2014 Pagosa Real Estate Summary… and Future Forecast
Starting with the bigger picture, things look brighter as we peer into 2015.
From the information coming from the National Association of Homebuilders (NAHB) and National Association of Realtors, (NAR) it sounds like the nation’s real residential real estate economy will improve further during 2015. Both these national trade groups feel the numbers will look better as more first-time homebuyers enter the housing market and better job creation numbers are achieved.
According to the NAHB Chief Economist David Crowe, “Single-family [home] builders are feeling good. They are not overly confident, but confident enough to keep moving forward.”
Crowe goes on to say: “This is mostly due to significant pent-up demand and steady job and economic growth that will allow trade-up buyers who have delayed home purchases due to job insecurity to enter the marketplace.”
Lawrence Yun, Chief Economist for NAR was equally optimistic when he addressed the Annual Convention in New Orleans last month:
“The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years.” Yun was careful to add that the housing market does have some headwinds out ahead, in the form of a likelihood of increasing interest rates the second half of next year, tight credit requirements, and student loan debt. Still, overall the forecast at the national level looks encouraging.
agosa Springs’ market behavior is somewhat different from most urban real estate economies, due to the heavy influence of our second home owners. These Buyers and Sellers are not driven by job relocation in their real estate decisions, more by their confidence in the economy and their jobs or businesses, their discretionary income and savings, the health of the housing market in their home community and their lifestyle preferences. (More about the areas with better economies and housing markets in our next article).
Pagosa Springs has much to offer folks that enjoy snow skiing, snowmobiling, soaking in the Hot Springs, exploring Mesa Verde, rafting down the San Juan River, boating on Navajo Reservoir, hiking in the Weminuche Wilderness, enjoying a day trip to Durango, trail riding, fishing and golfing. Then again, lots of other mountain communities have many wonderful outdoor resources. It is our particular combination of recreational opportunities, our small, friendly and safe mountain town, good values in real estate inventory, that a certain segment of the second home buyers find appealing in Pagosa when compared to other choices in the Rocky Mountain Region.
For the year, closed real estate transactions totaled just under $128 million, as compared to $114 million for 2013. This is an increase of just over 12%. Total single family home closings for the year totaled $84 million, up 5% from 2013. The average home selling price dropped only slightly from $319,000 to $316,000 for 2014.
As we enter 2015, there are plenty of single family homes, condos and townhomes for Buyers to choose from in the MLS listing inventory. Levels remain above the ten-year average with 292 existing homes for sale at year end. This compares with 277 at the end of 2013. As far as the number of new home building permits for 2014… we are back up to the levels we were at in 2008, inching up to 64 from 59 in the prior year. By the way, for Buyers considering putting off a purchase until spring or summer of 2015 — think again. Some of my most successful clients always buy in the winter — fewer competing Buyers, and more motivated Sellers.
With a refreshingly new energy in the local political and municipal leadership and management, a growing collaborative spirit among community groups, including the School Board, Chamber of Commerce, Town Tourism Committee and Economic Development Committee, there is much to be optimistic about in the Pagosa Springs area. A slowly growing enthusiasm and positive attitude is gaining strength within the local business community. Are there a few issues floating about that could create some surprises? Yes, as always, the global economy and political environment could derail a number of things. But, those are risks we all live with. Keep your eyes, ears and minds open as we enter the New Year — good things will be happening!
If you would like to discuss your particular property investments or other matters related to real estate, give me a call at 970-264-7000 or drop me an email at: MikeHeraty@frontier.net.
Note: Information compiled from CREN PSAAR MLS data and may not reflect the entire number of transactions recorded in Archuleta County.