REAL ESTATE: The Riley Report

Hello From Pagosa Country…

…by way of Jamaica…

My wife, Laurie, and I have both had all our shots, and we are ready to see the world again. We were finally able to get out of Dodge for awhile. This is our third trip to Jamaica, and we are staying at the Sandals Resort. We are not allowed to go “off campus,” but we have all we need here – restaurants, bars, sand, and sunshine. I have been visualizing this trip for the past couple of months as I lay in my hot tub looking at the mountains. Now, I’m on the beach visualizing the mountains! The weather here is great, and the people are very friendly. Most of the visitors have had their shots, and all have been tested for the virus in order to come here. Masks are here and there but not required. It was a transition for us to go maskless, but I feel safe.

I hear rumors that Pagosa weather is also beautiful with temperatures in the 70s on Easter Sunday. Wolf Creek Ski Area is now closed for the year as of Monday. The mountains received around average snowfall this winter, but it is coming off in a hurry. We’ve had a lot of warm weather recently, and the water is being absorbed quickly due to last year’s drought. Snowpack in our mountains is currently at 71% of median for this time of year. Pray for spring rains and a strong monsoon season.

As spring arrives and flowers bloom, I think that we too will have a new beginning. As of April 2, Colorado’s Governor Polis announced that all adults in Colorado are eligible to receive the vaccine. It’s been a long haul, but I think we’re close to getting back to normal. I’ll be curious to see what positives come out of this ordeal.

Now for the latest real estate news. The market is even busier than I was expecting. Total sales are way up by 98% over last year. Pending sales are triple last year, and inventory is down across the board. Home sales are up 51% with inventory down 66%. Condo sales are up 26% with inventory down 86%. Vacant land is up 196% with inventory down 42%.

My initial question was, “How can sales be up if we don’t have anything to sell due to lack of inventory?” I did some digging and came up with a couple things. We don’t consider properties that are under contract to be a part of “inventory.” So if there’s already a pending sales contract on a property, we don’t count that in our inventory numbers. As I mentioned before, pending sales are currently triple what they were last year at this time, so that’s a whole bunch of properties which aren’t counted in inventory, but are still getting sold nonetheless.

Another factor is that properties don’t stay on the market as long as they used to. Days-on-market is down by 40% for both homes and vacant land, and about 20% for condos. So when new properties hit the market, they get gobbled up quickly. Many only last for a few days. Some of these properties may never get counted in inventory at all, but they still get sold, just the same.

One thing that’s for sure is prices are rising. Building costs are way up. Interest rates are on the rise, but they’re still great. A 30-year fixed-rate mortgage is currently 3.125% and a 15-year is 2.375%. I have buyers asking how they should deal with this kind of market. Occasionally you can find something before it hits the market, but this is rare. It’s better to be ready to pull the trigger in a hurry when a property you like hits the market. Be pre-qualified and pre-approved for a loan, or better yet, bring cash.

By the time you read this, I will be home from Jamaica, back in the office, and ready to roll! Give me a call if you’d like some help jumping into a red-hot real estate market.