REAL ESTATE: The Riley Report

Hello From Beautiful Pagosa Country!

Finally, the snow in town is gone, and everything is greening up. The rivers are roaring, and rafters are riding the rapids. The weather has been great, with temperatures getting into the low 70s. Of course, there’s still a lot of snow up in the mountains, which will probably be there until the end of June.

Currently, the snow pack in our mountains is at 196% of median for this time of year.

The snow birds are coming back home to roost for the summer, but in general, the town is still pretty quiet and mellow. The locals are enjoying this time of year with less traffic and less hustle and bustle before the busy summer seasons starts in a couple of weeks.

Around town, we’re starting to see some dirt work happening here and there. The Springs Resort is planning an expansion, including an additional 78 guest rooms, a restaurant, more pools, and an upgraded spa. This project will be completed over the next couple of years.

Across the street, and just south of the post office, another project is in the works. This one is built around the old church which was moved here from Juanita, and has been sitting vacant for several years. I spoke to the owner/developer, Sean McMullen, about his plans. He intends to build 14 casitas – 6 this year and 8 next year – along with a barn aimed at hosting weddings and other social gatherings. The development will be named “Casa at Two Doves.” Right now, he’s a little frustrated with all the hoops he has to jump through with the Town, which keep adding costs to his project. This may or may not ultimately sink the project. I think this wedding venue would be good for the community, and I wish him well. We’ll have to wait to see what happens.

Finally, the word around town is that Circle K is putting in a new gas station across the street from the new Four States Tire & Service building near Walmart. I’m not sure when that project is supposed to break ground.

Now for the latest real estate news. There has been little change since last month. The total number of sales is down 50% from a year ago. Home sales are down 35%, condo sales are down 73%, and vacant land sales are down 58%. In April we closed 43 total sales, compared to 75 last April. This was our slowest April since 2014. Pending sales are also way down, with 84 today compared to 151 a year ago. On a positive note, I spoke to both the title companies recently, and they are seeing the market pick up.

There were a couple of statistics this month which caught my eye. At the moment, 60% of all the home inventory on the market is priced at $750,000 or above. If we look at the sales side, only 33% of the home sales this year were below $500,000. Compare that to 2020, when 78% of all home sales were below $500,000.

As you look at the stats this month, you’ll note that we’ve tweaked the format a little bit. We used to have several different categories for homes below $200,000. But today there are rarely ever any homes priced below $200,000, so we’ve lumped all those categories together. Similarly, homes priced between $500,000 and $750,000 used to be relatively rare. But today, that’s where the bulk of the sales are found, so we’ve split that category into two separate categories.

You can view the 2023 stats here.

Interest rates continue on their roller coaster ride, and are up again from last month. A 30-year fixed-rate mortgage is currently at 6.875%. A 15-year mortgage is at 6.5%. The Fed just raised the Federal Funds Rate for the tenth time, and it is now at 5.25%. This does not necessarily affect mortgage rates directly – it depends on the whims of the market.

There is good news for buyers in the real estate market – you’re going to see a lot of new inventory coming on the market soon. There will be new properties listed daily this time of year. If you’re a seller, there are a lot more buyers out there as we transition into the summer busy season. If you’re planning to put your property on the market, be careful not to overprice it, or it will just sit out there and get stale. In most cases, the greatest activity happens in the first couple of weeks the listing is active. If you don’t have activity in that time frame, you’re probably overpriced and need to adjust the price sooner rather than later. Typically, the shorter time a property is on the market, the more it will sell for.