REAL ESTATE: The Riley Report

Photo: 470 Buena Vista Place, Pagosa Springs; $750,000

It’s a beautiful morning, not a cloud in the sky.

It’s been a strange weather year, similar to last year. We are in a severe drought. Once again, we had a very, very mild winter with little snow, and the springtime rains didn’t happen. On top of that, it’s been extremely windy, which dries out the forest even further. The San Juan River is running at 41 CFS (cubic feet per second). That’s compared to a norm of 1,000 CFS this time of year. We are very close to the historic low-flow record of 22 CFS which was set back in 2002.

Due to all these concerns we have both water restrictions and fire restrictions in the area. No outdoor fires of any kind are allowed – not even charcoal. If you’re out there camping in the woods, please follow the rules and do not start any fires!

So much for gloom and doom… The downtown road construction project that has been going on for the last year and half is coming along nicely. Traffic is still a problem, but we are beginning to see the light at the end of the tunnel. Yesterday, I spoke to one of the project supervisors regarding the intersection at Lewis Street. This is one of the busiest intersections downtown, and it has been closed for quite a while. It’s been taking so long because of all the utility infrastructure in that location. He said it should be open again by July 18. The downtown merchants on main street are much happier this year as their section of the project is finished and was ready for 4th of July festivities.

Here is a quick rundown of all the activities happening over the holiday weekend. Art in the Park — which included arts & crafts vendors along with food vendors and live entertainment — ran through Sunday. The July 4th Parade included a flyover from local aviators. The 76th Annual Red Ryder Rodeo took place happening at the fairgrounds. The community band concert performed at the Springs Resort. And last but not least, the Vets for Vets held a big party in Yamaguchi Park

Unfortunately, there were no fireworks this year due to the severe drought.

Now for the latest real estate news. Total year-to-date sales are down 14% from last year, with 259 sales in 2026 compared to 302 in 2025. Home sales are up 7%, condo and townhome sales are down 37%, and vacant land sales are down 28%. Inventory is up slightly. Home inventory is up 2%, condo and townhome inventory is up 14%, and vacant land inventory is up 5%. Sales for June were up slightly with 56 sales compared to 47 last June. Pending sales are down with 59 versus 67 last year.

The bottom line is the market is flat and continues to be soft. This is a buyer’s market. The culprits are a combination of interest rates and inflation. A 30-year fixed-rate mortgage is currently at 6.65% and a 15-year is at 6.12%. The 30-year rate was down to 5.99% before the war with Iran.

Inflation is up. This means the Fed is probably in a holding pattern for most of the rest of the year, so I don’t expect interest rates to come down much anytime soon. This is also keeping some buyers and sellers on the sidelines.

There is good news if you are a buyer. There are some good deals out there with a lot of motivated sellers who are pricing aggressively. If you are a seller, the good news is more scarce, but we do have quite a few cash buyers who are not sensitive to mortgage interest rates. My prediction for the market is that once we get down the road a month or two, we’ll see things pick up as the war becomes less of an issue.

So long for now! I hope you and your family had a great 4th of July.

Thanks again to all of our military, our first responders, and their families. These people, doing their jobs makes, the USA the best place in the world to live!