Taos Real Estate Market Report
January – December 2023 (12 months)
The market cooled in 2023 after 2020-2022’s torrid pace.
2023 turned out to be a year of retrenching. Compared to 2022, sales were down markedly, with the number of sales and the dollar volume down in all categories of property. In all but a few cases, sales were below last year’s in every month. For the total market (all categories of property), the number of sales was down 28%; dollar sales were down 31%. Single-Family Homes unit sales declined 29%, and dollar sales dropped 31%. Condo unit sales ended the year off 37%, with dollar sales down 25%. Land unit sales fell 20%, with dollar volume down 21%. There were just 3 Multi-family sales vs. 6 last year. Commercial sales fell from 18 closed sales in 2022 to 6 in 2023.
Some slowdown was inevitable after two years of explosive activity. The pandemic-fueled stampede of buyers looking to get out of densely-populated communities to “work from home” in more rural areas where they could have more space lost steam as the Covid health fears abated. Additionally, the surge in demand while the inventory of homes and condos listed for sale fell to all-time lows, caused prices to rise sharply. Finally, the spike in interest rates made the purchase of real estate unattractive and/or unaffordable for many buyers.
The prognosis for 2024 is unclear. Although interest rates have come down some and financial markets are expecting rate cuts by the Federal Reserve soon, volatility in the mortgage market is likely. And although many pundits are predicting that the economy will actually have a “soft landing” in which inflation comes down without a recession, there is concern that debt burdens and reductions in consumer spending will in fact cause a slowdown. Add to that a lot of angst about geopolitics, war(s) and ugly divisive politics, and you have the ingredients for another year of weakness in real estate.
However– The inventory shortage of homes and condos that has plagued the market will continue; therefore, with more demand than supply, prices should remain relatively buoyant. We believe that the long-term trend for Taos remains upward as this community will continue to draw people for whom the local climate, natural beauty, lifestyle and culture are attractive. Whether 2024 will see a resurgent market or a continuation of the lull experienced in 2023, is anybody’s guess. As they say here in northern New Mexico, “Quien sabe?”
Click each title below to view the discussion and data for that property type.
For the full year through December, unit sales were 264 this year vs. 371 last year, a decrease of 107 sales (-28.8%). Dollar sales for the year were down 30.6%, from $207.4 million in 2022 to $143.9 million in 2023. Some of the fall-off can be attributed to a change in buyer psychology. During the buying stampede, an influx of buyers competed for limited inventory, with many cases of bidding wars and homes selling well above asking price. Prices rose 20% – 25% per year. That has changed. Buyers are fewer, and they are not as impulsive. The market sentiment has reverted to more normal behavior.
Median and Average Prices
For the year, the median price (midpoint in the range of prices from low to high) was $475,000 this year vs. $469,000 in 2022, a negligible gain of 1.3%. The average (mean) was $545,000 vs. $558,900 last year, a decrease of $13,900 (-2.5%). After rapid increases during the 2020-2022 surge, prices have stopped rising. This is probably a temporary lull in the long-term trend of a steadily rising price level. Here is how median and average prices have changed since 2016:
| Price | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Median | $283,500 | $300,000 | $310,500 | $322,500 | $343,500 | $425,000 | $469,000 | $475,000 |
| Average | $306,100 | $326,800 | $369,500 | $373,100 | $398,700 | $513,800 | $558,900 | $545,000 |
Since the pre-pandemic year of 2019, the median price has jumped 47%; the average has gained 46%. In addition to the overall price level rising, there has been an increase in sales of higher-priced homes. Just looking at the $1 million+ segment, the number of sales increased from 4 in 2019 to 34 in 2022. The number fell off to 21 in 2023. The chart below showing sales by price segment illustrates the increases in sales of homes in the higher range.
