Taos Real Estate Market Report
January – June 2023 (6 months)
The market has cooled off from the super-hot conditions of 2020-2022—but it is still strong!
Through the first six months of 2023, sales have lagged 2022’s volume, with declines in all categories of property. Total market (all categories) number of sales is down 27%; dollar sales are down 36%. Single-Family Homes unit sales are down 35%. Condo unit sales are down 51%. Land sales are down 13%. There have been no Multi-family sales so far. The Commercial market is down from 11 to 2 closed sales. These declines are not surprising: the torrid pace that gripped the market from mid-2020 through the end of 2022 was unsustainable–some correction was inevitable. As Covid-19 pandemic fears subsided, people’s rush to get out of urban areas to work from home in more rural towns abated somewhat. And with even fewer homes and condos available for purchase, and with mortgage interest rates up from 3% to 6-7%, there had to be some pull-back.
During the buying stampede, home prices rose at an unprecedented rate (20%-25% per year in many cases). In 2023, prices for single-family homes haven’t risen much if at all; they may have fallen slightly. Our inventory is so varied that it is difficult to measure precisely. There are still more buyers than sellers, and this trend will continue; therefore, prices should remain buoyant—we don’t expect to see markedly falling prices.
Condo average prices are up significantly. With so few sales year-to-date, the averages may be skewed by the sales mix (unit sizes and types); however, given that the condo inventory is extremely low, it is not surprising that prices may be continuing to rise at a faster rate than home prices are.
The land market is pacing below last year by about 13% in terms of the number of sales. This is probably a function of the overall market cooling, as well as continued very high building costs and lead times to start and complete home construction.
Click each title below to view the data for that property type.
For the year to June 30, unit sales are 131 this year vs. 175 last year, a decrease of 44 sales (-25.1%). At the time of writing this report, July sales look to be tracking below last July’s pace; however, there are 27 pending sales, so the month may end better than what appears now.
Dollar sales for the first half of the year are down 30.8%, from $101.3 million in 2022 to $70.1 million in 2023. The market price level rose dramatically from mid- 2020 through 2022, when demand way outstripped supply. Prices rose 20% per year (more in some cases). In addition to the overall price level rising, there was an increase in sales of higher-priced homes. In 2022, 34 homes sold at $1 million or more. That was up from 29 in 2021, and from 7 in 2020. With interest rates having more than doubled, we may see some decrease in the number of high-dollar sales. And with the buying frenzy having cooled, we are not seeing as many bidding wars resulting in selling prices way above asking prices.
Median and Average Prices
For the year through June, the median price (midpoint in the range of prices from low to high) was $475,000 vs. $470,000 in 2022 for the same time frame, an increase of $5,000 (+1.1%). The average (mean) was $535,400 vs. $578,800 last year, a decrease of $43,400 (-7.5%). Here is how median and average prices have changed since 2016 over the past years:
Through the first six this year, actual sales price has averaged 4.3% below the last asking price when the home went under contract; the discount from original asking price is 9.3%. Some sellers have been pricing homes as if the market were as hot as it was during the big surge of 2021-2022. We are seeing a much higher number of price reductions than we did for the two previous years.
Days On Market
For year-to-date 2023 , the average days on market is 126, a decrease of 6 days (-4.5%) compared to the same period in 2022. Due to the very limited inventory of homes available for purchase, average DOM has dropped dramatically from the Taos average during the years 2000-2020, when it took about eight months to sell a home! Today’s average is much lower, but still high compared to many parts of the country, where homes typically sell in 30-45 days. However, good homes in Taos in preferred neighborhoods are selling much faster than the average.
