First Half 2022

Taos Real Estate Market Report

January – June 2022

The market is slowing down some…

Through the first half of this year, sales of Single-family Homes are down slightly (5 houses) compared to 2021. Condo sales are up by four units. Land is down by 18 sales. The market has cooled 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 a dampening effect.

From mid-2020 through 2021, an incremental layer of buyers was added to a market that has 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 slightly compared to last year. However, dollar sales are up, as prices continue to rise. Through the first six months, unit sales are 171 this year vs. 176 last year, a decrease of 5 sales (-2.8%). Dollar sales are up $18.4 million (22%), from $81.9 million to $100.3 million.

Median and Average Prices

For the first six months of  2022, the median price (midpoint in the range of prices from low to high) is $475,000 vs. $410,000 in 2021, an increase of $65,000 (+16%). The average (mean) is $586,500 vs $465,600 last year, an increase of $120,900 (+26%). This reflects the increasing number of high-dollar sales, as well as the general rise in the overall price level.

Price2016201720182019202020212022 YTD
Median$283,500$300,000$311,000$322,500$344,000$410,000$475,000
Average$306,100$326,800$370,500$373,100$390,500$446,100$586,500
Median and average price trends since 2016
Price Discounting

Through the first six months, actual sales price has averaged 2.0% below the last asking price when the home went under contract; the discount from original asking price is 3.7%. 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% 3.7%
Discounts from original asking price since 2013
Days On Market

The average days on the market so far this year is 134 vs. 148 in 2021, a decrease of 14 days (-10%). 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
Jul 2022Jul 2021Sep 2008
Up to $200k1425190
$200k – $300k2429109
$300k – $400k425169
$400k – $500k383839
$500k – $650k363235
$650k – $800k291827
$800k – $1mil291336
Over $1mil293613
     TOTAL241242518
Comparative inventory by price segment
UNIT SALES
2019202020212022 YTD
Up to $200k5861446
$200k – $300k64704924
$300k – $400k74836434
$400k – $500k27455527
$500k – $650k24425334
$650k – $800k16153419
$800k – $1mil4152110
Over $1mil462917
     TOTAL271337349171
Unit sales by price segment
Inventory

At the time of this report, there are 241 homes listed for sale, up from 212 last month, about the same as a year ago, when there were 242. The highest inventory is 2021 was 259 (in September). 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 and 2021. 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.

201320142015201620172018201920202021
334333324316285264274257225
Average inventory 2013 – 2021

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. Even though prices seem high 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 compare favorably to other destinations in the intermountain west!

Home Purchase Financing
2011201620202021 2022YTD
Cash65 43%91 36%103 31%139 40% 57 33%
Conventional loan66 44%129 52%200 59%180 52% 97 57%
FHA loan8 5%11 4%11 3%14 4% 5 3%
VA loan1 1%10 4%13 4%11 3% 8 5%
Seller financing8 5%7 3%4 1%2 1% 4 2%
Other2 1%1 1%6 2%3 1% 0 0%
    Total150100%249100%337 100%349 100% 171100%
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 5.84%, up almost 3 points from the historic lows in 2021.

Conventional 30-year fixed 5.84% 
Conventional 15-year fixed5.00%
5/1 Adjustable4.26%
Bankrate.com‘s Current Rates as of Jult 27 2022
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales

For the year through June, 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.

This table shows the number of foreclosure sales, and their percentage of total sales of single-family homes, for the last ten years.

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 47 vs. 43 for the same time period in 2021, a gain of 4 units (9%).  Dollar sales are up 24%. This is a little surprising since the condo inventory shortage is even worse than for single-family homes.  As with single-family homes, there are no signs that inventory will increase significantly this year. Therefore, prices should continue to increase, albeit more slowly than during the surge of 2021.

Median price through the first six months is $345,000 vs. $317,200 last year. an increase of $27,800 (9%).  Average price was also up, at $360,000 vs. $317,300, a gain of $42,700 (14%). 

Price Discounting

Year-to-date final sales price has averaged only 0.7% less than last asking price when the condo went under contract; sales have averaged 2.5% above original price.

20142015201620172018201920202021 2022 YTD
12.7%8.6%11.8%6.7%6.5%5.5%3.2%3.3%2.5% above
Discounts from original asking price 2014 – 2022 YTD
Inventory

The number of condos listed for sale at the time of this report was 36, down 5 from 41 a month ago, and down 26 from 62 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 43
Steady average inventory decrease 2013 – 2022
INVENTORY
Jul 2022Jul 2021Sept 2008
Up to $150k 0140
$150k – $250k 21250
$250k – $350k132451
$350k – $500k141356
Over $500k 7829
     TOTAL3658226
Yearly inventory by price segment
UNIT SALES
2011202020212022 YTD
# sales# sales# sales# sales
16108 1
82116 8
31830 16
12222 13
136 8
297482 47
Yearly unit sales by price segment
2011201620202021 2022 YTD
Cash14 48%34 51%43 58%36 44% 21 45%
Conventional loan15 52%32 48%30 41%45 55% 26 55%
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% 47100%
How Condo Purchases Were Financed

There have been 5 multi-family sales through the first six months of 2022, an increase from 3 for 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 121 closed sales, down from 138 last year for the same time period, a drop of 17 sales (12%). Dollar sales, however, are UP 14%, at $2.4 million this year vs. $1.3 million last yeat.

Median price year-to-date is $86,000 vs. $63,000, an increase of $23,200 (37%). Average price is up $30,000 (30%), from $100,300 last year to $130,300 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 110133
$50k – $100k 164175
$100k – $150k 60 64
$150k – $200k 5547
$200k – $250k 3225
$250k – $300k 1118
Over $300k 6151
     TOTAL493513
Yearly inventory by price segment
UNIT SALES
201720202021 2022 YTD
465383
345784
161726
151621
3414
207
2412
118147247
Yearly unit sales by price segment

There have been no commercial sales in the first three 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.

2011201220132014201520162017201820192020
2793177514128
Commercial Sales 2011 – 2020

Currently, there are 31 commercial properties listed for sale, the same as last month. Three are under contract.

2011%2016%2020%2021 YTD%
Cash28696370110754485
Conventional loan51267261835
Seller financing717202296510
Other12111100
    Total41100%90100%146100%52100%
How Land Purchases Were Financed

The availability of financing for land purchases is more limited than it was during the pre-recession years of 2000 – 2007.

Days on Market

For the first quarter of the year, the average time to sell a piece of land has been 380 days.  This is down 6% from the same time period in 2020, but not far off the average of 410 over the past 18 years.

Taos Real Estate Market Report