Wal-Mart is still going through the planning process. We will know more about it later in the summer. If everything goes the way Wal-Mart is hoping, we will have a store open sometime next Fall.

I recently attended a meeting of the Town Tourism Committee which discussed one of our local resources, Reservoir Hill. Reservoir Hill is a wooded area very near downtown which is owned by the city and operated as a park. Right now, there are hiking and biking trails and a disc golf course. The major events held on the hill are the two music festivals held around Memorial Day and Labor day every year. The Town Tourism Committee is considering adding some theme park-style attractions to Reservoir Hill, including a zipline, an alpine coaster, a tethered hot air balloon, an observation tower, an amphitheater, and a restaurant or snack stand. As is usual in a small town, some people favor this plan and some people oppose it. It is still in the early stages, so we’ll have to wait and see if anything comes of it.

The local real estate market is doing reasonably well. This time of year is normally kind of slow. I was watching 9 News out of Denver this morning, and the market there is quite strong. The Arizona market is also picking up. These are good signs for us. One of the problems with buyers in the recent past was they could not sell the home they already had, keeping them from buying here.

I negotiated four contracts this past week ranging from $235,000 to $340,000 – one for land and three for homes. Home inventory is down 21% compared to last year, making selection a little sparse, especially in the lower price ranges. Interest rates are still great, ranging from 3.25% for a 15-year fixed to 4.00% for a 30-year fixed. Local building activity has increased. Last year at this time, the county had issued six single-family building permits. This year they have issued 14.

One of the more promising signs right now is that the number of pending sales has risen dramatically compared to this time last year. In this chart, you can see how this year stacks up with last year:

As we continue to see “green shoots” both in the local market and in the local environment, I am very excited about the coming summer.

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.

We will soon start to see Spring Break skiers coming to town from Texas and Oklahoma. The peak week will be March 10th to 17th. March is the busiest month of the winter for us, and it is a critical time for our local economy.

The Spring Break for schools in Pagosa starts at the end of March. My wife is a teacher, and we are headed to North Carolina for a week to visit my daughter, Heather, and her husband, John, who is training to go into the Green Berets at Fort Bragg.

It is my understanding Walmart is having a show-and-tell March 8th from 4:00 to 6:00 p.m. to discuss their plans. It is open to the public. I am told that Walmart has not yet purchased the property in question, but they have it under contract contingent on getting approved by the Town of Pagosa Springs. They still need to submit plans and jump through the necessary hoops with the Planning Department. This may take three or four months to complete. Most likely, if Walmart comes to town, it would not open till next year. Even though the community as a whole is divided on this issue, the voters that live within the town limits voted in favor of a big-box by a 2-to-1 margin two years ago.

As far as real estate goes, February was not as robust as January. We are still up 40% as a whole, but home sales are up 12% vs. 30% for January. The biggest positive again is the reduction of the number of repos available. There are still quite a few in the pipeline, but they are moving fast. If you would like to receive my repo sheets updated on a weekly basis, email me and ask for it.

When you look at this month’s stats, you’ll notice some pretty wild changes in median sold prices. The median price for vacant land is up 99% for example. I’d like to note that it is still very early in the year, and this number is a result of the type of land sold – not a price increase for individual pieces of land. Bigger pieces of land have sold so far this year, and that moves the median price upward.

Mortgage rates with zero points are still great at 4% for a 30-year, 3.875% for a 20-year, and 3.375% for a 15-year. According to this morning’s Durango Herald, this is the best time since 1971 for home affordability.

