Year-to-Date October 31, 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. Taos experienced something of a buying stampede, with homes selling 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. 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 2022, the market has cooled some. We are not seeing 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 somewhat split, with better homes still selling fast and at full price, and less desirable homes taking longer to sell. Total dollar sales are up, as prices continue to rise, but at a slower rate than what occurred in 2020-2021.

Through ten months, unit sales are 306 this year vs. 294 last year, an increase of 12 sales (4%). Earlier this year, unit sales were actually slightly lagging 2021’s pace. Now, the market is gaining. This is probably due to the fact that the title companies are closing escrows faster than they were, so the number of sales reported closed each month now is greater than the monthly number last year. A new title company opened for business on August 28, and this has definitely speeded up escrows. Additionally, with mortgage interest rates so much higher, the number of persons re-financing is way down; this, too, will reduce the workload at the title companies so escrows for sales contracts can close faster.

Dollar sales year-to-date are up $22.2 million (15%), from $150.1 million last year to $172.3 million this year, as prices continue to rise.

Median and Average Prices

Through ten months of 2022, the median price (midpoint in the range of prices from low to high) is $470,000 vs. $425,000 in 2021, an increase of $45,000 (+10.6%). The average (mean) is $563,200 vs $510,700 last year, a gain of $52,500 (10.3%). 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	$470,000
Average	$306,100	$326,800	$369,500	$373,100	$398,700	$513,800	$563,200

Price Discounting

For the year to October 31, 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 3.6%. 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%	3.6%

Days On Market

The average days on the market so far this year is 117 vs. 139 in 2021, a decrease of 22 days (-16%).  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 edge up 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	117

Inventory

At the time this report was prepared, there were 213 homes listed for sale, down 14 (-6%)from 227 last month, and down 33 (-13%) from a year ago, when there were 246. The low point this year was 194 in April. 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 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%	111	36%
Conventional loan	66	44%	129	52%	200	59%	180	52%	168	55%
FHA loan	8	5%	11	4%	11	3%	14	4%	7	2%
VA loan	1	1%	10	4%	13	4%	11	3%	11	4%
Seller financing	8	5%	7	3%	4	1%	2	1%	8	3%
Other	2	1%	1	1%	6	2%	3	1%	1	0%
Total	150	100%	249	100%	337	100%	349	100%	306	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 77 vs. 64 for the same time period in 2021, a gain of 13 units (20%). Dollar sales are up 47%. 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 surge of 2020-2021.

Median price through the first ten months is $349,000 vs. $316,100 last year, an increase of $32,900 (10.4%).  Average price is also up, at $396,200 vs. $325,400, a gain of $70,800 (21.8%). 

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 1.8% 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%	1.8%

Inventory

The number of condos listed for sale at the time of this report is down to just 23, a decrease of 5 from a month ago, and down 45 (-66%) from 68 listings at this time a year ago. There are only six condos available that are priced under $400,000.

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	40

	2011		2016		2020		2021		2022 YTD
Cash	14	48%	34	51%	43	58%	36	44%	36	47%
Conventional loan	15	52%	32	48%	30	41%	45	55%	41	53%
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%	77	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 ten 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 closed motel. It is suitable for conversion to rentals, and it has a sale pending.

Land sales have slowed from last year’s breakneck 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 217 closed sales, an increase of 3 (1%) from 214 last year for the same time period. Dollar sales are up 19%, at $27.8 million this year vs. $23.3 million last year.

Median price year-to-date is $79,500 vs. $73,300, an increase of $6,200 (9%). Average price is up $19,000 (17%), from $108,900 last year to $127,900 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 457 tracts listed for sale is down from 478 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 12.8%.

Days On Market

The average days on the market so far this year is 467 vs. 369 in 2021, an increase of 98 days (27%).  

How Land Purchases Were Financed

	2022 YTD
Cash	160	74%
Conventional loan	32	15%
Seller financing	24	11%
Other	1	1%
Total	217	100%

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

So far this year, there have been 14 sales with a total dollar volume of $11.8 million. 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 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	14