Buy land. They aren’t making any more of it!
— Mark Twain
I previously shared my experience with wanting to build a residence in Archuleta County, and how regulations inflated construction costs beyond what we were willing to spend.
So I wasn’t surprised to learn about how regulations impacted the per unit cost of the Rose Mountain Townhomes that are intended to provide affordable housing in Pagosa. Editor Bill Hudson has done a good job of exposing the affordable housing issue. But one aspect he has not addressed is the cost of residential land.
Our Archuleta property is on a hill top, with 360 degree views, on a dead-end cul-de-sac of a county maintained road in Aspen Springs. The topography is ideal for a home site. We bought it during our first visit to Pagosa in 2000. It was a distress sale by an owner whose business was having cashflow problems. We liked Pagosa, and it was too good a deal to pass up.
Nearly monthly for the past couple of years we have received unsolicited offers to buy our property. It’s obvious our names are taken from the Archuleta tax collector’s list, because the solicitation letters are addressed the same unique way as our tax bills. Two things stand out about the offers.
First, the offers are for only fractions of our original purchase cost – even at the distress price we paid. Second, the offers are all from non-Colorado buyers (California mostly), usually self-identifying as a “property investment company”.
Out of curiosity I sometimes call them and say we would be interested in selling – if they would add “a couple of zeros” to their offer. The conversation always ends there. They don’t even attempt to negotiate. We’re not sure of the current market value of our property, but we recently got a clue.
On the same day we received the latest offer to sell, we coincidentally received an advertisement to buy property, less than a mile from ours, from a different company with a California return address (‘Colorado Mountain Property – live your retirement dream!’) The property for sale was about the same acreage as ours. I located it on Google Earth.
From the GE image I recognized where it was, and that we had driven past it on occasion. It is not hilltop, and has nothing like the views we have. The asking price was over ten times the offer we had received that same day for our property! With that potential profit I’m not surprised we are getting so many offers.
The “pitch” accompanying the offers to buy are similar each time. The buyer is happy to unburden us of the annual property taxes. They promise “full cash payment within 30 days”, to pay all costs and unpaid taxes – and it can be handled by mail! All we have to do is “sign and return the attached bona fide offer to buy.”
I imagine that pitch works on some owners who (like us) realize the cost of building a home in Archuleta is unreasonable. But it doesn’t work on us.
We consider the taxes just the cost of enjoying our view — or at least enjoying it before the Chinese infected the country with this damn virus, and made travel to there from Florida a hit-and-miss proposition. And we certainly aren’t going to sell it for a ‘highway robbery’ low-ball offer – especially NOT to Californians!
Not only are Archuleta housing prices already out of hand, there are out-of-state speculators inflating land prices as well. So I don’t see much prospect for future affordable housing unless the County and Town acquire a lot more land dedicated to low-cost housing.
Years ago I read an article about how the billionaires are pricing the millionaires out of Aspen. A recent article in the National Review talked about it as well.
That’s happening here in Pagosa. It’s not just the ‘working class’ who are priced out of the Pagosa/Archuleta housing market, it’s becoming so for professionals as well.
At one point I considered, after retirement, opening a law office in Pagosa — a part-time practice limited to defending persons charged with misdemeanors (ie: first time DUI). The economics of doing so thwarted that idea. My potential income would cover the costs of my practice, but not enhance our ability to afford Archuleta County housing – and I have no intention of going back to work full time.
But even working full time as a lawyer, added to my retirement and our investment income, it would be difficult for us to find a place to live that we consider “affordable” (and we live modestly)… if we could find anything at all.
The average annual salary for a full-time working attorney in Colorado is around $100,000. That’s the average, meaning the big cities are included in calculating that figure.
An attorney in private practice needs to gross nearly twice that to net $100,000. I don’t know any of the attorneys in Pagosa, but as fine lawyers as they may be, I’d be surprised if they are netting $100,000 annually from just their law practices. So with even cheap Pagosa housing being $300,000, you aren’t far from pricing attorneys out of the market.
Bill Hudson’s column listed some jobs available in Archuleta, including for nurses. My wife is a retired RN. The average salary for an RN in Colorado is around $70,000.
So the combined average salary of me and my wife, working full time at our professions in Colorado, is around $170,000. Since that is the average we can assume rural areas such as Pagosa are lower.
According to a mortgage broker acquaintance, to qualify for a mortgage to buy a $300k home (assuming at least 20% – $60k – down), requires an annual income of $106,000. For me, working as an attorney, and my wife working as a nurse, we’d each need to earn at least 60% of the Colorado average for our respective professions to be able to buy a low-end single family home in Pagosa.
That’s now, in 2020.
Prices will rapidly increase as the property available on which to build homes gets more expensive. Archuleta land speculation is already driving up residential home site prices, which will exacerbate the affordable home crisis.
Maybe officials should consider the humble suggestion I made at the end of a previous column for the use of some land they already own.
Gary Beatty lives between Florida and Pagosa Springs. He retired after 30 years as a prosecutor for the State of Florida, has a doctorate in law, is Board Certified in Criminal Trial law by the Florida Supreme Court, and is now a law professor.