Price Discounting
For the full year 2023, actual sales price averaged 4.5% below the last asking price when the home went under contract; the discount from original asking price was 8.4%. Some sellers listed homes as if the market were as hot as it was during the big surge of 2020-2022. That hasn’t been working very well, and we are seeing more asking price reductions than we saw in 2021-2022, when sellers got full asking price—or more—much of the time.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 18.4% | 16.9% | 13.9% | 13.3% | 9.4% | 10.3% | 7.8% | 7.2% | 4.5% | 3.8% | 8.4% |
Days On Market
For full-year year 2023 , the average days on market was 117, a slight increase from 111in 2022. Due to the very limited inventory of homes available for purchase, average DOM has dropped dramatically from what used to be the norm in Taos: up until 2016, 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.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 244 | 235 | 235 | 226 | 192 | 147 | 151 | 156 | 141 | 112 | 117 |
INVENTORY
| Jan 2024 | Jan 2023 | Sep 2008 | |
| Up to $200k | 3 | 10 | 190 |
| $200k – $300k | 9 | 13 | 109 |
| $300k – $400k | 19 | 28 | 69 |
| $400k – $500k | 19 | 30 | 39 |
| $500k – $650k | 27 | 31 | 35 |
| $650k – $800k | 17 | 21 | 27 |
| $800k – $1mil | 18 | 21 | 36 |
| Over $1mil | 37 | 25 | 13 |
| TOTAL | 149 | 179 | 518 |
UNIT SALES
| 2019 | 2020 | 2021 | 2022 | 2023 | |
| $0 – $200k | 58 | 62 | 44 | 26 | 16 |
| $200k – $300k | 64 | 70 | 49 | 47 | 21 |
| $300k – $400k | 74 | 83 | 64 | 72 | 45 |
| $400k – $500k | 27 | 45 | 55 | 62 | 49 |
| $500k – $650k | 24 | 42 | 53 | 66 | 37 |
| $650k – $800k | 16 | 15 | 34 | 43 | 26 |
| $800k – $1mil | 4 | 15 | 22 | 22 | 14 |
| Over $1mil | 4 | 6 | 29 | 33 | 15 |
| TOTAL | 271 | 338 | 350 | 371 | 223 |
Inventory
At the time this report was prepared, there were 149 homes listed for sale, down 7 (-4%) from two months ago when there were 156 listings, and down 30 (-17%) from a year ago, when there were 179 homes for sale. The low point in 2022 was 159 in April; the high point was 187 in July which was not even a third of the number of available homes in September 2008, when 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 150 – 190 listings on the market throughout the year, it is difficult to find more than a few homes to show a buyer that might meet most of his/her criteria.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 334 | 333 | 324 | 316 | 285 | 264 | 274 | 257 | 225 | 217 | 168 |
There are no indications that inventory will increase substantially any time in the near future. Although there is some “spec” building going on, it’s nowhere near enough to satisfy the demand. Additionally, many current home owners are reluctant to list because they don’t want to give up ultra-low interest rates on their home loans. Therefore, the inventory will remain inadequate relative to demand. This should keep prices from falling much if at all.
Home Purchase Financing
| 2011 | 2020 | 2021 | 2022 | 2023 | ||||||
| Cash | 65 | 43% | 103 | 31% | 139 | 40% | 132 | 36% | 127 | 48% |
| Conventional loan | 66 | 44% | 200 | 59% | 180 | 52% | 208 | 56% | 112 | 42% |
| FHA loan | 8 | 5% | 11 | 3% | 14 | 4% | 7 | 2% | 8 | 3% |
| VA loan | 1 | 1% | 13 | 4% | 11 | 3% | 13 | 4% | 6 | 2% |
| Seller financing | 8 | 5% | 4 | 1% | 2 | 1% | 8 | 2% | 9 | 3% |
| Other | 2 | 1% | 6 | 2% | 3 | 1% | 1 | 0% | 2 | 1% |
| Total | 150 | 100% | 337 | 100% | 349 | 100% | 369 | 100% | 264 | 100% |
Interest Rates
As soon as the Federal Reserve started its anti-inflation program of raising short-term interest rates in 2022, the rates on home loans increased dramatically. The 30-year fixed rate loan rose steadily from around 3% in late 2021 to a peak of 7.76% in November 2023. Since then, rates have trended downward. The current average rate is 6.6%. There has been a lot of volatility in the market for US Treasury notes and bonds, which directly affects mortgage rates. Recent mostly-favorable data on US inflation suggest that the Federal Reserve may start lowering short-term rates this quarter. Although mortgage rates are almost certainly never going to get back to the low levels of 2020-2021, if they come down to 6%, that should bring some buyers back into the market; it might also entice some owners who have been reluctant to give up their very low loan rate to list and sell their home.
| Conventional 30-year fixed | 6.60% |
| Conventional 15-year fixed | 5.76% |
Note: Interest rates are impacted by occupancy, credit score, and down payment.
Foreclosure Sales
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 44 | 55 | 50 | 49 | 34 | 34 | 29 | 25 | 17 | 9 | 5 | 0 | 4 |
| 29% | 28% | 21% | 22% | 13% | 14% | 10% | 9% | 6% | 3% | 1% | 0% | 1% |
There were 4 foreclosure sales in the full year 2023. For the full year 2022, there were none. The number of foreclosures has diminished steadily since the 2012 peak during the aftermath of the Great Financial Crisis of 2008-2009. Currently, there are just three bank-owned houses listed for sale, including one at $3.3 million.
