REAL ESTATE: The Riley Report

Hello From Pagosa Country!

We have just experienced one of the nicest Indian Summers that I can remember. Temperatures have been above average and the Fall colors were gorgeous this year. But winter is starting today. We are expecting rain and snow off and on for the next several days. Wolf Creek Ski Area has been open for two weeks now, and it was once again the first ski area in the nation to open for the season. The mountain is reporting 24” of snow from the latest storm, with 65” so far this year.

Something else that happens this time of year is big game hunting, and the season is about half over. Hopefully the incoming weather changes will move the animals down and give the hunters a greater opportunity for success.

Even though Christmas is well over a month away, I’m excited about a couple new things I’ve gotten in my life over the past couple weeks. The first is a new shoulder! After a successful surgery, I’m on the road to recovery, and I should be fishing again before you know it. The second is a new puppy. I’m happy to introduce our new Golden Retriever. His name is Archie!

A big local issue which has recently come back into focus is the potential reservoir site at Running Iron Ranch. This project was started back in 2008 as a response to the major drought we had in 2002, which is the year the San Juan River nearly ran dry in town. There are two local agencies which have an interest in the property. They are the Pagosa Area Water and Sanitation District (PAWSD) and the San Juan Water Conservancy District (SJWCD). I recently spoke to members of both agencies, so here is the Reader’s Digest version of what I found:

PAWSD would like to sell the property to get out from under the debt incurred from the purchase of the property. PAWSD has been making loan payments on the property since it was purchased. PAWSD feels that they have other options for water storage in the future which would be more cost effective than a new reservoir at Running Iron Ranch.

SJWCD is against the sale of the property. Or perhaps more specifically, they do not want to abandon the reservoir project entirely without further research and consideration of the potential consequences of giving up on building the reservoir. PAWSD feels that enough research and consideration has already been done.

At least one private party has expressed an interest in making an offer on the property, so the issue has come to a head. PAWSD would like to move toward selling the property, starting with an appraisal and a resolution to accept “serious offers” from potential buyers. SJWCD wants PAWSD to retain the property.

Lawyers are beginning to get involved, and it looks like the situation may deteriorate further. I’m hopeful that both sides will begin to communicate more clearly, and that we can come up with a win-win resolution to the problem.

The Pagosa Springs SUN published a lengthy and thorough article on the situation in their October 31 issue. If you are a subscriber, you can read the entire article there.

Now for the latest real estate news. For the first time in my 20+ years of watching these monthly statistics, the total number of sales year-to-date is exactly the same as it was last year. The number is 592 versus 592. The market is flat!

These numbers are way down from the peak of the market back in 2021, when we had 1,050 total sales at this time of year. The median sale price for homes is up 15% this year, but in general, home prices are in decline across the board.

How can this be?

The reason that median sale price is up while overall prices are falling is that we are selling a lot more million-dollar homes than we used to. This pushes the median price up even though individual home values are going down.

Building permits in Archuleta County are up slightly. At the end of October, the County had issued 121 single family residential permits, compared to 92 permits at the same time last year.

Now for interest rates, which have been the main culprit for our declining market over the last couple of years. Mortgage rates right after the pandemic were around 3%. Earlier this year they hit a high over 8%. They are currently a little over 7%, but that’s up a full percent compared to where they were a month ago, even though the Fed dropped their rates by a half percent back in September.

Why would mortgage rates rise with the Fed dropping rates? The main reason is the national economy. Data about jobs and consumer spending is showing a stronger economy, so concerns about inflation are popping up again. This leads to higher interest rates.

Happy Thanksgiving to everyone, and especially to our our military and first responders!