Year-to-Date July 31, 2022

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:

Price	2016	2017	2018	2019	2020	2021	2022 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

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:

2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
18.4%	16.9%	13.9%	13.3%	9.4%	10.3%	7.8%	7.2%	4.5%	3.8%

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.

2006	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
247	244	235	235	226	192	147	151	156	141	128

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.

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

	2011		2016		2020		2021		2022 YTD
Cash	65	43%	91	36%	103	31%	139	40%	61	32%
Conventional loan	66	44%	129	52%	200	59%	180	52%	112	59%
FHA loan	8	5%	11	4%	11	3%	14	4%	5	3%
VA loan	1	1%	10	4%	13	4%	11	3%	7	4%
Seller financing	8	5%	7	3%	4	1%	2	1%	4	2%
Other	2	1%	1	1%	6	2%	3	1%	1	1%
Total	150	100%	249	100%	337	100%	349	100%	190	100%

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.

2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
12.7%	8.6%	11.8%	6.7%	6.5%	5.5%	3.2%	3.3%	0.8%

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.

2013	2014	2015	2016	2017	2018	2019	2020	2021	2022YTD
107	81	78	65	58	59	56	49	48	44

How Condos Were Purchased	2011		2016		2020		2021		2022 YTD
Cash	14	48%	34	51%	43	58%	36	44%	24	44%
Conventional loan	15	52%	32	48%	30	41%	45	55%	30	56%
Seller financing	0	0%	1	1%	1	1%	0	0%	0	0%
Other	0	0%	0	0%	0	0%	1	1%	0	0%
Total	29	100%	67	100%	74	100%	82	100%	54	100%

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.

Price	2016	2017	2018	2019	2020	2021	2022 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

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.

2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
n/a	17.0%	18.4%	22.4%	20.0%	18.3%	15.9%	14.5%	12.2%	12.4%

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%).  

2006	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
374	465	390	605	464	472	368	332	471	356	458

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.

2011	2012	2013	2014	2015	2016	2017	2018	2019	2020 2021 2022 YTD
2	7	9	3	17	7	5	14	12	8 6 12