

Price Discounting – So far this year, final sales price has averaged 2.8% less than last asking price when the condo went under contract; the discount from original price is 3.4%.  For the full year 2019, final sales price averaged 5.5% less than last asking price; the average discount from original asking price was 6.5%.

Inventory – The number of condos listed for sale at the time of this report was 43, down 2% from 44 last month, and down 27% from 59 in the same month a year ago.   The highest inventory in 2019 was 65 available for sale (in July and August).  2018’s peak inventory was 74 units.  Of the 43 units currently available for purchase, 30 (70%) are at Taos Ski Valley, while 13 are in or near the Town of Taos; those 13 include a variety of size, age, style and price.  There is only one studio (smaller than 1-bedroom), and it is priced at $115,000; only one 1-bedroom, and it is  priced at $195,000; nine 2-bedrooms priced from $185,000 – $459,000.  As with single-family homes, the lack of inventory is a constraint on sales.  In 2006, there were often over 200 condos on the market at any given time, with the majority in or near central Taos.

Scarce inventory is not the only reason for lower sales:  Conventional loans for condos are more difficult to obtain than they were before the financial crisis of 2008: the criteria for a Fannie Mae (FNMA) conforming loan are more stringently applied these days, and some condo projects do not qualify; therefore, even if the buyer is qualified, lenders who need the Fannie guarantee to be able to sell their loans in the secondary market won’t make a loan on these “non-warrantable” condos.

Foreclosure Sales –  There have been no foreclosure sales so far this year.  In 2019 there was only one condo foreclosure sale out of 79 units sold.  Currently, there are no foreclosed condos listed for sale.

Here is a chart indicating inventory and sales by price segment:

			—–	—–	UNIT	SALES	——-	—–
	—–INVENTORY—–				2011			2019		2020
					full	year		full	year	YTD
	May	May	Sept.		# of			# of		# of
	2020	2019	2008		Sales	%		Sales	%	Sales	%
Up to $150,000	2	3	40		16	55%		11	14%	1	6%
$150,001 – $250,000	11	17	50		8	28%		37	47%	6	37%
$250,001 – $350,000	10	18	51		3	10 %		10	12%	2	13%
$350,001 – $500,000	18	18	56		1	3%		19	24%	5	31%
Over $500,000	2	3	29		1	3%		2	3%	2	13%
TOTAL	43	59	226		29	100%		79	100%	16	100%

Like single-family homes, many condo owners are holding their property as investments yielding attractive returns from rentals, thus reducing supply of condos listed for sale.

How Condo Purchases Were Financed:

	2011		2016			2019		2020 YTD
Cash	14	48%	34	51%		37	47%	12	75%
Conventional loan	15	52%	32	48%		38	48%	4	25%
Seller financing	0	0%	0	0%		0	0%	0	0%
Other	0	0%	1	1%		4	5%	0	0%
Total	29	100%	67	100%		79	100%	10	100%

 

MULTI-FAMILY

Multi-family has always been a very small portion of the Taos market. There have been just two multi-family sales during the first four months in 2020, up from none during the same time period last year.  These two sales totaled $442,000.  For the full year 2019 there were three sales, with total dollar volume of $810,000.  In 2018, there were four sales, with a total price of $1,847,000.  2017 had four sales, totaling $1,790,000.  Since 2004, the highest number of sales was 8 in 2005. 

There are currently 7 multi-family properties listed for sale.  There are no pending sales.

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, which should make the investment returns on multi-family properties attractive.  However, financing properties larger than a duplex is challenging due to the lack of comparable sales.

LAND

April 2020 units sales were 10 vs. 12 in April last year (-16.7%).  Dollar sales were up hugely (755%), due to one sale of a ranch which was reported at $7 million.  A land sale over $1 million is extremely rare in Taos.  Excluding that one sale, April dollar sales were $560,000 vs. $884,500 in April 2019, a decrease of $324,500 (36.7%).

