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.
The market has cooled a little from the frenzied pace of the past year and a half, but there is still strong buyer interest in Taos property! We’re still seeing about the same number of properties going under contract every day as we have throughout the past year; but anecdotally, things seem to easing up some.
The actual number of closed sales of homes and condos continues to be constrained by a lack of inventory, and also by the extremely long time it is taking to complete escrows—four to five months! We would be seeing higher sales numbers if we had more property listed for sale–and more than just our two overworked title companies so escrows could be processed faster. The good news is that another title company is looking to open an office in Taos some time in the first quarter of next year.
Competition among buyers for homes and condos remains intense: multiple offers are common, with buyers often offering above asking price. This sort of market behavior has rarely ever occurred in Taos, even during the boom years of 2000 – 2007. With many people being able to work from anywhere, and with interest rates still amazingly low, strong demand for homes and condos in Taos is expected to continue into the foreseeable future. Prices have continued to rise sharply; but we will probably see the rate of price increases slow down. What buyers have been willing to pay for homes and condos has been eye-popping in many cases!
Multi-family sales look set to start to gain some, but will remain a very small segment of the market.
Land sales are way up vs. last year, as some frustrated home buyers are deciding to build instead of searching in vain for an existing home to buy.
Commercial sales are still very slow, as demand for retail and office space hasn’t yet recovered.
Call us for a free market analysis of the value of your property, and a consultation about the selling process.
Last year, the Covid-19 pandemic brought an extra wave of buyers to a market that had been steadily gaining since 2015. After the stay-at-home health orders were lifted and people started to travel, the market kicked into a new high gear. Homes have been going under contract fast–-sometimes in just a few days. The overall price level has been rising at an accelerated rate, due to demand far outstripping supply. We are also seeing an increase in sales of higher-priced homes, as well as of homes in less popular areas. So far this year, 23 homes have sold over $1 million! Back in 2006-2007 at the height of the market before the recession, only 6-7 homes over $1 million would sell in a year.
The pandemic has changed the way people work and where they want to live. It looks as if “working from home” is here to stay. The desire of many people to leave urban areas and to live in a more rural environment seems likely to remain a strong factor in national real estate trends. Some of the hottest markets have been in Idaho and Montana. Taos will continue to attract some of these people. Although average prices here are up dramatically, they still seem very attractive vis-a-vis where many buyers are moving from.
October 2021 unit sales were down compared to October 2020, with 24 closings vs. 30 last year. This is the third month this year that sales have been fewer than the same month last year. Year-to-date unit sales are still 9% above last year, but the gains are diminishing. Back in May of this year, the market was 39% ahead of last year, due to the effects that the Covid-19 pandemic initially had on business in 2020. Once stay-at-home orders were relaxed, 2020 sales boomed. Now in 2021, it is difficult for the market to exceed last year’s level in any given month. At this point in time, it looks as if November sales this year will be about the same as last year.
We discussed above the fact that it is taking an unbelievably long time to close sales contracts. Currently, there are 72 pending sales, up from 66 last month, and many more than the historical average of 15-30 homes under contract at any given time. The two title companies simply cannot process all the orders in a timely fashion. The situation is actually worse now than it was a year ago.
Dollar sales continue to run well above last year as prices have been rising. Year-to-date dollar volume is $148.6 million this year vs. $98.4 million last year, a gain of 51%. That is huge, given that unit sales are up just 9%.
Median and Average Prices – For the year through October, the median price (midpoint in the range of prices from low to high) in 2021 is $425,000 vs. $325,300 in 2020, an increase of $99,700 (+31%). The average (mean) is $510,600 this year vs $369,900 last year, a gain of $140,700 (+38%). Some of the increases are due to the sales mix, with relatively more higher-priced homes selling; but the increasing average price is not just a function of the sales mix; price per square foot is up dramatically across the board. The acute lack of inventory (supply) coupled with booming demand has caused prices to rise at a rate not seen before in Taos. The rate of increase should decelerate—prices can’t keep rising at the same rate they have been!
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 $283,500 300,000 311,000 322,500 344,000 425,000
Average $306,100 326,800 370,500 373,100 390,500 510,600
Price Discounting – Through the first ten months, actual sales price has averaged 2.7% below the last asking price when the home went under contract; the discount from original asking price is 4.7%. As noted above, more homes are selling at asking price or higher, due to intense buyer competition; this has caused the decrease in the average discount. It is a seller’s market! Here is a chart showing the how the discount from original asking price has diminished steadily 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% 4.7%
Days On Market – This is is the number of days from when a property is listed to when it goes under contract for sale. The average days on the market so far this year is 140 vs. 152 for the same period in 2020, a decrease of 12 days (-8%). Desirable homes in preferred locations are going under contract much faster than the average, often in just a few days. The average time to sell in Taos is still much higher than in many parts of the country, because there isn’t much of an economy that brings people here for work, and few people in Taos move from one home here to another.
