Year-to-Date July 31, 2022

Taos Real Estate Market Report

January – July 2022 (7 months)

The market is strong, but not quite as hot as it was.

Through the first seven months of 2022, the number of sales of Single-family Homes is down 7% (15 houses) compared to 2021 for the same time period. Condo sales are up by 8 units (17%).  Land is down by 22 sales (14%). Commercial sales are up substantially. The market is cooling some from the torrid pace experienced from mid-2020 through 2021. There is still strong buyer interest in Taos, but higher interest rates, persistent inflation, the stock market decline, and impacts from the war in Ukraine are having somewhat of a dampening effect.   

Click each title below to view the data for that property type.

From mid-2020 through 2021, an incremental layer of buyers was added to a market that had been steadily gaining since 2015. After Covid-related lockdowns were lifted in spring 2020, the market got hot; then it really surged in 2021. Homes sold much faster than had been typical in Taos–sometimes in a day or two. There were numerous cases of multiple offers, “bidding wars”, and homes selling well above asking price. There were many more homes sold in the high end of the price range than what was typical for Taos. Prices rose at a rapid rate–over 20% per year in some cases. This kind of market behavior had been very uncommon in Taos – even during the boom years of the early 2000’s leading up to the Great Financial Crisis of 2007-2008. 

So far in 2022, the market has cooled some. The number of closed sales of homes is down compared to last year. However, dollar sales are up, as prices continue to rise. Through the first seven months, unit sales are 190 this year vs. 205 last year, a decrease of 15 sales (-7.3%).  Dollar sales are up $10.7 million (10.7%), from $100.4 million to $111.1 million.

Median and Average Prices

Through the first seven months of  2022, the median price (midpoint in the range of prices from low to high) is $482,300 vs. $419,000 in 2021, an increase of $63,300 (+15.1%). The average (mean) is $584,800 vs $489,700 last year, an increase of $95,100 (+19.4%). This reflects the increasing number of high-dollar sales, as well as the rise in the overall price level. Here is how median and average prices have changed over the past seven years:

Price2016201720182019202020212022 YTD
Median$283,500$300,000$311,000$322,500$344,000$410,000$482,300
Average$306,100$326,800$370,500$373,100$390,500$446,100$584,800
Median and average price trends since 2016
Price Discounting

For the year to July 31, actual sales price has averaged 2.2% below the last asking price when the home went under contract; the discount from original asking price is 3.8%. The trend of demand exceeding supply has caused the discount from original price to decrease steadily starting in 2013:

201320142015201620172018201920202021 2022 YTD
18.4%16.9%13.9%13.3%9.4%10.3%7.8%7.2%4.5% 3.8%
Discounts from original asking price since 2013
Days On Market

The average days on the market so far this year is 128 vs. 143 in 2021, a decrease of 15 days (-110%). Days on market averaged 250 during 2003 – 2016; since 2016, there has been a steady decrease.

2006201320142015201620172018201920202021 2022 YTD
247244235235226192147151156141 128
DOM in 2006, for nine years prior, and this year so far
INVENTORY
Aug 2022Aug 2021Sep 2008
Up to $200k1526190
$200k – $300k2529109
$300k – $400k475069
$400k – $500k403439
$500k – $650k403635
$650k – $800k292227
$800k – $1mil261636
Over $1mil323813
     TOTAL254251518
Inventory by price segment
UNIT SALES
2019202020212022 YTD
Up to $200k5861447
$200k – $300k64704927
$300k – $400k74836435
$400k – $500k27455530
$500k – $650k24425337
$650k – $800k16153423
$800k – $1mil4152113
Over $1mil462918
TOTAL271337349190
Unit sales by price segment
Inventory

At the time of this report, there are 254 homes listed for sale, up from 241 last month, and up slightly from a year ago, when there were 251. The inventory has increased steadily each month from a low point of 194 in April – albeit minimally. The highest inventory in the past twelve months was 259 (in September 2021). In September 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 and 2021. Taos inventory consists of a wide variety of size, price, style, location, and condition – everything from mobile to million-dollar homes. With only 254 listings (many of which are under contract), it is difficult to find more than a few homes to show a buyer that might meet most of his/her criteria.

