Pagosa Springs Real Estate Newsletter, January 2012
I hope everyone had a good holiday season. Our family was all together – I had a great time! The weather was beautiful, especially if you don’t like cold and snow. I’m sure there are some skiers who would disagree with me, but Wolf Creek still has twice as much snow as most other ski areas. Of course, every time we have a few weeks of solid sunshine, water issues start to become a topic of conversation. Currently, snow pack is about 69% of average, but with three more months of winter to go, it is very early.
A meeting of the Town Council on January 3rd confirmed rumors that had been flying around for days: Wal-Mart is coming to town. Wal-Mart has a commercial property under contract located near the corner of Highway 160 and Alpha Drive, across the highway from the Pagosa Lodge. At the meeting, Wal-Mart said they plan to build a 93,000 square foot store with full grocery. (The Durango Wal-Mart is 150,000 square feet.) No dates or time lines have been set, and some type of public forum is supposed to happen at a later date. That’s all we know for now, but I’ll keep you posted as we learn more.
Let’s turn to real estate and look back at 2011 to see what happened. This month I’m including expanded statistics stretching all the way back to 2004. It’s a wealth of data, so I’ll just hit the high points here. Home sales were up 36% compared to 2010. Condo sales were up 54% and land sales were flat. Commercial sales rose 30%, and when combined all together, overall sales were up 27%. Residential inventory is down significantly, but vacant land inventory has ticked up. Bank repos comprised one-third of residential sales for the year, though they represent only 9% of the inventory.
Home prices fell in 2011. It’s difficult to say exactly how much, but I can make a reasonable estimate. You can’t just look at average closing prices, as this doesn’t account for the type and quality of homes sold. If you sell a bunch of mobile homes one year and a bunch of executive homes the next, the average price will rise, but this doesn’t mean that your house is necessarily worth any more than it was before. Instead, I look at a very specific size of home located on a specific kind of lot and track the value over the years. In this case, I have chosen a three-bed, two-bath home with a two-car garage. It must be stick built, between 1400 and 1700 square feet, and located in Pagosa Lakes. This is how the median value has moved over the years:
As you can see, prices have fallen to a level not seen since at least 2004. (That’s as far back as our computer system goes!) Despite the falling prices, there is reason to hope for a turnaround. Repos are by far the biggest factor driving prices lower, and repo inventory is falling. The overall number of repos is on the decline, and the mix of properties seems to be shifting more toward vacant land and commercial property.
The New Year always gives me a chance to look back, and when I look back at 2011, I feel lucky. I had the best year for business that I have had in the past several years. The bottom line is I have to work smarter in tough times. It depends strongly on having a good support staff, a great boss, and a good working relationship with my fellow Realtors (who, by the way, are my best customers.) I depend on them heavily to help me sell my listings.
I am optimistic for 2012. The economy, both locally and around the country, is improving, although slower than we’d like. Though there are still quite a few repos in the pipeline, I hope that most of them will be gone by the end of 2012. Then prices may start to rebound. The window of opportunity to buy as an investment will quickly come to a close. If you’re still on the fence, time is of the essence. I hope you and your family have a great New Year!