Red River, New Mexico, Real Estate Trends
The Red River New Mexico real estate market experienced significant shifts in 2024, marked by decreased sales volume and notable price adjustments, The market saw several key trends that could continue to shape property values and buyer behavior in 2025.
2024 Market Performance
Sales volume in Red River's single-family home market declined in 2024, with only 19 homes sold compared to 28 in 2023 and 33 in 2022. A distinctive feature of the 2024 market was the frequency of price reductions, as sellers adjusted their initial listing prices—sometimes significantly—to attract buyers.
Market Influencing Factors
Several factors contributed to the market's performance in 2024:
National economic conditions continued to impact buyer confidence, with potential vacation home purchasers showing more hesitancy in the market.
Higher interest rates throughout much of the year affected buyer purchasing power.
The introduction of Taos County's short-term rental ordinance in the fourth quarter negatively impacted the market, particularly for properties outside municipal boundaries.
Short-Term Rental Impact
The new county ordinance has created a notable divide in the market between properties within and outside the town limits. The regulation requires permits for vacation rentals, with the number of permits being limited to fewer than the current number of vacation rentals in operation. Additionally, these permits don't transfer with property sales, creating uncertainty for buyers interested in vacation rental income.
This is particularly significant given that an estimated 80-90% of potential buyers who come into my office express interest in short-term rental opportunities to offset costs or generate income. While properties within the town of Red River remain unaffected by these regulations, homes in areas such as Upper Red River Valley, Bitter Creek, and Bobcat Pass are affected.
Property Valuations
Despite price adjustments throughout the year, underlying property values remained relatively stable. The price reductions observed were primarily corrections to initial overpricing rather than declining market values. Current market metrics show:
Smaller homes commanding up to $460 per square foot
Larger homes over 3,000 square feet averaging $205 per square foot
2025 Market Outlook
Looking ahead to 2025, several factors are expected to influence the market:
Improving economic conditions and lower interest rates could boost overall market activity
The short-term rental ordinance's impact is expected to continue to create differences in demand for those properties inside compared with those outside the municipal boundaries if the ordinance remains intact and is enforced, this could cause:
Properties outside municipal boundaries may face downward price pressure
Properties within town limits could see increased demand and upward price pressure
The full impact of these factors will become clearer as the market adjusts to the new regulatory environment throughout 2025.
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Rob Swan, Qualifying Broker, Swan Realty, 575-613-4243
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