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.
Condo sales in 2023 were down sharply compared to 2022: only 58 units sold vs. 92 in 2022, a drop of 34 condos (-37.0%). Dollar sales were down 24.9%, from $36.6 million to $27.5 million. The inventory of condos listed for sale is extremely limited, so this has been a limiting factor on the number of sales. As is the case with homes, there are no signs that inventory will increase significantly any time soon. While unit sales were down, median and average prices were up substantially.
Median price for the year was $410,600 vs. $350,000 in 2022, an increase of $60,600 (+17.3%). Average price was also up, at $474,100 vs. $398,200, a gain of $75,900 (+19.1%). With such a disparity in the number of sales this year vs. last year, it is difficult to analyze the reasons for the large gains in median and average price. The composition of the sales mix of 1-, 2- and 3-bedroom units was roughly the same, i.e., there was not a big change this year to sales of larger units which naturally would be higher-priced. There was a modest increase in the proportion of condos sold at Taos Ski Valley, where condos generally are much higher-priced than those in Taos. The gains appear to be mainly due to the price level rising to reflect supply and demand.
Price Discounting
For the year, final sales price has averaged 3.2% less than the last asking price when the condo went under contract, and 6.6% below original listed price. These discounts are less than those for single-family homes; this reflects an even tighter inventory for condos than for homes.
| 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 12.7% | 8.6% | 11.8% | 6.7% | 6.5% | 5.5% | 3.2% | 3.3% | 2.1% | 6.6% |
Days On Market – For the year, DOM averaged 109 in 2023 vs. 122 in 2022, a decrease of 13 days (-10.7%).
Inventory
The number of condos listed for sale at the time of this report was only 26, a slight increase from 24 two months ago, and an from 17 at this time a year ago. Of the 26 units currently listed for sale, 7 are located at Taos Ski Valley, 19 are in Taos and nearby. The Taos and nearby units range from a 525-square foot studio unit priced at $195,000 to a 2,079-sq. ft. 4BR/3BA unit at $824,900.
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 condos sold that year.
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 107 | 81 | 78 | 65 | 58 | 59 | 56 | 49 | 48 | 39 | 23 |
INVENTORY
| Current | Year Ago | Sept 2008 | |
| Up to $150k | 0 | 0 | 40 |
| $150k – $250k | 1 | 0 | 50 |
| $250k – $350k | 8 | 1 | 51 |
| $350k – $500k | 6 | 9 | 56 |
| Over $500k | 11 | 7 | 29 |
| TOTAL | 26 | 17 | 226 |
UNIT SALES
| 2020 | 2021 | 2022 | 2023 | |
| Up to $150k | 10 | 8 | 1 | 0 |
| $150k – $250k | 21 | 16 | 13 | 8 |
| $250k – $350k | 18 | 30 | 33 | 14 |
| $350k – $500k | 22 | 22 | 31 | 15 |
| Over $500k | 3 | 6 | 14 | 21 |
| TOTAL | 74 | 82 | 92 | 58 |
| 2016 | 2020 | 2021 | 2022 | 2023 | ||||||
| Cash | 34 | 51% | 43 | 58% | 36 | 44% | 45 | 49% | 38 | 66% |
| Conventional loan | 32 | 48% | 30 | 41% | 45 | 55% | 47 | 51% | 20 | 34% |
| Seller financing | 1 | 1% | 1 | 1% | 0 | 0% | 0 | 0% | 0 | 0% |
| Other | 0 | 0% | 0 | 0% | 1 | 1% | 0 | 0% | 0 | 0% |
| Total | 67 | 100% | 74 | 100% | 82 | 100% | 92 | 100% | 58 | 100% |
Foreclosure Sales
There were no foreclosure sales in 2023, the same as in 2022 and 2021.
For the full year 2023, there were only 3 multi-family sales, a decrease of 3 from 2022.
Multi-family is and has always been a very small segment of the Taos real estate market. Even the real estate boom of 2020-2022 failed to ignite this market. For the full year 2022, there were only 6 multi-family sales; in 2021 there were 5. In peak year 2005, when the market was strong before the Great Financial Crisis, there were only 8 sales.
Sales this year include the old Sun God Lodge, a 56-unit motel on the main commercial road through the south side of Taos. It sold for $1,265,000. It is supposed to be converted to affordable rental housing.