This chart illustrates DOM in 2006 (a boom year), in the past eight years, and this year so far:
2006 2013 2014 2015 2016 2017 2018 2019 2020 2021 ytd
247 244 235 235 226 192 147 151 156 140
Here is a chart with data on current inventory and unit sales by price segment for the year:
|| Nov 2020
|| Sep 2008
||2020|| 2021 YTD
|Up to $200,000||22||34||190||66||44%||58||21%||61||18%||34||12%|
|200,001 – $300,000||33||33||109||37||25%||64||24%||70||21%||44||15%|
|$300,001 – $400,000||51||48||69||20||13%||74||27%||83||25%||52||18%|
|$400,001 – $500,000||36||30||39||12||8%||27||10%||45||13 %||50||17%|
|$500,001 – $650,000||29||29||35||9||6%||24||9%||42||13%||41||14%|
|$650,001 – $800,000||28||19||27||4||3%||16||6%||15||4%||29||10%|
|$800,001 – $1million
Inventory – At the time this report was prepared, inventory had decreased again. There are now 246 homes listed for sale, down 5 from 251 last month, but up 5 from 241 a year ago. 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. This year, inventory is averaging about 10% less than last year, and about half the number of homes available for purchase in 2008. Taos inventory consists of a wide variety of size, price, style, location, and condition. With such limited inventory, it is difficult to find more than a few homes to show a buyer that might meet most of his/her criteria. There are no indications that inventory will increase much in the near term, either from an increase in building or from more owners listing existing homes for sale (many owners are holding their homes as investments).
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
With buyer demand remaining strong—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 imbalance between supply and demand looks set to continue into the foreseeable future. Interest rates may start to rise, but probably not significantly next year. So the market should still favor sellers.
How Home Purchases Were Financed:
|2011||2016||2020|| 2021 YTD
Interest Rates – Over the past year, rates on home loans have moved within a fairly narrow range. Recently, expectations of rising inflation seem to be growing, but mortgage rates haven’t moved up much. The 30-year fixed-rate loan is now averaging 3.24%, up from 2.95% a month ago. A year ago, the 30-year was at 2.95%. Rates are expected to remain relatively very low for now; however, if the Federal Reserve—and the bond market—begin to sense that inflation is rising too much, then rates will probably rise. Here are average current rates as posted by Bankrate.com on November 20:
Conventional 30-year fixed: 3.234 % (Nominal) 3.38% (APR)
Conventional 15-year fixed: 2.52 % 2.74 %
Jumbo 30-year fixed: 3.20 % 3.29 %
5/1 Adjustable 2.74 % 4.07 %
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales – For this year through October, there have been just three foreclosure sales. They ranged in price from $135,000 – $315,500. For the full year of 2020, there were nine foreclosure sales (3% of total sales). Since peaking in 2012, the number of foreclosures has diminished steadily over the past nine years. Currently, there are just three bank-owned house listed for sale; two have sales pending.
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||3||( 1%)|
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.
October 2021 closed unit sales were down by 5 units from October 2020 (6 vs. 11). This was the fourth consecutive month with fewer sales this year compared to last year; November sales this year are already slightly ahead of last year’s total with several more days left in the month for closings. Year-to-date unit sales in 2021 are still ahead of last year, at 64 vs. 61, an increase of just 3 units (5%). The big positive variance that we saw earlier in the year has been shrinking. There are still plenty of condo buyers in the market, but there is a dearth of condos available for purchase.
Year-to-date dollar sales are up 12% at $20.8.1 million vs. $18.6 million. The lack of inventory will continue to keep sales below potential going forward. As with single-family homes, there are no signs that inventory will increase significantly this year—or in the near future.
At the time of this report, there are 24 condo sales pending, up from 21 last month, and significantly more than the 3-7 that was typical up until last year. Most of this increase is due to the increased time it is taking to get sales contracts closed (backlog of title work).
Median price through the first ten months is $316,100 vs. $299,000 last year, an increase of $17,100 (+6%). Average price year-to-date is $325,400 vs. $304,600, a gain of $20,800 (+7%). Like single-family homes, condo prices are rising due to the supply-demand situation. The median and average prices are averages that, in such a relatively small statistical sample (64 sales) which includes a great diversity of price, do not really indicate how steeply some condo prices have risen.
Price Discounting – Year-to-date final sales price has averaged 2.5% less than last asking price when the condo went under contract; the discount from original price is 3.4%. There have been a number of cases of condos selling at or above asking price.
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 ytd
12.7% 8.6% 11.8% 6.7% 6.5% 5.5% 3.2% 3.4%
Inventory – The number of condos listed for sale at the time of this report was 68, up 3 from 65 last month, and up 13 from 55 at this time a year ago. Of the 68 units currently available for purchase, 22 (32%) are at Taos Ski Valley, while 46 are in or near the Town of Taos (four are in Valdez, so not really near the Town). Of those 46, only 8 do not have a pending sale. The available units vary a lot in terms of size and price; there is not a lot for an individual buyer to choose from! In 2006, there were often over 200 condos on the market at any given time, with the majority in or near central Taos; that year, there were 149 condo sales.
