A Look Back at Pagosa’s 2017 Real Estate Market
Overall, 2017 was a strong year for the Pagosa Springs Area real estate economy. There were 878 Closed Sales totaling just under $188 million — as compared to 755 and slightly under $147 million for the same period in the prior year. Key measurements for nearly every category are up as compared to the prior year, including the luxury home market, which has been significantly over-supplied and soft for the last five years. Building permits issued in the county and town are up as well, with 146 New Home Permits through November of this year compared to 111 last year, showing strong building activity and good construction employment levels.
These measurements compliment the increased sales and lodging tax receipts during 2017. (See MLS charts at the bottom of this page.)
The number of single family home sales are up more than 7.3% for the year with an increase in total dollar volume of over 26%. The Median Selling Price of $339,500 compares to $312,000 for 2016.*
Sales of Luxury Homes also recorded very positive numbers, with 29 Closed Sales posting $43,230,750 in Dollar Volume, an increase of 142 in units sold and a 126% increase in Dollar Volume over 2016**. We see this as a strong vote of confidence for upper-end values and a sign that more affluent buyers are liking the direction the economy is taking, with Wall Street delivering strong returns for investment and retirement accounts during 2017.
Our luxury home price points compare very favorably to Durango Area prices and even more “buyer-friendly” when compared to markets along the I-70 Corridor, such as Summit County and the Vail Valley. We are seeing more buying activity coming down from the Front Range due to traffic issues and price pressures in those I-70 Corridor markets.
The number of townhome and condo sales are also up over last year by 9%, with a 12% increase in total dollar sales, while the Median Selling Price remained unchanged at $160,000. The inventory of townhomes and condos listings has decreased as the number of entry level single family homes has declined during 2017. The market saw more first-time home buyers opting to purchase condos and townhomes rather than continuing to rent. As the size of these households grow and income increases, some of these owners will trade their equity up into single family detached homes in the years ahead. This investment creates some forced savings that renting cannot accomplish. Hopefully, the current low interest rate environment will continue during 2018, providing higher levels of affordability to younger and first-time home buyers.
An added bright spot in the market this year is the sales activity in the 35-acre market. Closed Sales are up 100% versus 2016 with 24 tracts sold while the median selling price ($183,500) is up by 36% over 2016. Total Dollar Volume in this category was just over $5,000,000 as compared to $2,000,000 for last year. Historically, many of these buyers will contract for the construction of larger homes within 2-5 years of their purchase which helps to keep our custom homebuilders busy.
What will the Year 2018 look like? Will prices continue to climb? We interest rates remain low? How many new homes will come on the market? Will it still be a good time to sell? Watch for our 2018 Real Estate Forecast right after the holidays!
As always, I’m available to answer your real estate questions and to provide details on any part of the market that is of interest. You may reach me at MikeHeraty@frontier.net or by phone at (970) 264-7000.
* Single family detached stick-built homes. Does not include townhomes, condos and manufactured homes.
**Homes selling at $800,000 or more.