These two characters are waiting for warm weather.
Note: The data in The Lora Company report do not include Angel Fire, Eagle Nest, Red River and other areas which are in the Taos County Association of Realtors Multiple Listing Service (MLS), but which we don’t consider part of the main Taos market.
2021 is off to a vigorous start! In 2020, the Covid-19 pandemic had a tremendous impact on everything and everybody—all over the world. In real estate, the demand for homes away from densely populated urban areas exploded.
Last summer and fall there was something of a buying frenzy in the market for single-family homes, despite low inventory of houses listed for sale. Prices rose sharply. 2021 sales are running well ahead of last year’s pace.
2020 sales of condominiums were down from from 2019, but that was due to an even more severe inventory shortage. Prices rose in this segment, too. This year’s sales are above last year’s so far.
Land sales were also down compared to 2019. However, toward the end of the year, they started to pick up and they are really gaining momentum in 2021. At this point, they are substantially above last year.
Although the buying stampede may ease up some this year as Covid vaccines are rolled out and fear of the pandemic subsides, robust demand for property in Taos is expected to continue this year.
Last year, an incremental layer of buyers was added to a market that has been steadily gaining since 2015. After Covid-related spring lockdowns were lifted, the market got hot, and it remains so! Homes are going under contract fast–sometimes in a day or two; and we are seeing more cases of multiple offers, which heretofore in Taos was uncommon. Some homes are selling above asking price, another rarity in Taos before now. The overall price level is rising at an accelerated rate. We are also seeing an increase in sales of higher-priced homes, as well as in homes in less popular areas. The market is very active this winter, which is usually a slower selling season. It looks as if the market will continue to surge in 2021.
Through February this year, unit sales are 54 vs. 36 in 2020 (+50%). Dollar sales are up 94%.
Currently, there are 59 sales pending, well above the historical average of 15-30 homes under contract at any given time. The high number of pending sales is partially due to delays in closing sales contracts caused by the backlog at Taos’s only two title companies; they simply cannot process orders in a timely manner.
Median and Average Prices – For the first two months of 2021, the median price (midpoint) is $402,000 vs. $325,000 in 2020, an increase of $77,000 (+23.7%). The average (mean) is $443,700 vs $343,900 last year, an increase of $99,800 (+29.0%). Some of the increases are due to the sales mix, with relatively more higher-priced homes selling; however, price per square foot of just about every type of home is up dramatically!
Here is a chart showing the trend in median and average prices over the past several years
Price 2016 2017 2018 2019 2020 2021 ytd
Median $283,500 300,000 311,000 322,500 344,000 402,000
Average $306,100 326,800 370,500 373,100 390,500 443,700
Price Discounting – Through the first two months, actual sales price has averaged 3.3% below the last asking price when the home went under contract; the discount from original asking price is 5.2%. The trend of demand exceeding supply has caused the discount from original price to decrease from 2013 to 2020. Here is a chart showing the discount from original asking price over the past eight years:
2013 2014 2015 2016 2017 2018 2019 2020 2021 ytd
18.4% 16.9% 13.9% 13.3% 9.4% 10.3% 7.8% 7.2% 5.2%
Days On Market – The average days on the market so far this year is 139 vs. 146 in 2020, a decrease of 7 days (-4.8%). The average time to sell in Taos used to be about eight months, but since 2016, there has been a steady decrease. This chart illustrates DOM in 2006, in the past eight years, and this year so far:
2006 2013 2014 2015 2016 2017 2018 2019 2020 2021 ytd
247 244 235 235 226 192 147 151 156 139
Here is a chart with data on current inventory and unit sales by price segment for the year:
|| Mar 2020
|| Sep 2008
|Up to $200,000||25||48||190||66||44%||58||21%||61||18%||8||15%|
|00,001 – $300,000||28||42||109||37||25%||64||24%||70||21%||9||17%|
|$300,001 – $400,000||32||55||69||20||13%||74||27%||83||25%||10||18%|
|$400,001 – $500,000||21||23||39||12||8%||27||10%||45||13 %||11||20%|
|$500,001 – $650,000||19||36||35||9||6%||24||9%||42||13%||8||15%|
|$650,001 – $800,000||12||21||27||4||3%||16||6%||15||4%||4||7%|
|$800,001 – $1million
Inventory – At the time this report was prepared, inventory had decreased again: only 181 homes were listed for sale, down 7 (-4%) from 188 last month, and down 82 homes from 263 a year ago (-31%). The highest inventory is 2020 was 273 (in July). In September of 2008, there were 518 homes listed for sale. The average inventory decreased every year from 2013 to 2018; it stabilized in 2019, but decreased again in 2020.