One other item to report is I have several new listings that will be hitting the market soon. Among them are several new homes and four new ranches. One example is 169 Tiffany, a bank repo which was just listed today. It’s a 4-bedroom, 2.5-bath with 2576 square feet on 4.7 acres. This beautiful horse property has incredible mountain views. It is nicely landscaped with several outbuildings and a storage shed. At $194,900, it may not last long. There are several more values coming down the pipe, so keep an eye on my website, ISellPagosa.com

Even though slower than everyone would like, the economy is getting better. The jobs situation seems to be improving, as unemployment has fallen to 8.3%. The stock market has started off strong. The local real estate market is also doing better. Home sales are up 30%, vacant land sales are up 450%, and overall sales are up 86% compared to the same time last year. The other big surprise is the reduction in inventory. Home inventory is down 19% from last year and even further from 2010. We now have 314 homes on the market versus 431 two years ago. Condo inventory is down to 59 versus 78 a year ago and 107 in 2010. The repo inventory is also declining. I also checked the pending sales, and there are 49 total properties in the hopper. These are all good signs that we are on our way to recovery. Of course, this is just one month of numbers. It doesn’t take much to distort the percentages because of the small sample size.

One factor driving land sales is pricing. There are some bargain-basement deals out there, and people are starting to take advantage of them in order to purchase the lot next door to their house or preserve their mountain views. In 2006 at the peak of the market, the median quarter-acre lot in Pagosa Lakes sold for $50,000. In 2011, it was $12,500. In 2006, five-acre lots with central water went for $160,000. Today it’s $60,000. And finally, a 35-acre parcel was worth $239,000 at the peak. Today the median is $137,000. It could be that low prices are starting to spur an upswing in vacant land sales, but we only have one month of data, so right now it’s hard to tell.

Interest rates are still below 4% for a 30-year fixed. Consumer confidence is a little better. I know I’m feeling better.

Now for local politics. Walmart is what everyone is talking about. I was on the Big Box committee a couple of years ago. I spent about 12 months going to meetings. It seems like the community is pretty equally divided. I can take it or leave it.

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!

It’s beginning to snow lightly now. This is good for the ski area, which has been open since early October – very good for the local economy. I called around to most of the hotels as well as the Chamber to see how business was over the holiday. Most did very well. Christmas in Pagosa starts this weekend, which is an event that encourages everyone to shop locally. There are other holiday festivities going on as well. You can visit PagosaChamber.com for details.

As far as the real estate market goes, business continues to be good with home sales up 37% compared to last year, and overall sales up 27%. Home inventory is down 20%. Repo numbers are also going down. As of December 2nd, there are 45 repossessed homes on the market, and 15 of them are under contract. This means there are only 30 residential repos available today. Repo homes are about 10% of the current inventory. The most surprising number of all the stats this month is this: out of 31 homes under contract right now, 15 are bank repos. The good news is the sooner they go away, the more quickly we will see a rebound in prices. There are still a bunch of repos coming down the pipeline, but they are being gobbled up fast. If you are a buyer sitting on the sidelines waiting for that great deal, you better hurry, especially if you want to take advantage of the unbelievably low interest rates hovering around 4%!

I send out a spreadsheet once a week via email showing all the repo properties in the county. If you would like to receive the list, just let me know. You can also see these properties on my website, ISellPagosa.com. Another great feature I have on the website is the ability to see all the newly-listed properties. You get access to all the fresh meat as it comes on the market.

So long for now! I hope you and your family have a great Holiday. It’s good to hear a lot of our troops will be home soon. Now if Congress would give us a Christmas present called “cooperation,” that would be great!

Also, the real estate market continues to improve. As you will see in the stats, overall sales are up 31% over last year. Personally, I am having a very good fourth quarter, and I expect to close out the year on a high note. I have a couple of deals in the works involving properties in the million-dollar range.

