REAL ESTATE: The Riley Report
Hello From Pagosa Country!
Spring flowers are popping up everywhere. Spring also brings a mixed bag when it comes to weather. Yesterday morning I woke up to about 10 inches of new snow. Most of it will be gone later today. The snowpack in the mountains is currently at 128% of median. The good news is we should have a green summer and less chance of forest fires. The rafting companies should have a good season, which will help our local economy.
The big news this month is the strength of the real estate market. Sales are way up, and inventory is way down. The most noticeable change is in the condo and townhome market. We’ve had three times as many condo sales this year as we did last year at this time. Condo inventory is way down as well — 39% from last year. There are currently only 32 condos on the market, and nine of those are under contract.
If you own a condo or a townhome, this could be a great time to sell.
Home sales are up 24% and inventory is down 27%. Except for homes priced below $200,000, sales are up. The reason sales under $200,000 are down is there is almost nothing available there to buy! Homes with the most sales so far in 2017 are in the $300,000 to $400,000 price range. We’ve had 18 sold in this price range, compared to 13 last year and just 5 back in 2014. Vacant land sales are flat. Overall sales are up 22%.
The second piece of good news for sellers is pending sales are way up as well. Currently we have 154 sales in the hopper, compared with 103 at this time last year.
How about a third piece of good news? Interest rates have come back down somewhat. A 30-year fixed mortgage is at 4.125%, which is down from about 4.375% a few weeks ago. All of these factors mean that prices, especially in the lower range, are going up.
Now for the bad news: along with higher prices, there is a lack of inventory for buyers to choose from. There are a couple of wild-card factors that may bring more inventory into the market. The first is construction of spec homes. These are homes which builders build on “speculation” that a buyer will come along once it is complete. There have been 21 new home construction permits issued so far this year, compared to 11 at this time last year, but it is hard to say how many of those are being built on spec. The second factor is homeowners who have been holding on to their property because they have owed more than their home is worth up until now. These people mostly bought homes between 2005 and early 2008. They may decide to sell now that they can do so without taking a loss. We need both of these sources of new inventory to kick in, or we will see sales start to slow down as we move through the year.
So long for now! It’s a beautiful morning in Pagosa. As I finish this letter, I’m watching the sun rise over the Continental Divide.