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 included in the Taos County Association of Realtors MLS but that are not part of the main Taos market. Those areas do not have their own MLS system, and many brokerages in those areas have joined the Taos MLS; however, since we feel that they are separate and distinct markets, they are not included in our report on the main Taos market.
2019 First Quarter total market sales (all categories of property) were below 2018 Q1 by about 13%. The cold, snowy winter probably affected sales. The pace should pick up as the year progresses.
Single-family home unit sales for the quarter were 5 fewer than 2018 Q1. Dollar sales were down 10%. The lack of adequate inventory of good homes available for purchase has been an ongoing issue in the market. Buyer interest has been increasing over the past several years, but supply has not kept up with demand. As a result, prices have been increasing, while the average time it takes to sell a home has been decreasing. This situation will continue in 2019.
IF YOU HAVE BEEN THINKING ABOUT SELLING YOUR HOME, CALL US AT THE LORA COMPANY FOR A FREE MARKET ANALYSIS AND CONSULTATION ABOUT YOUR HOME’S VALUE, THE SELLING PROCESS AND WHAT YOU NEED TO DO TO GET YOUR PROPERTY READY TO SELL!
Condo unit sales for the quarter were up by 1 over 2018 Q1. Dollar sales were up 52.4%. As with single-family homes, lack of inventory is one constraint; tighter mortgage lending standards is another. Condos seem to have reached a plateau. 2019 unit sales and dollar sales are expected to be about the same as 2018.
Land unit sales were down by 7 over last year in the first quarter. Dollar sales were down 33.5%. Land sales should be marginally higher than 2018’s pace.
Multi-family unit sales for the first three months of 2019 were none vs. 2 in 2018 Q1. Multi-family sales should start to increase, as rising long-term rental rates (due to extremely low inventory of rental housing) start to attract more investors.
Commercial sales for the first quarter were 2 this year, the same as last year. Dollar sales were up 37.5%. Commercial sales will probably be about the same as last year.
The second chart shows that since bottoming out in 2011, the total market (all categories of property) through 2018 gained 117% in unit sales, and 164% in dollar sales.
Following is a detailed discussion of each market segment:
SFH are by far the largest segment of the total Taos real estate market. In 2018, SFH accounted for 58% of transactions, and 75% of dollar sales.
First-quarter 2019 unit sales were 54 vs. 59 in 2018 Q1 (-8.5%). Dollar sales were down 9.6% ($16.7 million vs. $18.5 million). Please see the chart below for a breakdown of sales by price segment.
Median and Average Prices – For the first three months of 2019, the median price was $310,300 vs. $290,000 for the same period last year (+7.0%). 2018’s full-year median price was $311,000; in 2017 it was $300,000; in peak year 2007, the median was $326,000. The average (mean) price in Q1 was $310,000 vs. $313,900 last year for the same period (-1.2%). 2018’s full-year average price was $370,500; it was $326,800 in 2017; in peak year 2007, the average was $379,900.
Price Discounting – In Q1, actual sales price averaged 5.9% below last asking price when the home went under contract; the discount from original asking price was 8.9%. For the full year 2018, actual price averaged 5.7% less than the last asking price, and 10.3% from original price. For the full 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 the peak in 2007 to a bottom in 2011. Prices were basically flat for a couple of years, then they started to increase slowly. By 2015 prices were rising in most cases, with prices in the most preferred areas rising more than in others. 2018 saw prices rise at a faster rate, as demand has picked up even more while supply has has steadily declined over the years. 2018 median and average prices were both about 4% below peak levels. Prices are continuing to trend higher in 2019.
Days On Market – The average days on the market in 2019 Q1 was 169 vs. 164 for 2018 Q1. Well-priced homes in the more desired areas are definitely selling faster than in years past: For the full year 2018 average DOM was 147; in 2017 it was 192; in 2016 it was 226; 2015 was 235 days; 2014 was 235 days. Even during the boom years 2004-2006, the average time to sell a house in Taos was about eight months. Today 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 29.
|Up to $200,000||49||50||190||66||44%||70||25%||17||31%|
|$200,001 – $300,000||42||44||109||37||25%||66||23%||10||19%|
|$300,001 – $400,000||46||49||69||20||13%||61||22%||15||28%|
|$400,001 – $500,000||31||37||39||12||8%||34||12%||3||5 %|
|$500,001 – $650,000||24||29||35||9||6%||31||11%||6||11%|
|$650,001 – $800,000||24||24||27||4||3%||9||3%||3||5%|
|$800,001 – $1 million
Inventory – At the time of this report, there were 249 homes listed for sale. The highest inventory in 2018 was 328; the average for the year was 264. The average inventory has decreased steadily over the past six years:
One reason for the reduced inventory is that there is very little “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 (probably stronger) 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. Additionally, many 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. With positive net cash flow plus price appreciation, many owners are holding their Taos homes as good investments.
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/her criteria. The inventory shortage is affecting total sales, average prices, sales prices per square foot, price discounting and days on market.
