REAL ESTATE: The Riley Report

Happy New Year from Pagosa Country!

I hope you and your family had a wonderful holiday season. My wife Laurie and I spent Christmas in Denver with my son, Patrick; daughter, Heather, and her husband, John; along with the four grandchildren. Let’s not forget the newest member of the family; Archie – our new golden retriever puppy!

A great time was had by all.

The big news around town is no snow! I have lived here for 41 years, and this is the driest and warmest I can ever remember. Even with the lack of snow, both the town and the ski area were busy. Wolf Creek Ski Area has 48 inches of snow at the summit, which is well below the average of 69 inches we normally have this time of year. Our snowpack in the mountains is at 79 percent of median.

Personally, I am really enjoying this balmy weather, but if we don’t get a big dump of snow soon, we will be covered in smoke this summer. There is still a lot of winter to go, so there is no need to panic just yet.

Now for the latest real estate news. We have closed the books on 2024, and the year turned out to be pretty uneventful. The overall number of real estate sales was up a whopping one percent, with 686 total transactions in 2024 compared to 679 in 2023. Home sales were down 5%, and home sales priced below $600,000 were down 29%. On the flip side, home sales priced above $1,000,000 were up 42%, with 71 sales this year versus 50 last year. Inventory of available homes is up 25%.

The reason for the discrepancy between the price classes is interest rates. High-end buyers tend to pay cash, and entry-level buyers need to get a mortgage. Thus, high interest rates lead to lower sales in the lower price ranges. Interest rates stand at 7.25% for a 30-year fixed-rate mortgage, and 6.5% for a 15-year. Interest rates hit a low point back in September after the Fed dropped the prime rate by a half percent, but since then, rates have been creeping upwards. The reason is that the economy is strong enough to keep inflation as a concern for the future. I expect mortgage rates in the 7% range will be the new norm for the foreseeable future.

Condo and townhome sales were a bright spot in the market with sales up 24%. There were 68 sales in 2024 compared to 55 in 2023. Land sales were only up 2%. The strongest category for land sales was between one-half and three acres, where sales were up 18%. These size lots are mostly found in Aspen Springs.

Make sure to check out all the stats and charts I’m including here. We now have 20 years of accumulated real estate data!

Some more good news for the market is that December sales were up. We had 48 transactions this December compared to 36 a year ago. Things seem to have picked up after the election. Here in my office, I’ve been very fortunate. I had a great 2024, and 2025 is starting off with a bang. I’ve had three homes and one piece of vacant land go under contract the first week of the year. Another positive item to report is that new home building permits were up for the year, with 131 permits in 2024 versus 99 in 2023.

My prediction for 2025 is for a somewhat stronger market with prices up slightly. I expect we will see more available inventory than last year. The dream of 3% mortgage rates has gone by the wayside, and 7% will be the new normal. Waiting around for lower rates is probably a waste of time, so you might as well get in the game whether you are a buyer or seller. The time is now!

Happy New Year!