REAL ESTATE: The Riley Report

Hello From Beautiful Pagosa Country!

Daylight Savings Time kicked in recently, which makes me very happy. If I ruled the world, I would keep it year round.

So far this winter, temperatures have been warmer than usual, with the snow level less than average. Wolf Creek Ski Area has received 269” of snow with 89” accumulated at the summit. We got a helping of new snow this week. Hopefully we’ll get a lot more snow over the next month or so to catch up on our moisture and keep things green this summer.

Currently, the snowpack in the region is 90% of median.

Town is bustling right now with lots of Spring Break skiers in town. We should stay busy for the next couple of weeks. The merchants are happy campers with hopes of filling their coffers enough to get them through the next couple months until the summer tourists arrive.

Now for the latest real estate news. In general, the market is improving over last year. Total sales are up 41%, with 76 closed deals so far this year compared to 54 at this time last year. Home sales are up 22%, condo and townhome sales are up 100%, and land sales are up 50%.

Keep in mind this is a small sample size with only two months worth of data.

The big news is the increase in inventory across the board. Home inventory is up 49% with 107 homes on the market compared to 72 last year. Condo and townhome inventory is up a whopping 250% with 21 available versus 6 last year. Land inventory is only up 3%. Approximately two thirds of the homes available are priced above $750,000, and about two thirds of the sales are below $750,000. Pending sales are down slightly with 59 this year compared to 65 last year.

The biggest factor affecting the real estate market is still interest rates. A 30-year fixed-rate mortgage is currently going for 6.92%, with a 15-year at 6.44%. Two years ago, rates were at 3%. Last October, they hit 8.25%. A month ago, they were at 6.5%. So it’s safe to say there’s been a fair amount of fluctuation! There were hopes that the Fed might start cutting their prime rate in March, but now that’s looking more like June or July, with three or four cuts expected in the second half of 2024. I’m hoping we see 6% mortgages by the end of the year, which will help our real estate market quite a bit. These high rates are keeping a lot of buyers and sellers on the sidelines waiting for a better deal.

Some disturbing news is the cost of new water and sewer hook-ups is going way up, which affects the cost of new construction. New construction hook-up fees have nearly tripled under the new rate scheme. Last year it cost around $9,000 to connect a new home to water & sewer. Under the new rates, it will be $24,655.

These fee increases are intended to offset a variety of costs that are coming down the pike. The Snowball Water Treatment Plant is in the midst of an upgrade which is currently projected to cost $44 million. The Vista Wastewater Treatment Facility will soon require an upgrade projected to cost around $10 million. Recent inflation and supply chain difficulties have added 20-30% to the day-to-day cost of treating our water in Pagosa.

So long for now! Spring is just around the corner. I hope the grass will be greener where you are. Think positive and smile more!