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:
||Sep.||# of||# of||# of|
|Up to $150,000||1||7||40||16||55%||10||13%||7||11%|
|$150,001 – $250,000||13||11||50||8||28%||21||28%||11||17%|
|$250,001 – $350,000||19||17||51||3||10 %||18||24%||26||41%|
|$350,001 – $500,000||20||17||56||1||3%||22||30%||16||25%|
How Condo Purchases Were Financed:
Once again, there were no closed sales in the past month, the same as last year for the same month. The year-to-date total is still only six sales, which is an increase of four sales over the same period in 2020. This year’s sales have consisted of one duplex, one triplex, one four-plex, a 5-plex, and a 10-unit property. Multi-family is and has always been a very small segment of the Taos real estate market. In peak year 2005, there were but 8 sales, with a total dollar volume of $3,053,000. However, going forward we may see sales increase as more investors start to consider this class of real estate. Rents have been rising for years. There is way more demand than supply for long-term rentals, and this trend is expected to continue. Multi-family income properties yield fairly attractive returns on investment. With today’s low interest rates (cost of capital), and with prices of single-family homes and condos having risen rapidly, multi-family should start to attract investors. Additionally, if inflation does persist, then real estate investments traditionally have provided a good inflation hedge.
Currently, there are 13 multi-family properties listed for sale; 4 of these have sales pending.
October was the third month this year in which closed sales were fewer than the same month in 2020: 8 vs. 12. Year-to-date unit sales are still way up: 209 vs. 119, a gain of 90 tracts sold (+76%). Dollar sales are up only 32% ($22.8 million vs. $17.3 million), but that is because last year had one unusually high-priced sale of $7 million (a ranch property north of Taos). Excluding that one sale, dollar sales are up $12.5 million (122%).
After languishing for years after the real estate recession that started in 2008, land sales are really picking up. The market still has a way to go before equaling the level of unit sales achieved in the years leading up to 2008: 2021 should end with approximately 255-265 closed sales; in 2005, there were 339 closed sales. But the trend is definitely up, as some home buyers who have been frustrated in their search for an existing home are deciding to buy land and build, despite the fact that building costs have skyrocketed. (A good-quality home — not the most luxurious, but not “builder basic” — costs $350 – $400 per square foot to build today in Taos.) High building costs no doubt are deterring some people from buying land and building.
Currently, there are 77 pending sales! That is down some from 83 last month, but it is a huge number which reflects the title company delays noted above. Clearly, if escrows weren’t taking as long as they are (4-5 months), we would be reporting substantially more closed sales.
Median price year-to-date is $71,500 vs. $70,500 last year, a slight increase of $1,000 (+1%). The median price differential is negligibly affected by that one large sale last year, because the median is just the midpoint in the range of prices; however, average (mean) price is affected by that big sale. Excluding the $7 million sale last year, average price of $109,100 this year is up $20,900 (+25%) over last year.
Current inventory of 527 tracts listed for sale is down 28 from 555 one month ago, and up 13 from 514 a year ago. Whereas in the market for homes and condos there is much more demand than supply, in the land market the reverse is true; therefore, prices won’t rise as rapidly as they have for homes and condos until some of the excess inventory is absorbed. The land market is not yet a seller’s market.
Here is a chart indicating inventory and sales by price segment:
| Same Month
|Up to $50,000||120||130||46||39%||52||36%||69||33%|
|$50,000 – $100,000||177||161||34||29%||53||36%||72||34%|
|$250,001 – $300,000||16||20||2||2%||0||0%||6||3%|
Days On Market – For the first ten months of the year, the average time to sell a piece of land is 375 days. This is down 78 days (-17%) from the same time period in 2020. The average over the past 18 years is 410 days. This is another indicator that buyer demand for land is picking up.
How Land Purchases Were Financed:
Cash is still by far the most common way land purchases are financed. The availability of loans for land purchases is more limited than it was during the years before the “Great Financial Crisis” of 2008, when loans were easy to obtain.
There were no closed commercial sales in October this year or last year. Through ten months this year, only three sales have closed, compared to five in the same period in 2020. This year’s dollar volume is $1,345,000, which is actually an increase of $127,000 over 2020 sales of $1,218,000. Commercial properties vary widely, so it is not surprising that the change in dollar sales does not match the change in the number of sales. Last year, there was a total of only 8 sales, with a total dollar volume of $2.9 million. The two best years during the previous 18 years were 2005 (19 closed sales totaling $8.7 million) and 2015 (17 closed sales totaling $8.1 million).
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 38 commercial properties listed for sale, down from 40 last month. At this time, four are under contract. Like everything else, commercial sales are taking a long time to close.
Obviously, the commercial market will take longer to bounce back from the effects of the Covid-19 pandemic on the economy and local businesses. Ongoing concerns about the virus are no doubt dampening people’s willingness to venture into commercial enterprise. However, with the growing number of people moving to Taos for either full-time or extended-stay living, and with tourism on the rebound, the demand for commercial property should increase in the not-too-distant future.