Lee Riley’s Real Estate Newsletter, August 2011
Well, summer is about half over. The fishing has slowed down quite a bit due to warmer waters. The monsoons have just started doing what they are supposed to do, which is to give us a shower in the afternoons. It had been pretty dry for a long time, and the last several days of rain have been nice. I hope it rains again tomorrow!
It seems like every weekend we have some kind of festival or event going on. Up this weekend is the 60th annual Archuleta County Fair. It’s lots of fun – especially the livestock auction and the rodeo. You can visit ArchuletaCountyFair.com for more details. I will be in a dunking booth if you want to get even with me for anything or come out for some good laughs.
The local economy is doing reasonably well. I read last week in our local newspaper that sales tax revenue is up 24% compared to last year, and the local unemployment rate has recently fallen to 9.9%. Now, if we can get the politicians in Washington to do what we sent them there for, rather than worrying about their job security, we will all be better off.
So much for small talk. The real estate market is improving. Overall, sales are up 32%, with home sales leading the way, posting a 46% gain compared to last year at this time. Land sales continue to be flat. Condo sales are up slightly, but remain a tough sale. With home prices at an eight-year low, many buyers are asking, “Why buy a condo with monthly fees when you can buy a home for just a little more?” Homes are typically a better value, and extremely low prices have convinced a lot of would-be condo buyers to purchase a home instead.
I see two big changes in the market right now. First, the number of homes currently on the market is down by about 100 compared to the same time last year. Second, the bank repos are at their lowest level in a long time. When a new foreclosure comes on the market, they are gobbled up quickly because the banks have been pricing more aggressively than they were in the past.
For example, I recently listed a very nice 3 bed, 2 bath, 1400+ square foot ranch-style home for $132,900, and I had five offers right away. I had told the bank to list it for $175,000, but they didn’t take my advice. The result was a very quick sale and a tremendous deal for the buyer.
The big question in my mind is “How much inventory is still in the repo pipeline?” It’s very difficult to tell how many foreclosed properties are just sitting out there waiting to be listed. The repo inventory is the key to a turn-around in the market, so we can finally see some appreciation. Indicators point to light at the end of the tunnel.
One other trend I want to mention is the big jump in the very high-end and low-end of the market. While much of the middle of the market shows mixed results, we’re seeing big gains at the extremes. Home sales under $200,000 are up 78% this year, and sales above $1,000,000 are up 150%.
Finally, don’t forget to come out to the fair this weekend. I hope to see you there!