Rents have been trending higher for years, due to an acute lack of inventory of long-term rental properties. But even in the years of ultra-low interest rates, when multi-family income properties should have been able to yield attractive returns on investment, the market was weak. Now, with interest rates at much higher levels–and with rent increases softening—rental property investments may not “pencil out” as easily. Investor buyers will apply higher capitalization rates to a property’s Net Operating Income (NOI), i.e., they will pay less to achieve a desired rate of return on a given income stream.
Currently, there are 16 multi-family listings, including three apartment buildings (6-, 9-, and 20-unit properties). Those three apartments are under contract, along with a duplex and a triplex, for a total of 5 pending sales. So there is some action in this market segment!
The Land market remains in the doldrums. 2023 sales were down about 20% compared to 2022.
In the full year 2023, 207 tracts sold compared to 258 in 2022, a decrease of 51 units (-19.8%). Dollar sales were down 21.3%, from $31.6 million to $24.9 million. Median and average prices are down 4.8% and 1.9%, respectively.
The primary constraints on land sales are very high building costs and the long lead time to start and complete construction of a home. Good builders are quoting $400+ per square foot for the hard dollars of construction; this would not include the land purchase, possible well drilling, septic system installation, landscaping. It generally costs much more to build a new home than to buy an existing home. However, despite this good builders are booked up for at least two years.
Land sales really took off in 2021 after languishing 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 and what it would cost to get a home built. Total closed sales for the year were up just 6 units over 2021 (258 vs. 252). In 2023, land sales decreased, along with all the other segments of the real estate market. 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.
Median price for the year 2023 was $72,000 vs. $75,600 in 2022, a decrease of $3,600 (-4.8%). Average (mean) price was down $2,300 (-1.9%), from $122,500 to $120,200. Whereas in the market for homes and condos there is much more demand than supply, in the land market the reverse is true. Land buyers have a lot of listings to choose from.
Current inventory of 353 tracts listed for sale is down 27 from two months ago, and down 44 from a year ago.
INVENTORY
| Current Month | Same Month last year | |
| Up to $50k | 39 | 80 |
| $50k – $100k | 116 | 127 |
| $100k – $150k | 51 | 57 |
| $150k – $200k | 49 | 45 |
| $200k – $250k | 19 | 24 |
| $250k – $300k | 16 | 13 |
| Over $300k | 63 | 51 |
| TOTAL | 353 | 397 |
UNIT SALES
| 2017 | 2020 | 2021 | 2022 | 2023 |
| 46 | 53 | 86 | 71 | 51 |
| 34 | 57 | 84 | 97 | 85 |
| 16 | 17 | 26 | 31 | 24 |
| 15 | 16 | 23 | 18 | 14 |
| 3 | 4 | 14 | 12 | 8 |
| 2 | 0 | 7 | 6 | 12 |
| 2 | 4 | 12 | 23 | 13 |
| 118 | 147 | 252 | 258 | 207 |
Price Discounting
For the entire twelve months of 2023, actual sales price averaged 8.8% below the last asking price when the land went under contract; the discount from original asking price was 12.9%. Compared to single-family homes and condos, buyers of land are able to negotiate more substantial discounts in many cases.
Days On Market
The average days on the market for 2023 was 427, down from slightly 437 in 2022, and also slightly 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 |
| 465 | 390 | 605 | 464 | 472 | 388 | 332 | 471 | 351 | 437 | 427 |
How Land Purchases Were Financed
| 2022 | 2022 | 2023 | 2023 | |
| # of sales | % of total | # of sales | % of total | |
| Cash | 188 | 75% | 165 | 80% |
| Conventional loan | 35 | 14% | 24 | 12% |
| Seller financing | 28 | 11% | 18 | 8% |
| Other | 1 | 0% | 0 | 0% |
| Total | 252 | 100% | 207 | 100% |
The commercial market fell off a cliff in 2023.
In 2023, there were just 6 sales of commercial properties compared to 18 in 2022, a drop of 12 sales (66/7%). Total dollar sales were down 82.3%, from $14.5 million to $2.6 million. Six of 2022’s sales were $1 million or more. Higher interest rates no doubt are affecting the feasibility of some commercial opportunities. Currently, there are 30 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 for commercial real estate — should increase over time. However, given higher interest rates and the possibility that there might yet be a recession, 2024 may be another quiet year in this sector of the market. As the chart below indicates, since 2011 there have only been a few years with more than ten commercial sales.
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| 2 | 7 | 9 | 3 | 17 | 7 | 5 | 14 | 12 | 8 | 6 | 18 | 6 |
