View of the Rio Pueblo from Riverbend Subdivision
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 continues hot! There has been no let-up from last year’s surge. Fueled by the work-from-home paradigm that the Covid-19 pandemic created, and by extremely low interest rates, market activity hit a new high gear last year. The momentum continues in 2021. Robust demand for property in Taos is expected to continue into the foreseeable future. Sales of homes and condos are running well ahead of last year’s pace, despite very low inventory of homes and condos listed for sale. Land sales are also way up.
Last year, an incremental layer of buyers was added to a market that has been steadily gaining since 2015. After Covid-related spring lockdowns were lifted, the market got hot, and it has kept on cooking! Buying activity has been brisk, even during winter and early spring, which are typically slower. Homes are going under contract fast–sometimes in a day or two. We are also seeing more cases of multiple offers, “bidding wars”, and homes selling above asking price. This kind of market behavior was heretofore very uncommon in Taos, even during the boom years of 2000 – 2006. The overall price level is rising at an accelerated rate. We are also seeing an increase in sales of higher-priced homes, as well as of homes in less popular areas.
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. Taos will attract some of these people.
Through the first four months, unit sales are 117 this year vs. 90 last year, a gain of 27 sales (+30%). Dollar sales are up $25.1 million (80%), from $31.4 million to $56.5 million.
Currently, there are 46 sales pending, down from 48 last month and from 59 two months ago, but still well above the historical average of 15-30 homes under contract at any given time. The high number of pending sales is partially due to delays in closing sales contracts caused by a severe backlog at Taos’s only two title companies; they simply have been unable to process orders in a timely fashion.
Median and Average Prices – Through April, the median price (midpoint in the range of prices from low to high) in 2021 is $403,000 vs. $319,100 in 2020, an increase of $83,900 (+26%). The average (mean) is $457,800 this year vs $349,200 last year, an increase of $108,600 (+31%). Some of the increases are due to the sales mix, with relatively more higher-priced homes selling; however, price per square foot of just about every type of home is up dramatically!
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 $283,500 300,000 311,000 322,500 344,000 403,000
Average $306,100 326,800 370,500 373,100 390,500 457,800
Price Discounting – For the year to April 30, actual sales price has averaged 3.1% below the last asking price when the home went under contract; the discount from original asking price is 4.6%. The trend of demand exceeding supply has caused the discount from original price to decrease steadily starting in 2013 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% 4.6%
Days On Market – The average days on the market so far this year is 126 vs. 160 in 2020, a decrease of 34 days (-21%). However, we have seen desirable homes in preferred locations going under contract much faster than the average. Many of our buyers are from out of town, and they often are frustrated that a home they are interested in goes under contract before they can get here to see it. Sometimes a video showing must suffice for a buyer to make a timely offer. Days on market averaged 250 during 2003 – 2016; 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
247 244 235 235 226 192 147 151 156 126
Here is a chart with data on current inventory and unit sales by price segment for the year:
|| May 2020
|| Sep 2008
|Up to $200,000||23||49||190||66||44%||58||21%||61||18%||14||12%|
|200,001 – $300,000||26||40||109||37||25%||64||24%||70||21%||22||19%|
|$300,001 – $400,000||42||46||69||20||13%||74||27%||83||25%||22||19%|
|$400,001 – $500,000||29||23||39||12||8%||27||10%||45||13 %||20||17%|
|$500,001 – $650,000||26||30||35||9||6%||24||9%||42||13%||21||18%|
|$650,001 – $800,000||16||24||27||4||3%||16||6%||15||4%||8||7%|
|$800,001 – $1million
Inventory – At the time this report was prepared, inventory had increased for only the second time since June 2020. There are now 211 homes listed for sale, up from 196 last month and from 181 two months ago, but down 35 units from 243 a year ago (-14%). 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 will probably average about the same as last year. Taos inventory consists of a wide variety of size, price, style, location, and condition. It is difficult to find more than a few homes to show a buyer that might meet most of his/her criteria.
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 demand 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 remain inadequate relative to demand. Even though prices seem high (for Taos) at this point in time, they will probably continue to rise, albeit maybe not as much as they did last year. And Taos prices still seem relatively cheap for many buyers coming from more-expensive markets.
How Home Purchases Were Financed:
|2011||2016||2020|| 2021 YTD
Interest Rates – Over the past few months, rates on home loans have increased a little from the low point last summer, but they remain extremely low by long-term historical standards. The 30-year fixed-rate loan is now averaging 3.09%, down very slightly from 3.11% a month ago. Despite some recent volatility in the bond market–due to concerns about rising inflation and Federal Reserve policy–rates are not expected to increase much this year. Here are current rates as posted by Bankrate.com on May 27, 2021:
Conventional 30-year fixed: 3.09 % (Nominal) 3.29 % (APR)
Conventional 15-year fixed: 2.37 % 2.65 %
Jumbo 30-year fixed: 3.10 % 3.20 %
5/1 Adjustable 3.14 % 3.99 %
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales – For the year through April, there have been three foreclosure sales. 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 three bank-owned houses listed for sale; one of those is under contract.
