Year-to-Date November 30, 2022

2020 – 2021 saw a spurt in buying in the aftermath of the Covid pandemic. All over the country, there was a rush to work from home, with many persons looking to get out of crowded urban areas and into homes with more space. Additionally, historically low interest rates (3% and lower) further stoked home-buying. Like many other markets, Taos experienced something of a buying stampede, with homes selling much faster than had been typical for our market–sometimes in a day or two.  There were numerous cases of multiple offers, “bidding wars”, and homes selling well above asking price. 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. 

In the first half of 2022, the market remained hot; but in the latter half of the year, the market started to cool. We are not seeing as many cases of multiple offers written as soon as a new listing comes on the market; bidding wars have subsided some. The market has become sort of split, with better homes in preferred neighborhoods still selling relatively fast and at full price, whereas less desirable homes are getting fewer showings, and are taking longer to sell. Total dollar sales are up, as prices continued to rise earlier in the year; however, prices now seem to be leveling off.

Through eleven months, unit sales are 347 this year vs. 321 last year, an increase of 26 sales (8.1%). Earlier this year, sales were only slightly above 2021’s pace; in the last few months, the gain in sales has accelerated. This is probably due to the fact that our title companies are closing escrows faster than they were last year. A new title company opened for business on August 28, and this has definitely speeded up escrows. Last year it was taking 4-5 months to close sales. Now the number of sales contracts languishing in escrow has diminished significantly: currently there are 26 pending sales, whereas earlier this year the number was in the 70’s. Additionally, with mortgage interest rates so much higher than they were a year ago, the number of persons re-financing is way down, which also reduces the workload at the title companies. Title insurance commitments are coming out much faster than they were!

Dollar sales year-to-date are up $30.0 million (+18.4%), from $163.0 million last year to $193.0 million this year. The first half of the year saw big increases in prices; going forward, the percentage gains in dollar sales may be more in line with the increases in unit sales.

Median and Average Prices

Through eleven months of  2022, the median price (midpoint in the range of prices from low to high) is $465,000 vs. $425,000 in 2021, an increase of $40,000 (+9.4%). The average (mean) is $556,100 vs $507,700 last year, a gain of $48,400 (+9.5%). 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	$310,500	$322,500	$343,500	$425,000	$465,000
Average	$306,100	$326,800	$369,500	$373,100	$398,700	$513,800	$556,100

Price Discounting

For the year to November 30, 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:

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%	3.7%

Days On Market

The average days on the market so far this year is 113 vs. 140 in 2021, a decrease of 27 days (-19%).  Days on market averaged 250 during 2003 – 2016; since 2016, there has been a steady decrease, as the inventory of homes decreased but buyer demand increased. We may see this number start to climb some as the market cools.

2006	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022 YTD
247	244	235	235	226	192	147	151	156	141	113

Inventory

At the time this report was prepared, there were 196 homes listed for sale, down 17 (-8%) from 213 last month, and down 47 (-19%) from a year ago, when there were 243. The low point this year was 194 in April. The high point was 254 in August. In September 2008, there were 518 homes listed for sale. The average inventory decreased every year from 2013 to 2018; it went up in 2019, but decreased again in 2020 and 2021, and it is decreasing again this year. 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.

With demand still strong — and with no significant increase in the building of new homes or the listing of existing homes expected — the inventory will remain inadequate relative to demand for the foreseeable future. This should keep prices fairly buoyant.

Home Purchase Financing

	2011		2016		2020		2021		2022 YTD
Cash	65	43%	91	36%	103	31%	139	40%	126	36%
Conventional loan	66	44%	129	52%	200	59%	180	52%	192	55%
FHA loan	8	5%	11	4%	11	3%	14	4%	7	2%
VA loan	1	1%	10	4%	13	4%	11	3%	13	4%
Seller financing	8	5%	7	3%	4	1%	2	1%	8	2%
Other	2	1%	1	1%	6	2%	3	1%	1	1%
Total	150	100%	249	100%	337	100%	349	100%	347	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 91 vs. 73 for the same time period in 2021, a gain of 18 units (25%). Dollar sales are up 52%. This is despite the fact that the condo inventory is even more limited 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; but, as with homes, the rate of price increase will be slower than during the post-pandemic surge.

Median price through the first eleven months is $350,000 vs. $315,000 last year, an increase of $35,000 (11.1%).  Average price is also up, at $394,300 vs. $323,400, a gain of $70,900 (21.9%). 

Price Discounting

Year-to-date final sales price has averaged 2.0% less than the last asking price when the condo went under contract; sales have averaged 1.9% 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%	1.9%

Days On Market through 11 months is 122 vs. 161 for the same time frame in 2021, a decrease of 39 days (-24%)

Inventory

The number of condos listed for sale at the time of this report is down to just 20, a decrease of 3 from a month ago, and down 44 (-69%) from 64 listings at this time a year ago. There are only five condos available that are priced under $400,000; there are seven between $400-$500K.

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	39

	2011		2016		2020		2021		2022 YTD
Cash	14	48%	34	51%	43	58%	36	44%	44	48%
Conventional loan	15	52%	32	48%	30	41%	45	55%	47	52%
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%	91	100%

Foreclosure Sales

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

There have been 6 multi-family sales through the first eleven months of 2022, one fewer than in 2021 for the same time period. 

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 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. One of these is a motel that has been closed for years. It is suitable for conversion to rentals, and it has a sale pending.

Land sales have slowed from last year’s rapid pace.

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 were frustrated in their search for an existing home given the low inventory and intense competition, so they decided to buy land and build. 

So far in 2022, there have been 235 closed sales, a decrease of 1 (0.4%) from 236 last year for the same time period. Dollar sales are up 15.9%, at $29.7 million this year vs. $25.6 million last year, an increase of $4.1 million.

Median price year-to-date is $78,600 vs. $70,800, an increase of $7,800 (11.0%). Average price is up $17,800 (16.4%), from $108,500 last year to $126,300 this year. Given that the supply of homes and condos listed for sale is not expected to increase much, interest in land should continue to grow, especially if 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 415 tracts listed for sale is down 350 (7%) from 445 a year ago.

Price Discounting

For the year to date, actual sales price has averaged 8.3% below the last asking price when the home went under contract; the discount from original asking price is 11.7%.

Days On Market

The average days on the market so far this year is 453 vs. 358 in 2021 for the same time frame, an increase of 95 days (27%).  

How Land Purchases Were Financed

	2022 YTD
Cash	173	74%
Conventional loan	34	14%
Seller financing	27	11%
Other	1	1%
Total	235	100%

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

So far this year, there have been 17 sales with a total dollar volume of $14.5 million. Six of these sales were $1 million or more: The Hacienda del Sol B&B sold for $2.9 million; the old San Geronimo Lodge changed hands again at a price of $2.4 million; a retail complex near the Plaza sold for $1,035,000; the old El Taoseno Restaurant sold for $1.6 million and has been converted to the new Taos Lifestyle store; a self-storage business sold for $1.25 million; and the Yucca Plaza retail complex just north of Taos Plaza sold for $1 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 demand for retail space for cannabis dispensaries; probably five of this year’s sales were for this. 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	17