REAL ESTATE: The Riley Report

Hello From Pagosa Country!

Little by little, our country and Pagosa Springs are getting back to normal. With more and more people getting their shots, masks are coming off, and anxiety levels are dropping. Hopefully, more of the undecided population will get their shots soon. I’m hoping this summer is like the good old days with a 4th of July parade, County Fair, and lots of festivals.

So far, our spring weather has been drier than we had hoped. It’s also been very windy, which is evaporating a lot of the moisture we received this winter. The snowpack in the mountains is currently at 50% of median for this time of year.

Around town, one of the biggest issues we are dealing with is vacation rentals. We have a severe shortage of affordable workforce housing in our area. One of my workers is currently living in his truck in the National Forest. Over the past few years, many long term rentals have been converted to short term rentals. We have a lot of seasonal residents who have purchased their home or condo and rented it out in order to subsidize their costs. This is especially prevalent in the condo and townhome market.

This lifestyle conflicts with many homeowners who don’t want a stream of visitors in their backyard. Certain subdivisions have enacted deed restrictions eliminating short term rentals. At a heavily attended recent meeting, the County Commissioners enacted a series of reforms for vacation rental permits and regulations. I expect that we’re not finished dealing with this issue yet. If you have any input, contact your County Commissioner.

Now for the latest real estate news. Like a snowball rolling downhill, the real estate market is only gaining steam. Total sales have more than doubled last year at +113%. Home sales are up 46%. Condo sales are up slightly at +15%, but this is only because of lack of inventory. There are only two condos currently available on the market. Land sales are skyrocketing. We’ve had 243 this year compared to 170 last year at this time. Small lots of under 1/2-acre are up a whopping 435%. One- to three-acre lots, which are typically in Aspen Springs, are up 112%. Three- to five-acre lots are up 330%. The message seems to be if you can’t buy a home or condo due to lack of supply, buy land!

If this lack of inventory continues, eventually it will slow this snowball down. But for now, the market is still very hot, and pending sales are off the charts.

Interest rates are still great but starting to creep up a little bit. A 30-year fixed-rate mortgage is currently 3.0%, and a 15-year is 2.25%. Building material costs are almost double what they where last year, so the cost of new construction is prohibitively expensive for many folks.

Summer is just around the corner. I hope everyone stays safe, and I hope to see you soon in beautiful Pagosa Springs!