Here is chart showing average inventory for the past eight years:
2013 2014 2015 2016 2017 2018 2019 2020
334 333 324 316 285 264 274 257
Taos inventory consists of a wide variety of size, price, style, location, and condition. It is difficult to find more than a few homes to show a buyer that might meet most of his/her criteria. Many of our buyers are from out of town, and they often are frustrated that a home they are interested in goes under contract before they can get here to see it. Sometimes a video showing must suffice for a buyer to make an offer.
With demand increasing–even among homes with less popular styles and locations–and with no significant increase in the building of new homes or the listing of existing homes, the inventory will probably continue to shrink relative to demand. Even though prices seem high at this point in time, they will probably continue to rise, albeit maybe not as much as they did last year. And Taos prices still compare favorably to other destinations in the inter-mountain west!
How Home Purchases Were Financed:
Interest Rates – Interest rates on residential loans remain extremely low. Rates have increased some, in line with rate increases in the market for U.S. Treasury bonds. The 30-year fixed-rate loan is now averaging 3.34%, up from 3.04% a month ago, and 2.88% two months ago. However, rates are not expected to increase rapidly, and they should remain very attractive at least through 2021. Here are current rates as posted by Bankrate.com on Mar. 24, 2021:
Conventional 30-year fixed: 3.34 % (Nominal) 3.50 % (APR)
Conventional 15-year fixed: 2.54 % 2.79 %
Jumbo 30-year fixed: 3.37 % 3.44 %
5/1 Adjustable 3.03 % 3.72 %
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales – For the year to date through February, there have been two foreclosure sales. For the full year of 2020, there were nine foreclosure sales (2.7% of total sales). The number of foreclosures has diminished steadily over the past several years. Currently, there are just three bank-owned houses listed for sale; of those, two are under contract.
This table shows the number of foreclosure sales, and their percentage of total sales of single-family homes, for the last ten years:
|2021 ytd||2||( 4%)|
Note: These data do not include any of the condominiums developed and offered for sale by Taos Ski Valley Resort; those condos are not listed in the Taos MLS.
Year-to-date unit sales are 14 vs. 5 for the same time period in 2020, a gain of 9 (180%). Dollar sales are up 95%. This is a good start to the year, but the condo inventory shortage is even worse than for single-family homes, so this will again be a constraint on sales: sales would be higher if there were more condos available for purchase, especially in and near the Town of Taos. As with homes, there is no indication that inventory will increase significantly this year.
At the time of this report, there are 12 condo sales pending, up significantly from the 3-7 that was typical up until last year. As with homes, some of this increase is due to the increased time it is taking to get sales contracts closed (backlog of title work, appraisals).
To give a sense of market dynamics, one of my buyers made an offer on a condo within a few hours of the listing being active in the MLS. The offer had an escalation clause allowing the buyers’ price to rise to $13,000 above list price of $299,000 if there were competing offers. There were five offers submitted that morning, four of which had escalation clauses. My buyers weren’t the successful “bidders”.
Median price through two months is $313,600 vs. $331,000 last year. a decrease of $17,400 (-5.3%). Average price was also down, at $269,900 vs. $388,100, a drop of $118,200 (-30.5%). Please note that 14 sales is probably not representative of how the year will turn out; note also that averages will be affected by the sales mix of units available in the small inventory.
