Year-to-Date August 31, 2022

Taos Real Estate Market Report

January – August 2022 (8 months)

The market is still strong, even if it’s not as crazy as it was in 2021!

Through the first eight months of 2022, the number of sales of Single-Family Homes is down 2% (5 houses) compared to 2021 for the same time period. Condo sales are up by 10 units (20%). Land is down by 23 sales (12%). Commercial sales are up substantially (13 this year vs. 2 last year). 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 worries about the war in Ukraine are having somewhat of a dampening effect. However, the Taos market is not generally as affected by these factors as the national market is. There is still strong buyer interest in Taos, and given the chronic shortage of homes and condos listed for sale, we do not foresee a true market decline with fewer sales and falling prices.

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 2000s leading up to the Great Financial Crisis of 2007-2008. 

So far in 2022, the market has cooled some. We are not seeing a lot of offers written as soon as a new listing comes on the market; bidding wars have subsided some. However, dollar sales are up, as prices continue to rise. Through the first eight months, unit sales are 228 this year vs. 233 last year, a decrease of only 5 sales (-2%). The negative variance to last year has diminished over the past couple of months. One reason may be that the title companies are closing escrows faster than they were, so the number of sales getting closed each month now is greater than the monthly number last year. A new title company opened for business on August 28, and this will definitely speed up escrows. Additionally, with mortgage interest rates so much higher, the number of persons re-financing is way down; this, too, will allow title work to get done faster, and escrows to close faster.

Dollar sales are up $13.9 million (12%), from $115.5 million to $129.4 million, as prices continue to rise. However, the rate of price increase is slowing down from last year’s pace.

Median and Average Prices

Through the first eight months of  2022, the median price (midpoint in the range of prices from low to high) is $477,000 vs. $419,000 in 2021, an increase of $58,000 (+13.8%). The average (mean) is $567,600 vs $495,600 last year, an increase of $72,000 (+14.5%). This reflects an increasing number of high-dollar sales, as well as a 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$310,500$322,500$343,500$425,000$477,000
Average$306,100$326,800$369,500$373,100$398,700$513,800$567,600
Median and average price trends since 2016
Price Discounting

For the year to August 31, actual sales price has averaged 1.7% below the last asking price when the home went under contract; the discount from original asking price is 3.5%. 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% 3.5%
Discounts from original asking price since 2013
Days On Market

The average days on the market so far this year is 121 vs. 143 in 2021, a decrease of 22 days (-15%).  Days on market averaged 250 during 2003 – 2016; since 2016, there has been a steady decrease.

2006201320142015201620172018201920202021 2022 YTD
247244235235226192147151156141121
DOM in 2006, for nine years prior, and this year so far
INVENTORY
Sep 2022Sep 2021Sep 2008
Up to $200k1424190
$200k – $300k2530109
$300k – $400k495269
$400k – $500k383739
$500k – $650k383435
$650k – $800k292827
$800k – $1mil261436
Over $1mil334013
     TOTAL252259518
Inventory by price segment
UNIT SALES
2019202020212022 YTD
Up to $200k5861449
$200k – $300k64704935
$300k – $400k74836438
$400k – $500k27455539
$500k – $650k24425345
$650k – $800k16153429
$800k – $1mil4152115
Over $1mil462918
TOTAL271337349228
Unit sales by price segment
Inventory

At the time this report was prepared, there were 252 homes listed for sale, down 2 from 254 last month, and down 7 from a year ago, when there were 259. The low point this year was 194 in April. 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 252 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.

2013201420152016201720182019202020212022 YTD
334333324316285264274257225219
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.  

Home Purchase Financing
2011201620202021 2022 YTD
Cash65 43%91 36%103 31%139 40% 75 33%
Conventional loan66 44%129 52%200 59%180 52% 129 57%
FHA loan8 5%11 4%11 3%14 4% 6 3%
VA loan1 1%10 4%13 4%11 3% 11 5%
Seller financing8 5%7 3%4 1%2 1% 6 3%
Other2 1%1 1%6 2%3 1% 1 0%
    Total150100%249100%337 100%349 100% 228100%
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 6.9%, up over 4 points from the historic lows in 2021.

Conventional 30-year fixed 6.9% 
Conventional 15-year fixed5.3%
5/1 Adjustable4.7%
Bankrate.com‘s Current Rates as of Sep. 29, 2022
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales

For the year through August, 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%
2022YTD00%
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 61 vs. 51 for the same time period in 2021, a gain of 10 units (20%). Dollar sales are up 42%. 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 eight months is $349,000 vs. $317,200 last year, an increase of $31,800 (10%).  Average price is also up, at $374,100 vs. $316,100, a gain of $58,000 (18%). 

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 1.1% below original price.

20142015201620172018201920202021 2022 YTD
12.7%8.6%11.8%6.7%6.5%5.5%3.2%3.3% 1.1%
Discounts from original asking price 2014 – 2022 YTD
Inventory

The number of condos listed for sale at the time of this report was 39, up 3 from a month ago, and down 22 from 61 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
Sep 2022Sep 2021Sept 2008
Up to $150k 0240
$150k – $250k 21250
$250k – $350k101551
$350k – $500k181856
Over $500k 91429
     TOTAL3961226
Inventory by price segment
UNIT SALES
201120202021 2022 YTD
Up to $150k16108 1
$150k – $250k82116 10
$250k – $350k31830 22
$350k – $500k12222 18
Over $500k136 10
     TOTAL297482 61
Unit sales by price segment
2011201620202021 2022 YTD
Cash14 48%34 51%43 58%36 44% 28 46%
Conventional loan15 52%32 48%30 41%45 55% 33 54%
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% 61100%
How Condo Purchases Were Financed
Foreclosure Sales

There have been no foreclosure sales so far in 2022. There were none in the full year 2021.

There have been 5 multi-family sales through the first eight months of 2022, a decrease of 1 compared 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 6 multi-family listings, with one of these under contract.

Land sales have slowed from last year’s pace.

Land sales really took off last year 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–although the number of sales was still 27% fewer than peak year 2005. 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 163 closed sales, down from 186 last year for the same time period, a drop of 23 sales (12%). Dollar sales, however, are UP 10%, at $21.4 million this year vs. $1.9.5 million last year.

Median price year-to-date is $83,500 vs. $67,900, an increase of $15,600 (23%). Average price is up $26,200 (25%), from $105,000 last year to $131,200 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, especially of building costs stabilize or come down some; 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 104126
$50k – $100k 149160
$100k – $150k 60 64
$150k – $200k 5648
$200k – $250k 3029
$250k – $300k 1318
Over $300k 5854
     TOTAL470499
Comparative inventory by price segment
UNIT SALES
201720202021 2022 YTD
46538340
34578460
16172624
15162112
3414 8
207 1
241218
118147247163
Yearly unit sales by price segment

Price Discounting

For the year to August 31, actual sales price has averaged 8.9% below the last asking price when the home went under contract; the discount from original asking price is 12.8.

Days On Market

The average days on the market so far this year is 493 vs. 387 in 2021, an increase of 106 days (27%).  

20132014201520162017201820192020 2021 2022 YTD
334333324316285264274257 225 214
Average inventory 2013 – 2022
How Land Purchases Were Financed
2022 YTD
Cash 118 72%
Conventional loan 25 15%
Seller financing 19 12%
Other 1 1%
    Total 163100%
How Home Purchases Were Financed

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

So far this year, there have been 13 sales with a total dollar volume of $11,774,000. 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 20212022 YTD
2793177514 12 8613
Commercial Sales 2011 – 2022
Taos Real Estate Market Report