Note: The data in The Lora Company report 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 but are not part of the main Taos market. 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; but we feel that they are separate and distinct markets, so they are not included in our report.
August single-family home unit sales were up by 1 over August last year. Year-to-date sales are below last year by 1 unit.
August condo sales were up by 5 units. Year-to-date sales are ahead of last year by 11 units (25%).
August land sales were down by 1 . Year-to-date sales are up by 8 (12%) over last year.
August had no multi-family sales. Year-to-date sales are down by 2 from last year (2 vs. 4).
August had 1 commercial sale. Year-to-date sales are up by 4 over last year (9 vs. 5).
As the second of these two charts shows, since bottoming out in 2011-2012, the total market through 2017 gained 105% in unit sales, and 130% in dollar sales. At this point, it looks as if 2018 will finish about the same as 2017.
The shortage of adequate inventory of good homes available for purchase has been and is a major constraint on sales. Buyer interest continues to increase but the supply has not kept up with the demand. Homes in preferred locations are selling faster, and prices are rising. Even homes in less-popular areas are selling faster.
Some forecasters are predicting an economic slump in 2019. IF YOU HAVE BEEN THINKING ABOUT SELLING YOUR HOME, NOW IS A GREAT TIME!
CALL US AT THE LORA COMPANY FOR A FREE CONSULTATION AND MARKET ANALYSIS!
SFH are by far the largest segment of the Taos market. In 2017, SFH accounted for 60% of total market transactions, and 76% of dollar sales. Through August of 2018, SFH account for 57% of transactions, and 78% of dollar sales.
August 2018 had 27 closed sales vs. 26 in August 2017 (+4%). Dollar sales were up 56%%. There were 2 sales over $1 million last month. Year-to-date unit sales are almost exactly equal to last year (177 vs. 178 homes sold). Dollar sales are up 4% ($58,371,300 vs. $56,228,600).
The year 2017 had a gain over 2016 of 14% in the number of houses sold, and a gain of 22% in dollar sales. 2018 would have a similar gain over 2017 if there were more inventory!
If 2018 ends with the same volume as last year, we will still be about 20% below peak (2005) level of unit sales.
Median and Average Prices – Year-to-date the median price is $290,000 this year vs. $298,500 last year (-3.0%). Full-year 2017 median price was $300,000; in 2016 it was $283,500. The year-to-date 2018 average (mean) price is $329,800 vs. $315,900 last year (+4%). The full-year 2017 average was $326,800; in 2016 it was $306,100. In peak year 2005, the median was $290,500; the average was $333,500.
So far this year, the highest sale price was $1,985,000,000, followed by $1,500,000. There was also one sale in the $800,000’s last month. These three sales have pushed up the average price.
Price Discounting – Year-to-date, the actual selling price has averaged 4.9% less than the last asking price when the property went into contract; the average discount from original price is 8.1%. 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. 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. This year, we have seen prices rising faster as demand has picked up even more while supply has remained about the same. The median price is now back to peak market level; the average (mean) price is only about 2% below peak.
Days On Market – The average days on the market for all the homes that have sold year-to-date in 2018 is 151 vs. 202 for the same time frame last year (-25%). However, 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 somewhat compromised the accuracy of the days-on-market statistic; nevertheless, well-priced homes are definitely selling faster than in years past: In 2017, average DOM was 192; in 2016 it was 228; in 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. However, if today’s 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 32, up from 22 at last report a month ago.
|Up to $200,000||61||56||190||66||44%||77||27%||51||29%|
|$200,001 – $300,000||54||49||109||37||25%||66||23%||44||25%|
|$300,001 – $400,000||63||62||69||20||13%||65||23%||37||21%|
|$400,001 – $500,000||48||44||39||12||8%||33||12%||18||10 %|
|$500,001 – $650,000||33||35||35||9||6%||25||9%||18||10%|
|$650,001 – $800,000||32||33||27||4||3%||15||5%||5||2%|
|$800,001 – $1 million
Inventory – The inventory of homes listed for sale increased again, from 317 last month to 328 at the time of this report; this is up 63% from a low point this year 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. Current inventory is substantially less than during the early 2000’s; 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 today’s 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). Another reason may be that property owners who financed purchases at extremely low interest rates are holding the property in the expectation that price appreciation is greater than financing and other holding costs. And some homeowners are making good income from vacation rentals. The number of home rentals on sites such as airbnb.com and vrbo.com has exploded over the past several years. This is probably another reason owners are holding homes: positive net cash flow plus price appreciation.
How Home Sales Were Financed:
Foreclosure Sales – Through eight months of 2018, there have been 16 foreclosure sales (9% 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 14 bank-owned houses listed for sale; of those, 4 are under contract (sale pending). The number of foreclosures has diminished steadily over the past several years, both locally here in Taos and nationally.
August 2018 unit sales were 6 vs. 1 in August 2017. Dollar sales were up from $186,400 to $1,225,000 (557%). The highest sale was $335,000 for a 2-bedroom unit near the center of town.
