Note: The data herein 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. 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; however, basically they are separate and distinct markets, so they are not included in this report on the main Taos market.
May single-family home unit sales were down by 8 units (31%) compared to May last year. This undoubtedly is at least partly due to the ongoing constraint of limited inventory of homes available for purchase. Buyer interest continues to increase while the supply of good homes for sale isn’t adequate to satisfy the demand. Homes in preferred locations are selling faster, and prices are rising. Even homes in less-popular areas are selling faster.
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May condo sales were up by 4 units. Land sales were down by 4. Commercial sales were up by 2.
TOTAL MARKET YEAR-TO-DATE (single-family homes, condos, multi-family, land, commercial)
# of Closed Sales UP from 164 to 180 (+10%)
Dollar Sales UP from $39.8 million to $44.8 million (+13%)
As the second of these two charts shows, since bottoming out in 2011-2012, the overall market through 2017 gained 105% in unit sales, and 130% in dollar sales. The market has not yet reached peak levels of 2005-2006, but it is on track to reach that soon, at least for single-family homes.
In 2017, SFH accounted for 60% of total market transactions, and 76% of dollar sales. In peak years 2005-2006, SFH were about 42% of total transactions, and about 57% of total dollar sales. In the years since the real estate market bottomed out, condos, multi-family, land and commercial sales have not recovered as much as single-family homes. Through May of 2018, SFH account for 55% of transactions, and 68% of dollars.
For the full year 2017, the number of houses sold was up over 2016 by 14% (284 vs. 249). Dollar sales were up 22%, from $76.2 million to $92.8 million. The gain last year would have been even greater if there had been more good homes available for purchase. Likewise, 2018 growth is being constrained by lack of inventory.
May 2018 had 18 closed sales vs. 26 in May 2017 (-31%). Dollar sales were down 35%. Year-to-date unit sales are up 1% over last year (99 vs. 98 homes sold). Dollar sales are up 1% ($30.3 million vs. $30.0 million).
Average Prices – Year-to-date the median price is $273,000 this year vs. $268,800 last year (+1.6%). The full-year 2017 median price was $300,000 vs. $283,500 in 2016. The year-to-date average (mean) price is $306,400 this year vs. $306,100 last year (+0.1%). The full-year 2017 average was $326,800 vs. $306,100 in 2016.
So far this year, the highest sale price was $770,000. There was one other sale in the $700,000’s; three in the $600,000’s.
Price Discounting – Year-to-date, the actual selling price has averaged 4.9% than the last asking price when the property went into contract; the average discount from original price is 8.4%. 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, but mainly just for good-quality homes in the most preferred areas. 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. On average, prices now are about 10% – 14% below peak market levels.
Days On Market – The average days on the market for all the homes that have sold year-to-date in 2018 is 167 vs.194 for the same time frame last year (-14%). In 2017, average DOM was 192; in 2016 it was 228. However, these statistics must be qualified: Due to a Taos MLS rule change, in some cases listings got a new MLS number with days-on-market re-set to zero even though they were on the market continuously. This has happened in a number of instances, and it has somewhat compromised the accuracy of the days-on-market statistic; nevertheless, we do see homes selling faster than in years past!
The average for the full year 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. The reason is that few buyers relocate to Taos for a job; most home purchasers are not in a rush to buy and get settled here. But now if 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 26, down from 27 last month.
|Up to $200,000||45||47||190||66||44%||77||27%||32||32%|
|$200,001 – $300,000||44||42||109||37||25%||66||23%||22||22%|
|$300,001 – $400,000||50||45||69||20||13%||65||23%||23||23%|
|$400,001 – $500,000||43||32||39||12||8%||33||12%||7||7%|
|$500,001 – $650,000||30||31||35||9||6%||25||9%||12||12%|
|$650,001 – $800,000||23||18||27||4||3%||15||5%||3||3%|
|$800,001 – $1 million
Inventory – The inventory of homes listed for sale increased 10% to 270 at the time of this report; this is up 34% from a low point of 201 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. That is substantially fewer homes than during the pre-recession years; 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 current 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). Other than that, reasons for the reduced inventory are not clear.
How Home Sales Were Financed:
Foreclosure Sales – Through the first five months of 2018, there have been 11 foreclosure sales (11% 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 10 bank-owned houses listed for sale; of those, 7are under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both locally here in Taos and nationally.
May 2018 unit sales were 6 vs. 2 in May 2017. Dollar sales were up from $430,000 to $2,252,800 (434%). A 2-bedroom unit at Taos Ski Valley sold for $600,000. There were four sales in the $300,000’s, and one in the high $200,000’s.