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||( 2%)|
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.
April dropped from 6 units sold last year to 3 this year, the first decrease this year. However, year-to-date unit sales are still 106% above last year’s pace, at 33 vs. 16. Dollar sales are up 79%. This is a strong start to the year, but the condo inventory shortage is even worse than for single-family homes, so this will again be a constraint on sales. As with single-family homes, there are no signs that inventory will increase significantly this year.
At the time of this report, there are 9 condo sales pending, down from 12 last month, but significantly more than the 3-7 that was typical up until last year. 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 through four months is $310,000 vs. $316,000 last year. a decrease of $6,000 (-2%). Average price is also down, at $285,500 vs. $328,400, a drop of $42,900 (-13%). Please note that 33 sales is probably too small a number to be representative of how the year will turn out; such a small statistical sample can be easily skewed by a change in the mix of lower- vs. higher-priced units. Anecdotally, prices are definitely rising; we should see actual evidence of rising prices in the data as the year progresses.
Price Discounting – Year-to-date final sales price has averaged 3.4% less than last asking price when the condo went under contract; the discount from original price is 5.8%. Again, four months is too small a data sample to project a trend; and 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% 5.8%
Inventory – The number of condos listed for sale at the time of this report was 38, down 2 from 40 last month, and down 5 from 43 at this time a year ago. Of the 38 units currently available for purchase, 16 (42%) are at Taos Ski Valley, while only 22 are in or near the Town of Taos. Of those 22, only 4 do not have a pending sale! buyer. If a buyer today wants a condo anywhere but at Taos Ski Valley, priced up to $350,000, there are only three available listings! 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:
||Sept.||# of||# of||# of|
|Up to $150,000||1||2||40||16||55%||10||13%||6||18%|
|$150,001 – $250,000||5||11||50||8||28%||21||28%||6||18%|
|$250,001 – $350,000||15||10||51||3||10 %||18||24%||14||42%|
|$350,001 – $500,000||9||18||56||1||3%||22||30%||7||21%|
How Condo Purchases Were Financed:
There have been no multi-family sales through the first four months of 2021, down two for the same period last year. Multi-family is and has always been 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.
Rents have been trending higher for years, so multi-family income properties should yield fairly attractive returns on investment. especially with today’s low interest rates (cost of capital). However, obtaining conventional financing for multi-family properties larger than a duplex can be difficult, due to the lack of sales comparables needed for appraisals.
Currently, there are 10 multi-family listings, with 6 of these under contract. So this segment of the market may be starting to gain some traction.
After years in the doldrums, land sales are really starting to pick up! April had 22 closed sales, the highest number since a few months in 2006 and 2007. Some home buyers who have been frustrated in their search for an existing home to buy are deciding to buy land and build. Currently there are 64 pending sales, down 4 from 68 last month, but still many more than typical. Of course, as with both single-family and homes and condos, a portion of the increase in pending sales is 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.
Year-to-date unit sales are 77 vs. 36 in the same period in 2020, a gain of 41 (+114%). Dollar sales are $6.48 million vs. $10.12 million last year. However, last year had on sale of $7 million (a ranch property north of Taos). Excluding that one sale, dollar sales are UP $3.36 million (+107%).
Median price year-to-date is $61,500 this year vs. $79,500 last year, a decrease of $18,000 (-23%). Median price is negligibly affected by that one large sale. Average price is down, even excluding the $7 million sale last year: $84,200 this year vs. $89,300 last year, a decrease of $5,100 (-6%). The sales mix this year includes more lower-priced properties, so the decreases in median and average price do indicate that prices are falling. As interest in land continues to grow, prices will start to rise, but that probably won’t happen until some of the inventory of is absorbed. Whereas in the market for homes and condos there is much more demand than supply, in the land market the reverse is true.
Current inventory of 520 tracts listed for sale is up from 513 one month ago, and up 34 listings from 486 a year ago.
Here is a chart indicating inventory and sales by price segment:
| Same Month
|Up to $50,000||121||131||46||39%||52||36%||27||35%|
|$50,000 – $100,000||174||161||34||29%||53||36%||31||40%|
|$250,001 – $300,000||20||17||2||2%||0||0%||0||0%|
Days On Market – For the first four months of the year, the average time to sell a piece of land has been 350 days. This is down 75 days (-18%) from the same time period in 2020. The average over the past 18 years is 410 days from the time a piece of land is listed until it goes under contract.
How Land Purchases Were Financed:
The availability of financing for land purchases is more limited than it was during the years before the “Great Financial Crisis” of 2008.
There have been no commercial sales in the first four months of 2021, compared to two in the same period in 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 34 commercial properties listed for sale, up three from last month. At this time, four are under contract.