For the year to April 30, there have been 36 tracts have sold, up 1 (2.9%) from the same time period of last year.  Dollar sales are up 241%, from $3.0 million to $10.1 million, again due to the one sale of $7 million.  Excluding that one sale, YTD dollar volume is $3,117,500 this year vs. $2,900,400 last year, a gain of $217,100 (7.5%).  Excluding the ranch sale, prices have ranged from $12,000 – $390,000 (a 0.9-acre lot at Taos Ski Valley).

Median price year-to-date is up $19,500 (32.5%) from $60,000 last year to $79,500 this year.  The $7 million sale doesn’t really affect median price.  Average (mean) price is up $196,200 (231%) with the ranch sale included; with the ranch sale excluded, average price is $89,100 this year to date compared to $84,800 last year, an increase of $4,300 (5.1%).

Price             2007        2016       2017       2018          2019     2020 YTD*

Median      $ 89,000     52,300   64,500     62,700       65,000      79,500

Average    $128,000    73,100    89,800    92,300        85,400     89,100

*excluding the $7 million sale

Land sales are slowly recovering from the recession, but they haven’t come back nearly as much as residential sales have.  From a low point of 41 transactions in 2011, 2019’s total of 152 sales was a gain of 270%, but that was still 56% below peak (2005) sales of 339 tracts.  Even if 2020 were to end the year with a gain of 20% in units sold over 2019, then total units sold in 2020 would be 182, which would still be 46% fewer than peak year sales of 339 tracts.

One reason for sluggish land sales is that the cost to buy land and build a home is still significantly greater than the price of an existing home, even though prices of existing homes are rising.  However, the inadequate inventory of homes available for purchase may start to drive more land sales: buyers who cannot find a suitable existing home may opt to buy land and build.

Here is a chart indicating inventory and sales by price segment:

		UNITS				SOLD
——INVENTORY—–				2017			2019		2020 YTD
	Current  Month	Same Month Last Year		#	%		#	%	#		%
Up to $50,000	131	141		46	39%		63	41%	14		39%
$50,000 – $100,000	161	154		34	29%		45	30%	11		31%
$100,001 -$150,000	59	76		16	14%		21	14%	4		11%
$150,001-$200,000	41	37		15	13%		9	6%	4		11%
$200,001– $250,000	25	35		3	2%		9	6%	1		3%
$250,001 – $300,000	17	18		2	2%		3	2%	0		0%
Over $300,000	52	49		2	2%		2	1%	2		5%
TOTAL	486	510		118	100%		152	100%	36		100%

At current sales pace, the inventory of 486 tracts for sale equals about a 3-year supply.

How Land Purchases Were Financed:

	2011		2016			2019		2020 YTD
Cash	28	69%	63	70%		111	73%	31	86%
Conventional loan	5	12%	6	7%		19	13%	1	3%
Seller financing	7	17%	20	22%		20	13%	2	5%
Other	1	2%	1	1%		2	1%	2	5%
Total	41	100%	90	100%		152	100%	36	100%

 

COMMERCIAL

For the year to April 30, there have been two commercial sales, down one from the same period in 2019.   Both sales this year were commercial condos on the south side of Taos.  Total dollar sales are $535,000 vs. $587,000 last year (+21.6%).

For the full year 2019, there were 12 sales, a decrease of 2 (-14.3%) compared to 2018.  Total dollar sales for the year were $6,324,500 vs. $4,656,000 in 2018, an increase of $1,668,500 (+35.8%).

Currently, there are 31 commercial properties listed for sale. Of these, three are under contract: the Taos Tennis Ranch facility adjacent to the Quail Ridge Inn, with a listed price of $1.4 million; a 4,500-square foot building near Holy Cross Hospital listed at $450,000; and a three-building retail property on Bent Street downtown, listed at $495,000.

The commercial market has been up and down over the past several years, with no clear trend.  Commercial sales are still well below peak year 2005, when 19 properties sold, with a total dollar volume of $8,735,600.  At the start of this year, our expectation was that the commercial market would continue to increase, but slowly.  However, the Covid-19 crisis is no doubt having a severe negative effect on local businesses, forcing stores and restaurants to close for many weeks; additionally, tourism will be down this year, which will further hurt business; some may not survive.  At this point in time, we forecast that 2020 year-end commercial sales will be down from 2019’s.