Year-to-date, 36 condos have sold, a gain of 11 (44%) over 2017’s pace for the first eight months. Dollar sales are up from $5,489,300 to $9,207,200 (+68%). This is because of the 36 condos sold so far this year, 9 were at Taos Ski Valley, where prices are higher; of the 25 condos sold through August last year, only one was at TSV.
Year-to-date 2018 median price is $205,300 vs. $205,000 for the same period in 2017 (+0.1%). The median price for full-year 2017 was $215,000; in 2016 it was $188,000.
Year-to-date 2018 average (mean) price is $255,800 vs. $219,600 in 2017 (+17%). 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. If the current trend hols up, 2018 will probably finish with a 10% gain in units sold over last year, or a total for the year of about 68 units; this will be about 55% below peak-year volume.
Price Discounting – So far this year, final sales price has averaged 5.6% less than last asking price; the discount from original price is 6.0%. 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 71 last month to 74 at the time of this report. However, 39 of those are at Taos Ski Valley (53% of inventory); there are only 35 condos available for purchase for buyers who don’t want the Ski Valley location. 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 much more challenging than it was before the recession.
|Current||Last||Sept.||# of||# of||# of|
|Up to $150,000||3||3||40||16||55%||11||18%||10||28%|
|$150,001 – $250,000||20||19||50||8||28%||29||48%||12||33%|
|$250,001 – $350,000||20||20||51||3||10%||10||16%||6||17%|
|$350,001 – $500,000||26||24||56||1||3%||9||15%||5||14%|
Pending Sales – There were 5 sales pending at the time of this report, up from 2 last month.
Days On Market – Through August 2018, the average days on market is 107 compared to 172 for the same period in 2017 (-38%). 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 36 units sold so far in 2018, 20 were cash sales (55%), 15 were financed with a conventional loan (42%), and one was seller-financed (3%). 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, lenders who sell their loans on the secondary market cannot do so without the Fannie guarantee.
Foreclosure Sales – So far in 2018 there has been only one foreclosure sale (3% of total units sold). Of the 61 condos that sold in 2017, 5 were foreclosures (8%).
There were no sales in August of 2018. Year-to-date in 2018 there have been two sales (one duplex, one triplex) with a total price of $414,000. Through eight months in 2017, there were four sales, with a total price of $1,790,000.
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 probably should have been classified as improved land).
There are currently 13 multi-family properties listed for sale, the same as 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 rental 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. But with rents rising, property values should hold.
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.
August 2018 unit sales were 10 vs. 11 in August last year (-9%); dollar volume decreased from $1,550,600 to $384,400 (-75%).
Year-to-date unit sales are up over last year by 10% (85 vs. 77 closed sales). Dollar sales are up 5% ($7,308,700 vs. $6,987,100).
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 but who cannot find an existing home that suits them are opting to buy land and build. Additionally, a few “spec” builders are buying land. But land sales are still about 60% below peak (2005) level.
Through August 2018, the median price is $63,000 compared to $62,700 in 2017 (+0.5%). For full-year 2017 it was $64,500, up 23% from $52,300 in 2016. Year-to-date 2018 average (mean) price is $86,000 vs. $90,700 in 2017 (-5%). 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 residential lot 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 eight months of 2018, final sales price has averaged 10.4% less than the last asking price when the land sold; the discount from original price is 17.4%. 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 August this year is 433 vs. 509 for the same period last year (-15%). For the full year 2017, average DOM was 472; in 2016 it was 464; in 2015 it was 605 days; in 2014 it was 390; in 2013 it was 465.
|Up to $50,000||167||155||42||47%||46||39%||36||42%|
|$50,000 – $100,000||199||190||31||34%||34||29%||27||31%|
|$250,001 – $300,000||17||16||2||2%||2||2%||2||3%|
The number of pending sales decreased from 20 to 13 at the time of this report.
The inventory increased from 573 to 592 tracts listed for sale. This equates to a 4.6-year supply at this year’s projected 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 was one commercial sale in August 2018, a 7-room bed-and-breakfast that sold for $900,00.
The year-to-date total is 9 sales vs. 5 for the same period last year. Year-to-date dollar sales are $3,119,000 vs. $2,851,000 last year through the first eight months (+9%). 2017 finished at that amount. In 2016 there were seven sales 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, five are under contract: the former Van Vechten – Lineberry Museum with an asking price of $3.5 million (being handled by a broker in our company); an 8,750-square foot office/treatment center on the main thoroughfare south of town (asking price $1,150,000); a 2,000-square foot building on the main thoroughfare just south of Wal-Mart that has housed several restaurants, with an asking price of $379,000; a former woodworking shop on Brooks Street in central Taos (asking price $375,000); and the RV park south of Town with an asking price of $350,000. This property has been under contract for years; a “dollar store” company is the buyer, but there is a lengthy due diligence/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 weak. The local general economy has not recovered as much as the national economy.