Happy New Year From Beautiful Pagosa Country!
The biggest story of 2025 was the weather. For the second winter in a row, we have had very low snow totals. So far this year, we are about half the normal moisture for the region. I have no snow in my yard. Temperatures have been running 10 to 15 degrees above the average, which is 38 degrees. I’ve been feeling guilty for loving the fall in the middle of winter.
Hopefully the second half of winter brings a lot of moisture.
Wolf Creek Ski Area has received 81 inches of snow so far this year with a base of 44 inches at the summit, and 37 inches midway; the mountain is 100% open. Even though these totals are way below the average, they are still the best of any ski area around – Telluride, Purgatory, and Santa Fe are barely open. Wolf Creek was busy over the holiday season. The rumor is that they had a record day of over 6700 skiers on the mountain.
The weather has been feast or famine in the recent past. The only thing that saved us from drying out completely last fall was a record flood in October. The mountains received 10” of rain over just a couple of days. The San Juan River through town ran out of its banks. It was the third worst flood in the history of Pagosa. It is estimated that the floodwaters caused $13 million in damage. Thankfully, there was no loss of life.
The flooding lasted only three or four days, but it made national news, and the notoriety was not good for our local economy. Plenty of people canceled their reservations when they saw the floods on television, thinking that there would be no town left to come visit!
The town is still here, but our tourist stays were way down last fall.
The second big story of the year was the highway construction going through downtown. Half of the road was torn up so they could put in new utilities, infrastructure, replace the asphalt with concrete, and replace the sidewalks. Most of the first half of the roadway is now complete, and they’ve moved the project over to the other side. The goal is to have everything complete by the end of 2026.
All this construction has put a real strain on our local downtown merchants. During the construction, downtown parking has been more difficult, and it’s certainly not as pleasant to walk around as it usually is. If you can, I encourage you to go out of your way to give the downtown stores your support. Once all this work is finally complete, I’m sure it will be wonderful downtown!
Now for the latest real estate news. The dust has settled on 2025. The overall number of real estate sales was down 5% for the year compared to the previous year. There were 652 completed transactions in 2025, compared to 686 in 2024. Home sales were up 1% and condo & townhome sales were up 13%. These gains were offset by a 15% decline in vacant land sales.
Sales for the month of December were up slightly with 50 sales this December compared to 48 a year ago. Pending sales at the moment are down, with 39 transactions currently in progress versus 54 a year ago.
2025 started off strong with first quarter sales up 18% overall. Things then slowed down for the rest of year until the last two months, when they were once again up slightly. Make sure you check out all the stats and graphs to see a full picture of the market.
So, what are my predictions for 2026? I expect the real estate market to pick up this coming year. Mortgage rates are down about one percent from last year at this time. A 30-year fixed-rate mortgage is currently at 6.01% and a 15-year is at 5.55%. If you are purchasing what I consider a “middle of the road” Pagosa Springs home, the price will be somewhere around $600,000. With a 20% down payment, you are left with a mortgage of $480,000. Due to lower interest rates, your mortgage payment will be about $244 less than it would have been a year ago.
It’s been four years since rates were in the 3% range, so buyers are getting used to the new normal. Rates are expect to range from 5.9% to 6.3% unless the economy starts to falter. Then the Fed may jump in and reduce rates further.
I expect real estate prices to stay flat or increase just slightly. Homes priced below $750,000 are in the greatest demand. If they are priced correctly, they should sell relatively easily at 95% to 97% of asking price. Million dollar home owners are going to find things more challenging. Sellers may need to sharpen their pencils to get the pricing right in order to get the job done.
Some additional good news is that the stock market is doing well. That should help grease the wheels to help the real estate market. One last thing that is changing is that AI is becoming more important in real estate decision making, especially for buyers when they are weighing their options.
So long for now! I hope you and your family have a healthy and prosperous New Year. Think positive, have fun, be happy, and smile a lot!
Pagosa Springs real estate agent Lee Riley has regularly been one of the area's top selling Realtors® in recent years and offers a wide selection of real estate facts and information on his web site at ISellPagosa.com