The Lora Company’s Taos Real Estate Market Report for January 2021

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.

Last year, 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.  The Taos market saw something of a buying frenzy.  Single-family home unit sales were up 24% over 2019, despite a severe lack of inventory.  Prices rose sharply. 

Condos unit sales in 2020 were 6% fewer than in 2019, but that was the result of an even more acute inventory shortage than for homes. Prices rose in this market segment, too

Land sales started to pick up toward the end of the year, and they look set to gain momentum in 2021.

2021 got off to a fast start, with January sales gains for single-family homes, condos and land compared to January 2020.  Although the buying stampede may ease up some this year as Covid vaccines are rolled out and fear of the pandemic subsides, we think that demand for property in Taos will remain strong.

Click here for detailed year-to-date data

Click here for a chart with data for the past 18 years.

Following is a discussion of each market segment:

SINGLE-FAMILY HOMES

Last year, an incremental layer of buyers was added to a market that has been steadily gaining since 2015.  After spring lockdowns were lifted, the market got hot, and it remains so!   Homes are going under contract fast–sometimes in as little as a day or two; and prices are 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.

January unit sales were 40% above last January’s pace: 28 homes this year vs. 20 last year.  Dollar sales were up 83%.   One high-dollar sale ($1,930,000) accounted for much of the large gain.

Currently, there are 56 sales pending, well above the historical average of 15-30 homes under contract at any given time.  The high number of pending sales is in large part due to the delays in closing sales 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 month of  2021, the median price (midpoint) was $361,000 vs. $322,500 in January 2020, an increase of $28,500 (+8.6%).   The average (mean) was $454,700 vs $347,200 last year, an increase of $107,500 (+31.0%).

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   361,000

Average  $306,100   326,800    370,500    373,100    390,500   454,700

Price Discounting – For the month of January, actual sales price averaged 2.8% below the last asking price when the home went under contract; the discount from original asking price was 5.0%.  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%     5.0%

Days On Market – The average days on the market for the January sales was 141 vs. 147 in 2020, a decrease of 6 days (-4.1%).  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       141

Here is a chart with data on current inventory and unit sales by price segment for the year:

INVENTORY					UNIT	SALES
	Feb 2021	Feb 2020	Sep 2008	….	2011		…	2019		…..	2020		2021 YTD
					#	%		#	%		#	%	#	%
Up to $200,000	26	48	190		66	44%		58	21%		61	18%	4	14%
00,001 – $300,000	30	44	109		37	25%		64	24%		70	21%	6	21%
$300,001 – $400,000	33	51	69		20	13%		74	27%		83	25%	6	21%
$400,001 – $500,000	25	27	39		12	8%		27	10%		45	13 %	6	21%
$500,001 – $650,000	21	35	35		9	6%		24	9%		42	13%	1	4%
$650,001 – $800,000	14	20	27		4	3%		16	6%		15	4%	2	7%
$800,001 – $1million	11	11	36		1	1%		4	1%		15	4%	2	7%
Over $1,000,000	28	29	13		1	1%		4	1%		6	2%	1	4%
TOTAL	188	265	518		150	100%		271	100%		337	100%	28	100%

Inventory –   At the time this report was prepared, inventory had decreased again: only 188 homes were listed for sale, down 11 homes (-6%) from 199 last month, and down 77 homes from 265 a year ago (-29%).  The highest inventory last year 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 often difficult to find more than a few homes to show a buyer that might meet most of his/her criteria.   With sales 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.  The acute inventory shortage is definitely affecting unit sales, average prices, price discounting and days on market.

How Home Purchases Were Financed:

	2011		2016			2020		2021
Cash	65	43%	91	36%		103	31%	10	36%
Conventional loan	66	44%	129	52%		200	59%	16	57%
FHA loan	8	5%	11	4%		11	3%	0	0%
VA loan	1	1%	10	4%		13	4%	1	4%
Seller financing	8	5%	7	3%		4	1%	0	0%
Other	2	1%	1	1%		6	2%	1	4%
Total	150	100%	249	100%		337	100%	28	100%

 

Interest Rates – Interest rates on residential loans remain extremely low.  Rates have increased slightly, in line with rate increases in the market for U.S. Treasury bonds.  The 30-year fixed-rate loan is now averaging 3.04%, up from 2.88% a month ago.  However, rates are expected to remain very attractive at least through 2021.  Here are current rates as posted by Bankrate.com on Feb. 22, 2021:

Conventional 30-year fixed:           3.04 %  (Nominal)    3.31 %  (APR)

Conventional 15-year fixed:           2.43 %                      2.74 %

Jumbo  30-year fixed:                    3.09 %                      3.19 %

5/1 Adjustable                                2.95 %                      4.01 %

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

Foreclosure Sales –  There were two foreclosure sales in January 2021.  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 two bank-owned houses listed for sale.

