REAL ESTATE: The Riley Report

Hello From Pagosa Country!

News flash! Spring has been postponed for 30 days due to so much snow!

As I look out my windows to the north, I have 10 feet of snow that has come off my roof. On the south side, it’s almost gone. Wolf Creek Ski Area has already received 480”, which is 63% above average. The snowpack in the San Juan Basin is at 179% of median. Personally, I’m not a big fan of the white stuff. I’d rather just have snow on Christmas Day and then green grass the next, but I do love all the good moisture, so I’m happy with what Mother Nature has provided us.

I recently spoke to several of our local merchants, and they explained to me that we did not have as strong a Spring Break season as we would have hoped. This is due to two reasons. One is both Oklahoma and Texas had their Spring Break on the same week this year, so the business wasn’t spread out over two weeks like it normally is. The second reason is too much snow! Wolf Creek Ski Area famously has “the most snow in Colorado,” but this year every place in Colorado and even northern New Mexico had lots of snow, so the out-of-state ski traffic was spread out all over the Rockies.

Another newsworthy story is the County stopped their moratorium on new vacation rentals, which has been in place since last September. As most of you are aware, this topic has been very contentious. I interviewed four of the main rental management companies yesterday so that I could be better informed as to the latest trends. First of all, short-term rentals are hurting. Right now, there is a glut on the market, meaning rents are way down and occupancy as well.

Long-term rentals are just the opposite – not many available and rents are high. The monthly rent for a typical 3-bedroom, 2-bath, 2-car garage in Pagosa Lakes runs in the $2,300 to $2,800 range, which is about double what it was pre-pandemic. I don’t think these rent prices would be considered affordable housing for the working class people in our community. The endgame for both the Town and the County is to find more affordable workforce housing.

I think we need to build a new mobile home park, and the perfect spot is in Vista adjacent to the existing park. There are approximately 80 lots already platted with roads in and utilities close by. However, the lots are currently unusable due to the high cost of bringing electric, water, and sewer the remaining distance to the lots. These lots could be split into standard-size mobile lots, and we would have about 160. This would put a big tent in our need. These lots have been sitting dormant for the last 50 years.

I received a special request the other day, which I’d like to pass along to any of my readers who might be able to help. We have a local non-profit called Rise Above Violence, which exists to help survivors of domestic violence and sexual assault. Right now, there is a desperate need for property owners who can provide safe spaces for domestic violence survivors to live short-term. These transitional housing spaces are used for 3-6 weeks at a time so that survivors can escape an abusive situation and make a successful plan on where to go and what to do next. If you have an unused living space that might be suitable for this purpose, please contact Kristen Bair at Rise Above Violence for more information. She can be reached by email at kristen@riseaboveviolence.org or by phone at 970-264-1129 ext 107.

Now for the latest real estate news. Total sales are down 53% from a year ago. Keep in mind the market was at its peak a year ago. Home sales are down 46% with inventory up 21%. Condo sales are down 75% with inventory up 50%. Land sales are down down 55% with inventory up 39%. Even though inventory is up in all of these categories, it’s still only about a third of what it was back in 2020.

Sales in the month of March were less than half of what they were in March of 2022. We had 41 total sales in March, compared to 86 a year ago. 2021 was even higher… as you can see…

Pending sales show a similar trend, with 77 today compared to 129 a year ago.

Click here for more stats.

Interest rates have stabilized in the 6% range, which is down from the peak of over 7%. Today a 30-year fixed-rate mortgage averages 6.08%, and a 15-year averages 5.32%. This is still way up compared to 3%, which we had back in January of 2022.

The number of buyers in the market is down. This is due to higher interest rates, worries about a recession, and global turmoil. Despite all these factors, prices remain relatively stable. My guess is that we’ve seen about a 10% price correction since the peak a year ago. My prediction for this year is that sales will be back to pre-pandemic levels.

Prices will be stable, or down a little.

We need more inventory to sell. With the massive amounts of snow this year, it could be what we call a “U-Haul Winter.” A ton of snow and a late spring will sometimes send folks off looking for a warmer climate.

Builders have received some good news recently. I spoke to Ponderosa Lumber and a couple of the builders I work with. They told me that most lumber prices are down around 40%, although manufactured lumber like glued-laminated timber remains high. Metal and garage doors are also still high. The savings from lower lumber costs have been absorbed by higher labor costs from sub-contractors like electricians, plumbers, and heating contractors. Those prices have gone way up.

So long for now! Remember to think positive, smile, and enjoy the day. Do a good deed today, and have some fun!