October 2017 Pagosa Springs Real Estate Newsletter
Here in Pagosa, we’re enjoying the colors of fall at their peak with snow on the mountaintops in the background. It makes for some beautiful views around town today. The big game animals are beginning to move lower in elevation, and hunting season is about to shift into high gear. It’s time to winterize your home and your vehicles. Pagosa snowbirds are on the move to warmer climates, and the skiers are hoping for an early start to the ski season.
The local economy continues to be strong. The local unemployment rate is at 2.1% according to the Pagosa Springs SUN. The Town and County are doing their best to complete capital improvement projects before winter sets in. The most noticeable improvement is fixing the intersection at Highway 160 and Hot Springs Boulevard. Crews are working on both sides of the bridge to repair the roadway and add sidewalks. This intersection provides the main access to the Post Office, the Hot Springs, three hotels, and the Chamber of Commerce. This project should be completed in early November. The San Juan River overlook deck, which is the 2,400-square-foot facility I spoke about last month, should be completed in mid-November.
Now for what’s happening in the real estate market. Unfortunately, my prediction from earlier this year is becoming reality. In my January newsletter, I suggested that lack of inventory could put a damper on sales. September closed transactions were way down. In August, we sold 114 properties compared to 73 in September. Residential sales dropped from +25% for the year to +19%. Condo sales fell from +58% to +30%. The brightest segment of the market was land sales which were up slightly to +28% for the year. The overall sales numbers fell this month from +28% last month to +23% this month. Pending sales are down as well. We had 151 pending sales last year at this time and only 124 today. These numbers reflect what has happened in the past 60 days. With fewer pending transactions in the hopper, the prognosis for next month may be poor as well. I hope I’m wrong! Normally, this time of year is when the market picks up. Fall is usually when prices are most favorable for buyers. Properties which didn’t sell over the summer are going through price reductions, as many motivated sellers don’t want to hold their property through another winter. If you are a buyer, there is great value in the market right now. Hopefully, the market picks up for everyone.
I spoke to several of my colleagues asking why they thought we have had a decline over the last 60 days. This is what I heard: first, there is a lack of affordable inventory. Second, the inventory out there is not desirable enough for people to pull the trigger. Finally, the hurricane season hit Texas and Florida very hard. We have close ties to this part of the world, and many potential buyers have been unable to complete transactions due to hardship back home.
On the bright side, interest rates are still historically low. A 30-year fixed mortgage is at 4% and a 15-year fixed is at 3.375%. The local builders are very busy. We’ve had 122 permits issued for new home construction this year, compared to 92 at this time last year. Many of these projects are spec houses, which should help with the inventory numbers. Local building and labor costs continue to rise. Buying a home today should save you money compared to waiting until next year.
So long for now, and enjoy the fall colors!