This table shows the number of foreclosure sales, and their percentage of total sales of single-family homes, for the last ten 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	9	(  3%)
2021 ytd	2	(  7%)

 

CONDOMINIUMS

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.

January 2021 unit sales were up 5 compared to January 2020 (7 vs. 2).  Dollar sales were up 169%.  This is a good start to the year, but the condo inventory shortage is even worse than for single-family homes, so sales will again be limited by supply.  Full-year 2020 unit sales were 5 fewer than 2019: 74 vs. 79 (-6.3%); sales would have been higher if there had been more condos available for purchase, especially in and near the Town of Taos.  As with homes, there is no indication that inventory will increase this year.

At the time of this report, there are 11 condo sales pending, up significantly from the 3-5 that has been typical up until recently.  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).

Median price for January was $265,000 vs. $344,300 in January 2020.  Average price was also $265,000 vs. $344,000.   Please note that one month’s data (seven sales) is probably not representative of how the year will turn out; however, note also that averages will be affected by the price mix of units available in the small inventory.  

Price Discounting – In January, final sales price averaged 3.0% less than last asking price when the condo went under contract; the discount from original price was 5.8%.  Again, one month is too small a data sample to project a trend.

Inventory – The number of condos listed for sale at the time of this report was 42, down 7 from last month, and down 2 from this time a year ago.  Of the 42 units currently available for purchase, 20 (48%) are at Taos Ski Valley, while only 22 are in or near the Town of Taos.  Those 22 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.  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:

			—–	—–	UNIT	SALES	—	—–
	—–INVENTORY—–				2011			2020		2021	YTD
					full	year		full	year
	Feb	Feb	Sept.		# of			# of		# of
	2021	2020	2008		Sales	%		Sales	%	Sales	%
Up to $150,000	1	1	40		16	55%		10	13%	2	29%
$150,001 – $250,000	9	11	50		8	28%		21	28%	1	14%
$250,001 – $350,000	15	12	51		3	10 %		18	24%	2	29%
$350,001 – $500,000	13	18	56		1	3%		22	30%	2	29%
Over $500,000	4	2	29		1	3%		3	4%	0	0%
TOTAL	42	44	226		29	100%		74	100%	7	100%

How Condo Purchases Were Financed:

	2011		2016			2020		2020 YTD
Cash	14	48%	34	51%		43	58%	5	71%
Conventional loan	15	52%	32	48%		30	41%	2	29%
Seller financing	0	0%	0	0%		1	1%	0	0%
Other	0	0%	1	1%		0	0%	0	0%
Total	29	100%	67	100%		74	100%	7	100%

 

MULTI-FAMILY

There were no multi-family sales in January 2021, the same as last January.  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.

LAND

January 2021 sales were up over January 2020:  10 vs. 7 tracts sold.  It does appear that land sales are really starting to pick up: currently there are 57 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.

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

		UNITS				SOLD
——INVENTORY—–				2017			2020		2021 YTD
	Current  Month	Same Month Last Year		#	%		#	%	#		%
Up to $50,000	114	136		46	39%		52	36%	3		30%
$50,000 – $100,000	148	167		34	29%		53	36%	5		50%
$100,001 -$150,000	65	60		16	14%		17	12%	1		10%
$150,001-$200,000	40	39		15	13%		16	12%	0		0%
$200,001– $250,000	31	27		3	2%		4	3%	1		10%
$250,001 – $300,000	19	18		2	2%		0	0%	0		0%
Over $300,000	59	55		2	2%		4	3%	0		0%
TOTAL	476	502		118	100%		145	100%	10		100%

Current inventory of 476 tracts listed for sale is up slightly from 470 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 still pretty much a buyer’s market.

How Land Purchases Were Financed:

	2011		2016			2020		2021
Cash	28	69%	63	70%		110	75%	9	90%
Conventional loan	5	12%	6	7%		26	18%	1	10%
Seller financing	7	17%	20	22%		9	6%	0	0%
Other	1	2%	1	1%		1	1%	0	0%
Total	41	100%	90	100%		146	100%	10	100%

The availability of bank financing for land purchases is more limited than it was during the pre-recession years of 2000 – 2007.

COMMERCIAL

There were no commercial sales in January 2021, the same as January 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, up from 29 a month ago.  At this time, none are under contract.