REAL ESTATE: The Riley Report

Happy New Year From Beautiful Pagosa Country!

I hope you and your family had a fantastic holiday season. The Riley Clan were all here, including our four grandchildren: two eight-year-olds and two eleven-year-olds going full speed with no second gear. We enjoyed them while they were here, and it was equally nice to see them go back home.

With that being said, we love them dearly!

Even though December was warm and dry with very little snow on the ground, the town was still busy. The ski area only had 27” of snow on the mountain, but I didn’t hear anybody complaining about the bluebird days and no travel worries. January has been the complete opposite with lots of snow. Wolf Creek Ski Area received 55” in the past few days and has accumulated 68” at the summit. The temperatures in the morning have been below zero for several days.

All the new snow downtown is great news since Winterfest starts today — January 19 — and runs through January 21.

One big project we’re all watching downtown is the expansion of the Springs Resort. The foundations look to be in, and the site is full of heavy equipment, cranes, and lots of workers. I spoke to Todd Mees, the hotel manager, to get the latest news. The plan is to add 79 new rooms which will give them a total of 158. There’s also going to be a new restaurant, which will utilize a farm-to-table concept, along with an outdoor music venue and a brand new spa with lots of new hot tubs. Completion is scheduled for the spring of 2025.

This area has seen quite a change from when I moved our family here back in 1983 to open the Best Western Oakridge. At that time, there were no stoplights, and the only paved road in the county was Highway 160 running through town. The spot where the new hotel is going in was just a Hippy Dip. Those were the good old days!

Now for the latest real estate news. 2023 was pretty soft. Total number of sales were down 20%, home sales were down 11%, condos and townhome sales were down 35%, and land sales were down 26%. Some good news is inventory was up 4% in both the home and land category, and condo and townhome inventory was up 340%. As I look at my stats, there are a couple of notable numbers. Condo and townhome inventory is at 22 compared to 5 last year, getting us near the pre-pandemic number of 26 back in 2020. The increase in home inventory is all coming at the top end of the market, with inventory above $750,000 up 35%. Make sure you check out all the charts I’m including here, some of which go back 20 years. Pay particular attention to the three graphs comparing pre- and post-pandemic numbers.

The biggest issue affecting both sales and inventory in the residential market this year was interest rates. Back in October, rates got up to 8.25%, a far cry from the 3% rates we saw a few years ago. Rates have started to decline and are hovering in the high 6% range. Today, the average rate for a 30-year fixed-rate mortgage is 6.69%, and a 15-year is at 5.95%. The economists are predicting that rates will fall, maybe as early as March, but I think it will be closer to June before we see anything. Hopefully by the end of 2024, rates will be closer to 6%, and in the 5% range by 2025.

My prediction for the local real estate market this year is that prices will be relatively flat. One wild card could be inflation going down sooner than expected, allowing the Fed to ease rates sooner rather than later. A second wild card might be political problems out there in the world. This is an election year, and anything could happen!

So long for now, I wish you all a great 2024! Think positive, and remember — today is the most important day of your life. Make it a good one!