April 2012 Real Estate Newsletter
The best time to buy a home in Pagosa this year will be the next 90 days. Spring always brings a rush of fresh inventory, so your selection is as good now as it will be all year. The local inventory typically peaks around June 1st. The summer brings a rush of visitors, and that means more prospective buyers. If a seller is going to cut you a deal this year, it will be within the next 90 days. If you wait too long you will just be getting the leftovers that are less desirable or overpriced.
If you are in the market for a new home in Pagosa and you’ve been procrastinating, I’ve got some bad news. The screaming deals are getting harder to come by. Recently I listed a bank-owned property, and the bidding was so competitive that the property ended up selling for $20,000 above the asking price. Another repo listed in town received 10 offers in its first week on the market. If you’re holding out waiting for a screaming deal, the train is leaving the station.
The good news is that there are still plenty of good values out there. Most homes are still selling for 30% less than they were at the peak. You can still get a great home in Pagosa for a very reasonable price, especially compared with other Colorado mountain towns. But if you’ve been waiting to pull the trigger for the “deal of a lifetime,” do not wait much longer.
The inventory of bank repos is depleting, and the overall inventory numbers are shrinking when compared with years past. Interest rates have begun to rise slightly, and although they are still at historic lows, I think they can only go up for the foreseeable future without some kind of disaster to keep them low. After all, you can’t expect rates to stay at 50-year lows forever!
My office has been abuzz with activity and paperwork. The amount of activity I’m seeing is unusual for this early in the year. People know the clock is running out, and they are shopping hard. When good deals hit the market, they go away very quickly, often with multiple offers on the table.
It also seems the clock has run out for buyers making lowball offers. This is a strategy that many people like to try, but it just doesn’t work out. Sellers see all this new activity just like I do, and they are starting to take a stand. If you make a lowball offer, the seller isn’t going to roll over, they’re going to get mad. And you will end up paying more than if you’d just made a reasonable offer in the first place. If the seller is a bank, they won’t even bother to counter. They’ll just reject the offer outright.
Building activity has picked up significantly in the first quarter of 2012. There have been nine residential single family building permits pulled already this year. Last year, there was only one permit pulled in the first three months of the year. It’s hard to say how much of this increase is due to improving market conditions and how much is due to the unseasonably warm and dry weather we’ve been enjoying this year.
Speaking of early Spring, the weather was incredibly warm this March. We saw many days with temperatures in the 60s and a few days in the 70s, which is record setting warmth for this time of year. Snow pack is currently at 51% of average. This kind of weather is great for golfers, but lousy for skiers.
On a personal note, I’m headed off to visit my daughter, Heather, and her husband, John, who is stationed at Fort Bragg in North Carolina. My wife, Laurie, is a teacher, and this is our big Spring Break trip. If you need anything real estate related, I’ll be checking in with the office regularly while I’m gone.