201320142015201620172018201920202021 2022 YTD
334333324316285264274257225214
Average inventory 2013 – 2022

With demand still robust – 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 for the foreseeable future. Even though prices seem high at this point in time, they will probably continue to rise, although more slowly than they have risen during the past two years. Taos prices still compare favorably to other destinations in the intermountain west!

Home Purchase Financing
2011201620202021 2022 YTD
Cash65 43%91 36%103 31%139 40% 61 32%
Conventional loan66 44%129 52%200 59%180 52% 112 59%
FHA loan8 5%11 4%11 3%14 4% 5 3%
VA loan1 1%10 4%13 4%11 3% 7 4%
Seller financing8 5%7 3%4 1%2 1% 4 2%
Other2 1%1 1%6 2%3 1% 1 1%
    Total150100%249100%337 100%349 100% 190100%
How Home Purchases Were Financed
Interest Rates

Since the Federal Reserve started its anti-inflation program of raising short-term interest rates, the rates on home loans have increased dramatically: The 30-year fixed-rate loan is now averaging 5.92%, up over 3 points from the historic lows in 2021.

Conventional 30-year fixed 5.92% 
Conventional 15-year fixed5.08%
5/1 Adjustable4.33%
Bankrate.com‘s Current Rates as of Aug. 30, 2022
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales

For the year through July, there have been no foreclosure sales. For the full year of 2021, there were just two foreclosure sales (2% 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.

20114429%
20125528%
20133716%
20145022%
20153413%
20163414%
20172910%
2018249%
2019176%
202093%
202122%
2022 YTD00%
Foreclosure Sales: % of total sales of Single-Family homes 2011 – 2021

Please Note: These data do not include any condominiums developed or offered for sale by Taos Ski Valley Resort; those condos are not listed in the Taos MLS.

Year-to-date unit sales are 54 vs. 46 for the same time period in 2021, a gain of 8 units (17%). Dollar sales are up 41%. This is despite the fact that the condo inventory shortage is even worse than that for single-family homes.  As with homes, there are no signs that inventory will increase significantly any time soon; therefore, prices should continue to increase; as with homes, the rate of price increase will be slower than during the surge of 2020-2021.

Median price through the first seven months is $349,500 vs. $316,100 last year, an increase of $33,400 (10.6%).  Average price is also up, at $380,700 vs. $316,600, a gain of $64,100 (20.2%). 

Price Discounting

Year-to-date final sales price has averaged 1.7% less than the last asking price when the condo went under contract; sales have averaged 0.8% below original price.

20142015201620172018201920202021 2022 YTD
12.7%8.6%11.8%6.7%6.5%5.5%3.2%3.3% 0.8%
Discounts from original asking price 2014 – 2022 YTD
Inventory

The number of condos listed for sale at the time of this report was 36, the same as a month ago, and down 28 from 64 listings at this time a year ago. 

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.

2013201420152016201720182019202020212022YTD
1078178655859564948 44
Steady average inventory decrease 2013 – 2022
INVENTORY
Aug 2022Aug 2021Sept 2008
Up to $150k 0140
$150k – $250k 21350
$250k – $350k102051
$350k – $500k171756
Over $500k 71129
     TOTAL3662226
Inventory by price segment
UNIT SALES
201120202021 2022 YTD
Up to $150k16108 1
$150k – $250k82116 8
$250k – $350k31830 20
$350k – $500k12222 15
Over $500k136 10
     TOTAL297482 54
Unit sales by price segment
How Condos Were Purchased2011201620202021 2022 YTD
Cash14 48%34 51%43 58%36 44% 24 44%
Conventional loan15 52%32 48%30 41%45 55% 30 56%
Seller financing0 0%1 1%1 1%0 0% 0 0%
Other0 0%0 0%0 0%1 1% 0 0%
    Total29100%67100%74 100%82100% 54100%
How Condo Purchases Were Financed

There have been 5 multi-family sales through the first seven months of 2022, equal to the same time 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. However, with interest rates rising (i.e., cost of capital), buyers may start to require higher “capitalization rates.” Higher cap rates mean buyers would pay less for a given income stream (net operating income).