|July 2023||July 2022||Sep 2008|
|Up to $200k||9||14||190|
|$200k – $300k||12||24||109|
|$300k – $400k||24||42||69|
|$400k – $500k||35||38||39|
|$500k – $650k||34||36||35|
|$650k – $800k||28||29||27|
|$800k – $1mil||10||29||36|
|Up to $200k||58||61||44||26||9|
|$200k – $300k||64||70||49||47||13|
|$300k – $400k||74||83||64||72||27|
|$400k – $500k||27||45||55||62||28|
|$500k – $650k||24||42||53||66||18|
|$650k – $800k||16||15||34||43||16|
|$800k – $1mil||4||15||21||22||10|
At the time this report was prepared, there were 187 homes listed for sale, up 28 (+18%) from three months ago, but down 54 (-22%) from a year ago, when there were 241 homes for sale. The low point in 2022 was 194 in April; the high point was 254 in August. In September 2008, there were 518 homes listed for sale. Taos inventory consists of a wide variety of size, price, style, location, and condition — everything from manufactured to luxury homes. With only 187 listings on the market (which includes some that 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.
There are no indications that inventory will increase substantially any time in the near future. There is very little “spec” building going on, and no increase in the listing of existing homes is expected. Many current owners are enjoying ultra-low interest rates on their home loans, so they are “staying put” for the time being. The inventory will remain inadequate relative to demand. This should keep prices from falling significantly even if the market cooling continues.
Home Purchase Financing
As soon as the Federal Reserve started its anti-inflation program of raising short-term interest rates last year, the rates on home loans also increased dramatically. The 30-year fixed rate loan jumped from around 3% in late 2021 to around 7% in November 2022. The 30-year is averaging 7.19% at the time of this report, up from 6.39% three months ago. Buyers are probably adjusting to the new normal, after being spoiled by the unbelievably low rates that were available in 2020-2021.
|Conventional 30-year fixed||7.19%|
|Conventional 15-year fixed||6.52%|
Note: Interest rates are impacted by occupancy, credit score, and down payment.
There has been only one foreclosure sale through the first half of 2023. For the full year 2022, there were none. The number of foreclosures has diminished steadily over the past several years. Currently, there are just three bank-owned houses listed for sale; two have pending sales.
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.
After a strong 2022, Condo sales through the first half of the year are down sharply: only 23 closed sales in 2023 vs. 47 in 2022 (-51%). Dollar sales are down 35%, from $16.9 million to $11.0 million. The inventory of condos listed for sale is even more limited than it was last year, so this is a constraint on the number of sales. As is the case with homes, there are no signs that inventory will increase significantly any time soon; therefore, prices should continue remain fairly firm, even in a cooler market.
Median price for the first six months this year was $412,000 vs. $345,000 for the same time period in 2022, an increase of $67,000 (+19%). Average price was also up, at $479,500 vs. $360,000, a gain of $119,500 (+33%). With such a disparity in the number of sales this year vs. last year, it is difficult to gauge a trend. The outsize increases in median and average price may diminish some of the rest of the year.
For the first half, final sales price has averaged 3.2% less than the last asking price when the condo went under contract, and 8.8% below original listed price. That large discount is explained by two sales at Taos Ski Valley: two condos at the Bavarian Chalets sold for a combined discount from original price of $765,000 (27%); if those two sales are excluded from the calculation, the discount from original price 3.2%.
Days On Market – In the first six months of the year, DOM averaged 159 in 2023 vs. 84 in 2022, an increase of 75 days (89%).
The number of condos listed for sale at the time of this report was just 28, an increase of 8 from three months ago, but a decrease of 8 from 36 at this time a year ago. Inventory has been slowly increasing from a low of 17 in January, but it is still very inadequate for the buyer demand.
In 2006, when condo development was at its peak, there were often around 200 condos on the market at any given time, with the majority in or near central Taos; there were 149 condo sales that year.
|Current||Year Ago||Sept 2008|
|Up to $150k||0||0||40|
|$150k – $250k||3||2||50|
|$250k – $350k||7||13||51|
|$350k – $500k||10||14||56|
|Up to $150k||10||8||1||0|
|$150k – $250k||21||16||13||3|
|$250k – $350k||18||30||33||4|
|$350k – $500k||22||22||31||7|
There have been no foreclosure sales so far in 2023, the same as in 2022 and 2021.
