REAL ESTATE: The Riley Report

Happy New Year from Pagosa Country!

This year, “Happy New Year” is an understatement. We have never been so ready for the new year than right now. Good riddance to 2020!

That being said, there are always positives that come out of negatives, and the turmoil of 2020 is no different. Here are just a few positives: we have much greater appreciation for our doctors, nurses, and first responders. We are a more hygienic society than we used to be. My hands are the cleanest they have ever been! I haven’t caught a cold for as long as I can remember.

So far, the flu season has been mild. In the Southern Hemisphere, where the seasons are opposite and the flu season has already passed, influenza cases were down 98% in 2020.

Interest rates for home mortgages are as low as they have ever been. A year ago, the average rate on a new 30-year fixed-rate mortgage was 3.66%. Today it is down to 2.72%  If we apply those rates to a new home purchase of $400,000 with a 20% down payment, the result is a savings of $165 on each monthly payment. Over the life of the loan, that’s $59,400.

Many of us have saved a lot of money this year on everything from travel to restaurants to shopping. We’re not spending money because there is no place to go. The equity in our homes has gone way up. The median sale price for homes in Pagosa is up 11% this year due to a shortage of inventory. Condo prices are up 9%. The stock market is at record highs. The S&P 500 stock index finished the year up 16% after recovering from a pandemic-induced crash in March.

Wolf Creek Ski Area has lots of snow, which will help out our local drought situation and put smiles on the faces of all the skiers. Wolf Creek is reporting 77” at the summit and 66” midway. Other areas in our part of the state are not doing quite as well, and snowpack is currently at 70% of median for this time of year.

Local tax revenues were way up this year. Our local economy is still generally very strong, though the COVID restrictions have been hard on certain restaurants and businesses. Many of our local businesses have shown great resiliency and imagination in adapting to the changing regulations.

Last but not least, we have the vaccine, which is the light at the end of the tunnel.

Now for the latest real estate news. 2020 in Pagosa Springs was the busiest year ever. I’m starting my 31st year in the business, and it’s been a whirlwind of activity. Through August of this year, sales were still down compared to last year. On September 1st, sales were up 1% for the year. After an extremely busy fall, we ended the year up 32%.

Home sales ended up 39% and inventory was down 55%. Condo sales were up 26% and inventory down 85%. Currently, there are only four condos or townhomes left on the market. That is not a misprint! It is hard to fathom that number. Land sales were up 27% and inventory was down 28%. Overall real estate sales ended the year at 1,087 total sales. The last time we sold over a thousand properties was back in 2005. You may recall that 2005 was the peak of the vacant land boom, when National Recreational Properties, Inc. bought up all the inventory they could get their hands on, and then quickly flipped the properties. Back in 2005, vacant land represented 63% of all sales. Today it is down to 41%.

These charts provide even more information about what happened in Pagosa in 2020:

So, what should we expect in 2021? Most likely, sales will be down this year due to lack of inventory. Prices will continue to rise, due to supply and demand. Hopefully, lumber costs will start to go down once the lumber yards and producers get back up to speed.

If you are a potential seller and want to cash in, this may motivate you to sell while the market is hot. Hopefully, we will get the virus under control soon. Hopefully politics will mellow out and we’ll start working together instead of against each other.

My two biggest wishes for 2021 are to get vaccinated so I can travel again, and that our country mends its wounds so that once again we can be the United States of America.