REAL ESTATE: The Riley Report

Hello From Beautiful Pagosa Country!

It’s a cloudy morning. We’ve been under a flood watch for the last two days, but all we’ve been getting are a few sprinkles. I keep looking at the seven-day forecast, and the weatherman keeps promising rain from the monsoons. And time after time, he disappoints me.

Currently, we are in a severe drought – the 7th driest year in the past 132 years. With that being said, we are expecting and hoping for a strong El Nino this winter which will hopefully mean we’ll be getting a lot of snow. We are hoping that the Snow Gods don’t disappoint us!

On a positive note around town, the downtown road construction project is 85% complete. It’s still a pain, but I’m seeing light at the end of the tunnel. School started last week, and a lot of parents are excited to get the kids out of the house.

This is Labor Day weekend, and there’s been a lot going on. Saturday saw the grand finale of the town concert series, with live bands, food trucks, and craft beer. Yamaguchi Park also hosted a large pickleball tournament starting Thursday and running through the weekend.

On the other side of town is the Eastside Market, which has lots of vendors selling art, crafts, and jewelry. The farmer’s market continues on Saturdays from 9:00am to 1:00pm at St. Patrick’s Episcopal Church.

There’s plenty going on all over town, so get off the couch, turn off the TV, and enjoy Labor Day!

Now for the latest real estate news. The total number of sales year-to-date is down 15% compared to last year. There have been 350 sales compared to 414 in 2025. Home sales are up by 7% with 208 versus 194 last year. Condo and townhome sales are down dramatically by 40% with 27 compared to 45 a year ago. Vacant land is also down 33% with 111 sales versus 165 last year. Inventory is up slightly across the board. The strongest part of the housing market is homes priced at $750,000 and above, which are up 40%.

The combination of lower condo and vacant land sales are why the total sales numbers are down so far this year. The major culprit in the townhome market is high HOA fees caused by big increases in insurance rates over the past couple of years. Vacant land is down partially because Pagosa Area Water & Sanitation District (PAWSD) has tripled their hookup fees over the last couple of years. Higher building costs are also impacting the vacant land market, because it makes it cheaper to buy an existing home rather than build a new one.

Interest rates are going the wrong way. A 30-year fixed-rate mortgage was just under 6% at the beginning of the year, and now it’s up to 6.89%, and a 15-year is 6.39%. These are the highest rates we’ve seen this year. The Federal Reserve is expected to raise rates in September, so there’s a chance we may see 7% mortgages in the near future.

Fortunately, we have a lot of cash buyers in our market.

A couple of other stats I’m keeping an eye on are pending sales, which are down 17% with 82 today compared to 98 a year ago. Sales in the month of August were down by a third with 38 this year versus 59 last year.

If you are a buyer, there are some great deals out there. Fall is typically the best time of year to get a deal. Sellers have been reducing prices so they can avoid keeping their property on the market through another winter. We continue to have a buyer’s market, but buyers need to keep in mind that not all sellers are willing to negotiate. When I’m talking to my sellers (or at least the ones who listen to me), I encourage them to to price aggressively with very little meat on the bone. The moral of the story is that even if you have to pay full asking price on a great deal, that’s much better than getting a discount on something that’s vastly overpriced.

So long for now! I hope you enjoyed the Labor Day holiday.

Thanks again to all of our military and first responders, as well as their families. As always, think positive! The glass is half full. Smell the roses. Today is the most important day of your life…