One concerning sign is that repos have ticked up slightly over the last week or so, although we are not any higher than we were back in September, and we are still well below the levels seen during the spring. You can see the last several months of data in this chart:

Let’s hope that this little uptick is just a bump and not a trend! I’ve also compiled some statistics about the repos and their place in our market. You can see how a relatively small percentage of the active listings represents a relatively large percentage of the sales:

In closing, I came up with a way to solve all the problems in Washington. I’ll admit up front that I didn’t come up with it on my own. I stole it from a TV show I watch called The Biggest Loser. So here it is, a simple solution to all the partisan gridlock: Rock, Paper, Scissors! There are loads of situations where we could use this new strategy:

Should we hire more teachers? Rock, Paper, Scissors!
Should we switch to natural gas for our energy needs? Rock, Paper, Scissors!
Should we have more gun control? Rock, Paper, Scissors!
Should we spend more money to fix our roads and bridges? Rock, Paper, Scissors!
Should we raise taxes on the top 1%? Rock, Paper, Scissors!
Should we have a flat tax? Rock, Paper, Scissors!
Should we raise the minimum age for Social Security and Medicare? Rock, Paper, Scissors!
Should we do away with Obamacare? Rock, Paper, Scissors!
Should we fix our schools? Rock, Paper, Scissors!
Should we do business with Cuba? Rock, Paper, Scissors!
Should we lower corporate taxes? Rock, Paper, Scissors!
Should we crack down on immigration? Rock, Paper, Scissors!

Finally, should we work together in Washington for a better America, or should we do what is most likely to get ourselves re-elected? Rock, Paper, Scissors!

I was thinking about sending this list to David Letterman for his Top 10 List. This would probably get a good laugh, but what a sad story.

I hope everyone has a great Thanksgiving!

On the real estate front, the number of residential bank repos continues to decline. Looking back to May of this year, 52% of all residential sales were bank repos. In September, only 29% were repos. As I write this, there are only 44 residential bank repos listed in all of Archuleta County, and 10 of them are currently under contract.

The median closing price on a home in Pagosa has fallen to $175,000. This is bad news for sellers, but it is great news for potential buyers. This is a level not seen since at least 2004, which is as far back as our current record-keeping system will go. Additionally, the number of home sales is at a 5-year high.

Another piece of good news for buyers is that mortgage rates continue to reach new historical lows. As of this writing, the national average for a 30-year mortgage was 4.00%, and the average for a 15-year was 3.37%. These are tremendous rates, and if you are in a position to take advantage of them, I encourage you to do so.

Speaking of banks, there has been a lot of news recently about new fees at the big banks for everything from debit card use to bounced checks. I talked to a local banker about all of it. The way he explained it, there were a lot of new rules and regulations that came down as part of the Dodd-Frank financial reform bill. The new rules are meant to protect the consumer and the financial system as a whole. Whether they are going to be effective is a political issue that I am not going to take a position on here.

In any case, the new rules have added costs, in both time and money, to the way that banks do business. The new rules also limit how much banks can charge for certain services and fees. So the banks now have higher expenses and lower revenue. We should not be surprised that the banks are trying to make up the gap with new fees on checking and debit cards. You can pay now, or you can pay later, but the banks are going to get paid eventually, one way or the other.

Here are two tremendous values that have recently come across my desk. The first is 35 acres for the unbelievable price of $59,900. You get river access and National Forest access to sweeten the deal. This is the lowest price for 35 acres in our market.

The second is a brand new listing that is just coming in as I write this. It is a 2-bedroom cabin of about 1100 square feet on acreage that seems to have a good well. The price will be $104,500. The listing is so new, I don’t have an MLS number or many details yet. If you are interested, please give me a call at 970-946-3856 or e-mail me at LeeRiley@ISellPagosa.com.

I want to apologize to anyone who has had recent technical issues with my website or my email address. The explanation is dull, so I’ll just summarize by saying that we have just switched to some new companies, and the change has had unfortunate side-effects. My office is working diligently to chase down all the loose ends, and we hope to be back to normal soon. Thank you for your patience as we wrestle with our technology.

Finally, I want to wish a hearty “Good Luck!” to all the hunters who are coming to town for elk and deer season. The first elk season opens October 15. Everyone is looking forward to the excitement and activity that hunting season always brings, and the shops and restaurants are looking forward to some increased traffic.

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!