Pagosa’s Summer Real Estate Results, a Mixed Bag
It has been an interesting summer for the real estate world in Pagosa Springs. Overall sales activity is up slightly as measured against the prior 12 months. 2016 is a bit ahead of 2015 for the total number of properties sold, with the total dollar volume of closed sales up nearly 5% above the prior year. For all property types (building lots, acreage, commercial, ranch, single family, condos, etc.) the average selling price was down 2.5% over the prior year.
These numbers summarize the broad performance of all components of real estate sales within Archuleta County.
Homes sales activity is the measure that typically attracts the most attention. For my analysis, I track the sales activity of single family detached homes as a market benchmark. This excludes condos, townhomes, duplexes, modular and manufactured homes. (I look at condos, townhomes, duplexes, manufactured homes separately.)
The number of homes sold is up over 10%. There have been 151 homes sold so far this year versus 137 for the same period in 2015. Total closed sales dollar volume is up 10% above 2015 at $50,235,841. The average selling price of $332,687 is nearly unchanged from 2015 while the Median Selling Price of $297,500 is up 6.4% above last year. 75 of the sold homes were under $300,000.
For most of you who follow the local market, these figures are probably not surprising, but they should not be considered the only important indicators of what is happening within the local housing market. True, there are more spec homes under construction and most are selling quickly, but, there is a narrow price band of robust market activity that may distort the reality of the market as a whole.
When you cross into the $500,000+ price ranges the level of supply significantly outpaces demand as shown below. What are the factors that are impacting this imbalance?
First, there have been changes in the buying preferences of both primary and second home buyers over the last several years. More buyers are choosing smaller homes and lowering their financial investment for vacation and primary residences. We also see this change from the next wave of housing consumers. Unlike many Baby Boomers that are now aging out of the housing market, younger buyers in second home markets are not choosing the larger, more expensive homes their parents chose. This is a change we are seeing across many of the second home and resort markets across the country.
Second, the market in Southwest Colorado has been impacted energy prices. Pagosa Springs has always benefitted from our visitors and second home buyers from Texas and other nearby energy states. An increasing number of households with a significant portion of wealth and income tied to oil and gas are choosing to postpone plans for a second home or cabin in the mountains of southwest Colorado. When oil recovers they will return, but until then we can expect to carry a higher level of unsold home inventory, especially in the upper middle and high-end of the price ranges.
Third, I suggest there are some buyers that are holding off their purchase plans until the outcome of the November elections are known. This is a hard factor to quantify, but I can attest to the fact that a fair number of upper-end Buyers I have communicated with this summer have decided to wait until next year so that they can first assess the impact of the elections on their tax burden and discretionary income. How much change we will see after November is anyone’s guess.
For specifics on a particular price range or real estate category, email me at MikeHeraty@frontier.net or give me a call at my office at 970 264-7000.
Average Annual Number Homes Sold (based on last 5 Years): 271
$200,000-$300,000: 67 Active Listings = 10 month supply
$300,000-$500,000: 90 Active Listings = 16 month supply
$500,000-$750,000: 53 Active Listings = 29 month supply
$750,000-$1,000,000: 35 Active Listings = 76 month supply
$1,000,000 plus: 49 Active Listings = 106 month supply