Year-to-date, 20 condos have sold, a gain of 6 over 2017’s pace for the first five months. Dollar sales are up from $3.2 million to $6.5 million (102%). Full-year 2017 unit sales were below 2016’s pace by 9% (61 vs. 67). But dollar sales were up 4.3% ( $14.87 million vs. $14.26 million).
Year-to-date 2018 median price is $303,000 vs. $220,500 in 2017. The median price for full-year 2017 was $215,000; in 2016 it was $188,000.
Year-to-date 2018 average (mean) price is $325,700 vs. $230,600 in 2017. 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.
Price Discounting – So far this year, final sales price has averaged 4.7% less than last asking price; the discount from original price is 5.6%. 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 increased from 60 last month to 65 at the time of this report. However, of those 35 are at Taos Ski Valley (54%), so there are only 30 total condos available for purchase for buyers who don’t want the Ski Valley location. Of the 61 units that sold in 2017, only nine were at Taos Ski Valley (15%). Of the 20 units sold so far this year, nine have been at TSV (45%). 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 more challenging than it was before the recession.
|Current||Last||Sept.||# of||# of||# of|
|Up to $150,000||5||5||40||16||55%||11||18%||4||20%|
|$150,001 – $250,000||20||19||50||8||28%||29||48%||3||15%|
|$250,001 – $350,000||15||14||51||3||10%||10||16%||6||30%|
|$350,001 – $500,000||20||17||56||1||3%||9||15%||4||20%|
Pending Sales – There were 5 sales pending at the time of this report, up from 1 last month.
Days On Market – Through May 2018, the average days on market is 120; for the same period in 2017, the average was 210. 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 20 units sold so far in 2018, 11 were cash sales, 8 were financed with a conventional loan, and one was seller-financed. 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, most lenders won’t make the loan.
Foreclosure Sales – So far in 2018 there has been one foreclosure sale (4% of total units sold). Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There were no sales in May of 2018 compared to two in May 2017. Year-to-date in 2018 there have been two sales (one duplex, one triplex) vs. three in 2017.
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 should probably have been classified as improved land).
There are now 10 multi-family properties listed for sale, up from 5 last month. 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 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 unless rents increase commensurately, which they may.
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 lenders: they generally require two comps in the past 12 months.
May 2018 unit sales were 11 vs. 15 in May last year (-27%). Dollar volume increased from $1,076,200 to $1,193,000 (11%). Year-to-date unit sales are up over last year by 11% (51 vs. 46 closed sales). Dollar sales are up 75% ($5,294,000 vs. $3,033,200).
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 and who cannot find an existing home that suits them are opting to buy land and build. Additionally, a few “spec” builders are buying land.
Through May 2018, the median price is $69,000 compared to $55,000 in 2017 (+26%). For full-year 2017 it was $64,500, up 23% from $52,300 in 2016. Year-to-date 2018 average (mean) price is $103,800 vs. $65,900 in 2017 (+58%). 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 0.4-acre tract 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 five months of 2018, final sales price has averaged 10.4% less than the last asking price; the discount from original price is 16.1%. 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 May this year is 381 vs. 677 for the same period last year. For the full year 2017, average DOM was 472 vs. 464 in 2016; in 2015 it was 605 days; in 2014 it was 390; in 2013 it was 465.
|Up to $50,000||164||147||42||47%||46||39%||18||35%|
|$50,000 – $100,000||217||200||31||34%||34||29%||17||33%|
|$250,001 – $300,000||18||17||2||2%||2||2%||2||4%|
The number of pending sales decreased from 15 to 14 at the time of this report.
The inventory increased 10% from 565 to 619 tracts listed for sale. This equates to a 5.2-year supply at 2017’s 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 three commercial sales in May 2018 vs. one in May 2017: the building that housed the former “Joseph’s Table” restaurant in Ranchos de Taos; a retail space on the corner of Camino de La Placita and Paseo del Pueblo Norte in central Taos; and the Pizza Outback land, building and business.
The year-to-date total is 8 sales vs. 3 for the same period last year. Year-to-date dollar sales are $2,219,000 vs. $1,940,000 last year through the first five months.
For full-year 2017, there were five sales, totaling $2,851,000. In 2016 there were seven 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 35 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); the building that housed the Century 21 real estate office for many years, located on the main commercial thoroughfare (asking price $315,000); and the RV park south of Town with an asking price of $350,000. This property has been under contract for years; apparently, a “dollar store” company is the buyer, but there is a lengthy due diligence and/or approval process.
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 tepid. The local general economy has not recovered as much as the national economy.