REAL ESTATE: The Riley Report

Hello From Pagosa Country!

As I look out the windows this morning, I can’t see the mountains as clearly as normal due to a lot of smoke and dust in the air. There are several fires burning in New Mexico and Arizona. We are also experiencing much windier than normal conditions. Unfortunately, a lot of our good winter moisture is blowing away. This is the windiest spring I can ever remember. The snowpack in the mountains is currently at 40 percent of median for this time of year.

Town is pretty quiet right now. April is one of our slowest months of the year for tourism. The skiers have gone home, and the snowbirds haven’t yet come back to roost. Several of our restaurants have taken advantage of the lull to shut down for a week or so to give their employees a break after a busy ski season, and also to clean house and restock for the coming summer rush.

Next, I have a couple of local newsworthy items. First, I want to congratulate Shari Pierce, our newly elected mayor. I also want to give a big thank you to Donny Volger, our retiring mayor, for a job well done.

Second, I want to put in a plug for a non-profit community event that’s happening tonight, Friday, May 6 – the fourth annual Pagosa Build Auction. This event includes dinner, auctions, and music provided by the Pagosa Springs High School Americana project. Proceeds support career & technical education in our area. For more information or to buy a ticket, visit BuildPagosa.org.

Now for the latest real estate news. Overall sales are down 34% from last year. Home sales are down 24%, condo sales are down 3%, and land sales down 42%. The two segments showing the biggest change are condo inventory, which has jumped up from 2 available a year ago to 15 today, and homes priced above $1 million which are up 59%, from 17 last year to 27 today.

Overall, I see the real estate market starting to soften. I think prices have peaked.

Here are the factors affecting the change. Interest rates have jumped up dramatically since the first of the year from 3% to 5.5%. The typical three bedroom, two bath, two car garage, 1600 square foot home in Pagosa is priced around $600,000. If you are getting a standard mortgage with 20% down, your payments have gone up a whopping $694.30 per month. I’m expecting rates to continue to rise. We may see 6% in the near future. We have been spoiled for many years. 5.5% is still historically low. When I bought my first home, it was 8.5%.

To compound the increase in mortgage payments, we have inflation at 8%, gas prices up 25%, the stock market has taken a dive, and there’s talk of a recession next year. This is not good for the consumer psyche.

On a positive note, Pagosa is very affordable when compared to other mountain resort communities. Along with its small-town charm, friendly people, and gorgeous scenery, we will continue to see an influx of new residents.

So long for now. Remember – today is the most important day of your life. Make the most of it, think positive, smell the roses.  Finally, I hope all of the mother’s out there have a wonderful day on Mother’s Day!