Currently, there are 8 multi-family listings, with two of these under contract. So this segment of the market may be starting to gain some traction.

Land sales have cooled some, too.

Land sales really took off in 2021 after being in the doldrums ever since the recession that followed the Great Financial Crisis of 2007-2008. Unit sales in 2021 were up 68% over 2020! Some home buyers were frustrated in their search for an existing home to buy decided to buy land and build. 

So far in 2022, land sales have cooled some from 2021’s pace: there have been 136 closed sales, down from 158 last year for the same time period, a drop of 22 sales (14%). Dollar sales, however, are UP 9%, at $18.0 million this year vs. $16.6 million last year. This year, continued very high building costs coupled with long lead times to start and complete construction are probably dampening buyer interest in land, to some extent. The land market is not yet a hot seller’s market, but the long-term trend is improving.

Median price year-to-date is $85,000 vs. $66,100, an increase of $18,900 (29%). Average price is up $27,400 (26%), from $105,200 last year to $132,600 this year. Given that the supply of homes and condos listed for sale is not expected to increase much, interest in land should continues to grow; therefore, prices should trend upward but only gradually. 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 494 tracts listed for sale is down from 513 a year ago.

INVENTORY
Current MonthSame Month last year
Up to $50k 114133
$50k – $100k 168175
$100k – $150k 58 64
$150k – $200k 5647
$200k – $250k 3425
$250k – $300k 1018
Over $300k 6251
     TOTAL502513
Yearly inventory by price segment
UNIT SALES
201720202021 2022 YTD
465383 33
345784 51
161726 20
151621 10
3414 7
207 0
2412 15
118147247 136
Yearly unit sales by price segment
Price2016201720182019202020212022 YTD
Median$52,300$64,500$62,300$67,200$70,000$75,000$ 85,000
Average$73,100$89,800$91,900$87,500$134,600$109,400$132,600
Median and average price trends since 2016
Price Discounting

For the year to July 31, actual sales price has averaged 8.5% below the last asking price when the land went under contract; the discount from original asking price is 12.4%.  This is another indicator that the land market is not –at least yet–a hot seller’s market.

201320142015201620172018201920202021 2022 YTD
n/a17.0%18.4%22.4%20.0%18.3%15.9%14.5%12.2% 12.4%
Discounts from original asking price since 2013
Days On Market

The average days on the market so far this year is 458 vs. 345 in 2021, an increase of 113 days (33%).  

2006201320142015201620172018201920202021 2022 YTD
374465390605464472368332471356 458
DOM in 2006, for nine years prior, and this year so far

The commercial market has seen a surge in activity in 2022!

So far this year, there have been 12 sales with a total dollar volume of $11,554,000. Three of these sales were over $1 million: the old San Geronimo Lodge changed hands again at a price of $2.4 million; a large retail complex near the Plaza sold for $1,035,000; and the old El Taoseno Restaurant sold for $1.6 million. For the entire year 2021, there were only 6 sales, with a total dollar volume of $1.9 million.  The lingering impacts of the Covid pandemic continued to affect the commercial sector in 2021. Confidence has improved in 2022. Additionally, the legalization of cannabis has added a new element of commercial buyers to the market. With the growing number of people moving to Taos (for either full-time or extended stay living), the demand for commercial services—and therefore commercial real estate—should continue to increase.

2011201220132014201520162017201820192020 2021 2022 YTD
2793177514 12 8 6 12
Commercial Sales 2011 – 2022

Taos Real Estate Market Report