EDITORIAL: The Biggest Problem Facing Pagosa Springs in 2021, Part Ten

Read Part One

Near the conclusion of my interview with Archuleta County Habitat for Humanity’s executive director Lori Hendricksen and board president Paul Lehmann last week, Ms. Hendricksen commented on home prices.

“I have a search I do… I think it’s on Zillow… I ask them to send me an email whenever there’s something between $179,000 and $285,000 — which is the the typical price range for USDA [Rural Development] loans. And I rarely get any emails.

“But I did get one the other day. I think it was a 400 square foot little home out in Aspen Springs that — a year ago — was offered at $120,000. And now it’s $299,000. There’s another home, right near our office here, in downtown… $599,000.

“$599,000… just a few block down. I think it’s been a vacation rental…”

I suppose Ms. Hendricksen was referring to this house, on South 9th Street, which is currently listed at $599,000 through Sherpa Real Estate:

The house was purchased in 2007 for $35,000. It sold in 2016 for $320,000, presumably after some major remodeling. But a nice profit for the seller nevertheless, perhaps?

Not exactly what one might think of as a millionaire’s palace… nor is the general neighborhood terribly upscale.  But in our current, crazy, “vacation rentals über alles” market, maybe it will be snapped up quickly.

From the property listing:

Has it been a dream of yours to own a short-term rental in downtown Pagosa Springs within walking distance of Natural Grocers, Goodman Department Store, The Springs Resort, Riff Raff brewery, and much more? If so, then you might want to pinch yourself as this prime investment opportunity doesn’t just have one rental but two! Yes, that’s right! This duplex that comes fully furnished and wonderfully appointed is set up as a short-term rental and is ready to generate income and a cash flow situation depending upon your financing rates. Last year alone, it generated approximately $40k in gross rental income.

Ms. Hendricksen, like the rest of us, is trying to understand what has happened to the real estate market in this small mountain town.

“I think people are just going crazy, trying to see how much they can get, because they know the market is crazy. But I think prices will start leveling off again. I mean, let’s hope so…”

Mr. Lehmann weighed in.

“Well, it’s got to do more that just level off. Something has got to break. Something has got to break, or…”

I suggested that something is already broken. That the Archuleta County housing market is broken.

Mr. Lehmann:

“Yes, it is broken. It’s broken, for those of us who are working in it. We know it’s broken. Now, the news needs to seep up to the rest of the world…”

Which brings me back to my basic argument: that selfish entitlement is our biggest problem in Pagosa Springs. When a person is selfishly entitled, he or she doesn’t even realize it… because the ‘entitlement’ mindset means that a person believes they deserve everything they have, and possibly, everything they desire as well, regardless of the negative effects on the community around them. I can easily recognize other people who suffer from entitlement; it’s almost impossible for me to recognize my own feelings of entitlement.

By definition, a person who feels entitled cannot recognize their selfish tendencies, because their sense of entitlement excuses it.

We’ve been taught that greed is good. We’ve been taught to try and get as much as we can, while the getting is good.

How remarkable… that when I located the following one-minute clip from the 1987 movie, Wall Street, YouTube presented me, first, with a commercial advertisement for VRBO.com.  Maybe you will be equally lucky.

We’ve learned to accept greed as a good thing. Not in so many words… not so explicitly… not so blatantly… but basically, that’s what we’ve come to believe, when it comes to selling real estate. We’ve been told, by everyone around us, that real estate is a “great investment”. Told by our parents; told by our governments; told by our friends; told by our financial advisors… and confirmed by our experiences.

My house is a magic goose that will ultimately lay a golden nest egg for me, someday.

A few unlucky homeowners who lost their homes to foreclosure, during the Great Recession, might be the exceptions to the rule. About 6.3 million American families suffered that fate between 2008 and 2014. But they were, as I said, the exceptions to the rule. Eventually, those foreclosed homes were bought up, and flipped. Or converted into vacation rentals.

We might know successful people who bought a house in 2016 for $320,000 and sold it five years later for $599,000. Successful people. Good people, who played the game and won.

Perhaps we also know unsuccessful people as well, who are currently living in their cars. These are the losers.

Rarely does anyone draw a direct line between home prices doubling… and the poorly stocked shelves in the supermarket, or the exhausted faces of our local employees working double shifts because 14 columns of Help Wanted ads in the local newspaper are unable to generate a sufficient workforce to keep Pagosa running smoothly.

Rarely does anyone connect a vacation rental, bought for $320,000 and sold for $599,000… with the unhappy circumstance of people living in their cars.

A Daily Post reader asked me, yesterday, if I had “data” to support something I wrote in Part Seven of this editorial series:

The vacation rental industry has acted like a wrecking ball on our local workforce and economy.

Ah, yes.  Data.  Data is a wonderful thing.  Are poorly-stocked grocery store shelves considered “data”?  The exhausted faces on local employees… would we call that “data”? 14 columns of Help Wanted ads… is that “data”?

Here’s something everyone would probably consider to be “data”. According to Town Manager Andrea Phillips, speaking at the Town Council work session on vacation rentals last week, slightly more than 15% of the residential homes within the town limits have been approved as, or have applied to be, vacation rentals. More applications are arriving on a regular basis.

I will share more of that particular Council discussion tomorrow. But first, let’s consider what the reaction of our community leaders would be, if a wildfire swept through the town of Pagosa Springs, and 15% of the residential homes were destroyed. Wouldn’t we consider that a catastrophe? I propose that our local leadership would be down on their knees, begging for federal disaster relief.

But when 15% of our homes — homes that once accommodated full-time workers, families, elderly retirees — have been converted to mini-motels… well… people are entitled to do whatever they want with their own property.  Isn’t that what ‘entitled’ means?

Read Part Eleven…

Bill Hudson

Bill Hudson

Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.