How Home Purchases Were Financed:
Interest Rates – Interest rates on residential loans trended up some during 2018, but they have come back down. Here are rates as of April 8, provided by local mortgage broker Adam Consiglio (NMLS ID 1748512) at C & M Financial (tel 505-263-6477, firstname.lastname@example.org)
Conventional 30 year fixed: 4.250% (Nominal rate) 4.297% (APR)
Conventional 15 year fixed: 3.750% 3.830%
Jumbo 30 year fixed: 4.25% 4.265%
Jumbo 15 year fixed 3.875% 3.901%
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales – Through the first quarter this year, there have been 7 foreclosure sales (13% of total sales). These ranged in price from $31,500 – $200,000. The number of foreclosure sales, and their percentage of total sales of single-family homes, for the previous eight years were:
Currently, there are 11 bank-owned houses listed for sale; of those, two are have pending sales. The number of foreclosures has diminished steadily over the past several years, both locally in Taos and nationally.
In the first quarter of this year, 11 condo sales closed, a gain of one over Q1 last year. For the full year 2018, 66 condos sold; in 2017 there were 61 units sold. In peak year 2006, there were 149 condos sold with total sales of $38,643,000.
2019 Q1 dollar sales were up 52.4% over 2018 Q1, from $2,045,900 to $3,118,300. The sales mix this past quarter included more 2- and 3-bedroom units than in the same period last year.
Median price in the first quarter was $241,300 vs. $190,000 in 2018 Q1 (+27.0%). Median price for the full year 2018 was $212,500. Peak median price was $263,000 (in 2007).
Average (mean) price in Q1 was $283,500 this year vs. $204,600 last year (+38.6%). Average price for the full year 2018 was $248,900. In 2007, average price was $279,100.
Price Discounting – For the quarter, final sales price averaged 2.9% less than last asking price when the condo went under contract; the discount from original price was 4.4%. For the full year 2018, final sales price averaged 4.9% less than last asking price; the average discount from original asking price was 6.5%.
Inventory – The number of condos listed for sale at the time of this report was 59, the same as the average for the 12 months of 2018. Peak inventory in 2018 was 74 units available for sale. As with single-family 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 lower sales: 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, and some condo projects do not qualify; therefore, even if the buyer is qualified, lenders who need the Fannie guarantee to be able to sell their loans on the secondary market won’t make a loan on these “non-warrantable” condos.
Foreclosure Sales – There were no foreclosure sales in the first quarter this year. In 2018 there was only one foreclosure sale (1.5% of total units sold). In 2017 there were 5 foreclosure sales (8%).
There were no multi-family sales during the first quarter this year, compared to two in 2018 Q1. For the full year 2018 there were four sales (a 7-unit property, one duplex, and two triplexes) with total sales prices of $1,657,000. In 2017, there were four sales, with a total price of $1,790,000. 2016 had just two sales, totaling $787,500.
There are currently 11 multi-family properties listed for sale. There is one pending sale (a duplex).
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, the return on investment should be attractive to investors; however, the asking price for many of the listed properties does not yield an adequate rate of return for most investors; this is probably the main reason for slow sales.
First quarter unit sales came in 25% below 2018’s pace: 21 vs. 28. Dollar sales were down 33.5%. The winter weather probably was a major factor, since most buyers do not like to walk land in the cold and snow.
Median price in Q1 was up from $68,800 to $75,000. 2018’s median price was $62,700 compared to $64,000 in 2017 (-2.0%). In 2016, median price was $52,300.
Average (mean) price in Q1 was down from $108,400 to $96,100. 2018’s average was $92,300 vs. $89,400 in 2017 (+3.2%). In 2016 it was $73,100.
For the full year 2018, a total of 122 tracts sold, a gain of 3 over 2017 (+2.5%). Dollar volume was up 5.9%, from $10,635,800 to $11,259,700. 2018’s total of 122 units sold was a gain of almost 200% from the market low of 41 sales in 2011; but that was still 64% below peak (2005) level.
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, mostly lower-priced lots for homes in the $250,000-$275,000 price range.
Price Discounting – In the first quarter this year, the discount from the asking price when the property went under contract was 8.7%; the discount from original asking price was 16.9%. For the full year 2018, the discount was 12.5% from last asking price, and 18.3% from original price. In 2017, the discounts were, respectively, 12.1% and 20.0%. In 2016, the discounts were 13.4% and 22.4%.
Average Days on Market – In 2019 Q1, the average was 351 vs. 381 in 2018 Q1. The averages for the past six full years were:
2013 2014 2015 2016 2017 2018
465 390 605 464 469 391
|Up to $50,000||144||154||46||39%||51||42%||9||42%|
|$50,000 – $100,000||168||193||34||29%||42||35%||4||19%|
|$250,001 – $300,000||15||16||2||2%||3||2%||1||5%|
The commercial market has been up and down over the past several years. 2018 had 14 sales, an increase of 9 (180%) over 2017. In 2018, dollar sales were $4,656,000 compared to $2,851,000 in 2017 (+63.3%). In 2016 there were 7 sales totaling $2,890.800. In 2015, there were 17 sales, totaling $8.1 million. In 2014, there were just three sales, totaling $2.3 million. The peak year for commercial sales was 2005, when 19 properties sold, with a total dollar volume of $8,735,600.
In the first quarter of 2019, there were two commercial sales, the same as in 2018 Q1. Total dollar sales were $440,000 vs. $320,000.
Currently, there are 25 commercial properties listed for sale. Of these, two are under contract: an old schoolhouse in town, and the RV park south of Town, which has been pending for years; a “dollar store” company is the buyer, but there is a lengthy due diligence/approval process.
The commercial market does seem to be getting some traction. The major investments by the new ownership at Taos Ski Valley, the inception of air service to Taos from Dallas and Austin, and the generally strong national economy, should begin to stimulate some interest in commercial property.