Price Discounting – Year-to-date final sales price has averaged 3.1% less than last asking price when the condo went under contract; the discount from original price is 6.8%. Again, two months is too small a data sample to project a trend.
Here are the discounts from original asking price for the past seven years, and this year to date:
2014 2015 2016 2017 2018 2019 2020 2021
12.7% 8.6% 11.8% 6.7% 6.5% 5.5% 3.2% 6.8%
Inventory – The number of condos listed for sale at the time of this report was 34, down 8 from last month, and down 15 from this time a year ago. Of the 34 units currently available for purchase, 14 (41%) are at Taos Ski Valley, while only 20 are in or near the Town of Taos. Those 20 include a wide variety of size, age, style and price; just as with with houses, it is difficult to find more than a very few listings that work for any given buyer.
For example, if a buyer today wants a condo anywhere but at Taos Ski Valley, priced up to $250,000, there are only two listings: a studio and a 1-bedroom. Both are under contract, so there aren’t any available at this time. If the price limit is raised to $300,000, there are three units available.
In 2006, there were often over 200 condos on the market at any given time, with the majority in or near central Taos; there were 149 condo sales that year.
Note how the average inventory has decreased steadily over the past eight years:
2013 2014 2015 2016 2017 2018 2019 2020
107 81 78 65 58 59 56 49
Here is a chart indicating current inventory and sales by price segment:
||Sept.||# of||# of||# of|
|Up to $150,000||0||2||40||16||55%||10||13%||4||29%|
|$150,001 – $250,000||6||14||50||8||28%||21||28%||1||7%|
|$250,001 – $350,000||15||10||51||3||10 %||18||24%||6||43%|
|$350,001 – $500,000||9||20||56||1||3%||22||30%||3||21%|
How Condo Purchases Were Financed:
|2011||2016||2020|| 2020 YTD
There have been no multi-family sales through the first two months of 2021, the same as last year. This is a very small segment of the Taos real estate market. However, we may see some increase in sales as home and condo buyers facing scarce inventory broaden their searches to include multi-family. For example, some duplexes might be convertible to single-family residences with some building modifications.
Currently, there are 8 multi-family listings, and five of these are under contract. So this segment of the market may start to gain some traction.
Land sales have really started to pop! As noted above, it seems that some home buyers who have been frustrated in their search for an existing home to buy are deciding to buy land and build. Currently there are 59 pending sales, which is way more than typical. Of course, a good portion of these are due to the protracted time it is taking to close sales (title company backlog). However, we expect that 2021 sales will far outstrip 2020 sales by the end of the year.
Year-to-date unit sales are 36 vs. the same period in 2020, a gain of 21 (+150%). Dollar sales are $2.91 million vs. $1.05 million last year, an increase of 176%
Here is a chart indicating inventory and sales by price segment:
| Same Month
|Up to $50,000||115||136||46||39%||52||36%||9||26%|
|$50,000 – $100,000||149||167||34||29%||53||36%||18||51%|
|$250,001 – $300,000||19||18||2||2%||0||0%||0||0%|
Current inventory of 475 tracts listed for sale is down slightly from 476 one month ago, and down from 502 a year ago. Although sales are forecast to gain significantly this year, with the large inventory of land available for purchase, this segment of the market is not yet the hot seller’s market that residential property is.
How Land Purchases Were Financed:
The availability of bank financing for land purchases is more limited than it was during the pre-recession years of 2000 – 2007.
There have been no commercial sales in the first two months of 2021, down one sale from the same period in 2020. For the entire year 2020, there were only 8 sales, with a total dollar volume of $2.9 million. With the growing number of people moving to Taos (for either full-time or extended stay living), the demand for commercial services should increase; this should in turn boost the commercial real estate sector.
Here is a quick look at the number of sales over the past ten years:
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2 7 9 3 17 7 5 14 12 8
Currently, there are 31 commercial properties listed for sale, the same as last month. At this time, two are under contract.