Through Q2 2023, there have been no multi-family sales, a decrease of 5 for the same time period in 2022.
For the full year 2022, there were only 6 multi-family sales; in 2021 there were 5. Multi-family is and has always been a very small segment of the Taos real estate market. In peak year 2005, there were only 8 sales.
Rents have been trending higher for years, so multi-family income properties could yield fairly attractive returns on investment. However, with interest rates having increased, investor buyers will pay less for a given income stream to achieve a desired rate of return (“capitalization rate“).
Currently, there are 13 multi-family listings, all of which are duplexes or triplexes, except for a 56-unit motel that has been closed for years. It is suitable for conversion to affordable rentals, and it has a sale pending.
2023 first half Land unit sales were 13% fewer than in 2022.
So far this year, 108 tracts have sold compared to 124 for the same time frame in 2022. That’s a decrease of 12.9%. Dollar sales are down 23.6%, from $16.2 million to $12.4 million. Median and average prices are down 10.2% and 12.3%, respectively.
Land sales aren’t down as much as residential sales this year; however, land sales hadn’t increased as much as homes and condos did during the 2020-2022 market surge, so the pullback in this year’s cooler market isn’t as pronounced. The primary constraint on land is very high building costs, and the long lead time to start and complete construction of a home. It costs much more to build than to buy an existing home, and good builders are booked up for at least two years.
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 69% over 2020–although the number of sales was still 27% fewer than peak year 2005. Some home buyers who were frustrated in their search for an existing home due to the low inventory and intense competition decided to buy land and build.
Then In 2022, the sales pace slowed as buyers realized how long it would take to get a home built. Total closed sales for the year were up just 6 units over 2021 (258 vs. 252). Dollar sales were up 15%. Back in peak year 2005, in the boom leading up to the GFC, there were 339 land sales, with a total dollar value of $46 million; 2022’s unit sales were 24% fewer than that peak. Unlike the market single-family homes, the land market is nowhere near back to where it peaked before the GFC.
Median price for the first half this year was $76,800 vs. $85,500 in 2022 for the same time frame, a decrease of $8,700 (-10.2%). Average (mean) price year-to-date is down $16,100 (-12.3%), from $131,000 last year to $114,900 in 2023. 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 380 tracts listed for sale is down 1 from three months ago, but down 122 (-24%) from a year ago.
|Current Month||Same Month last year|
|Up to $50k||70||114|
|$50k – $100k||119||168|
|$100k – $150k||48||58|
|$150k – $200k||49||56|
|$200k – $250k||23||34|
|$250k – $300k||17||10|
For the first half this year, actual sales price averaged 9.6% below the last asking price when the home went under contract; the discount from original asking price was 14.1%. Compared to single-family homes and condos, buyers of land are able to negotiate substantial discounts in many cases.
Days On Market
The average days on the market so far this year is 365, down from the average of the previous ten years of 447. But as you can see, DOM for land has been up and down over the years.
|2013||2014||2015||2016||2017||2018||2019||2020||2021 2022||2023 YTD|
How Land Purchases Were Financed
The commercial market has cooled after a surge in 2022.
There have been only two sales of commercial properties through the first half of 2023, with total dollar sales of $1.7 million. Last year at this point in time, there had been 11 sales with total dollar volume of $10.9 million. In the full year 2022, there were 18 sales with a total dollar volume of $14.5 million. Six of these sales were $1 million or more. Higher interest rates no doubt are affecting the feasibility of some commercial opportunities. Currently, there are 28 active commercial listings, with just one pending sale.
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 over time; however, given higher interest rates and the possibility of a recession this year or in 2024, 2023 may be a quiet year in this sector of the market.