I hope your holidays were as much fun as ours were. It was our turn to have the kids and grandkids come up from Denver to celebrate Christmas, and let’s not forget the three dogs to keep Chaco happy. Snowmobiling, sledding, snowmen, and snow forts were all part of the festivities. It snowed on Christmas Eve and Christmas Day, which made for a perfect backdrop for a family picture.
The town was very busy, which was to be expected. The ski area had lots of snow with a 77” base and 193” total so far this season. Our snowpack for the San Juan basin is at 120% of normal. This is a good start for a green spring.
2019 saw plenty of notable happenings around town. There was the creation of the Urban Renewal Authority, which will allow the Town to consider a major development around the downtown Hot Springs. There was the controversial start of construction on the new jail at Harman Park. The new Natural Grocers opened in the old Hometown Market building. Tax revenues were up around 30% through October. I asked a couple of local officials about this, and they believe it is due to a new law allowing us to collect local sales tax on internet sales. Last but not least, we had a gorgeous summer with lots of water in our streams and plenty of green grass. No significant forest fires this year!
Now for the latest real estate news. We ended the year down 8% in terms of raw sales, leaving us about even with 2016 sales. Home sales were more or less flat, so the decrease comes from falling condo, vacant land, and commercial sales. The largest decreases came in the higher-acreage vacant land categories. Vacant land sales between 6 and 35 acres were down 44% with other large properties showing similar declines.
Inventory numbers are mostly flat overall with an ongoing shift toward higher priced property. As of this writing, there are 0 homes or condos available under $100,000, and only 12 available under $200,000.
Prices are rising, but calculating the rate of increase is a tricky thing to do. This is because the market-wide “average price” can be affected by a change in the types of properties being sold. If we sell a lot of 1-bedroom cabins one year and a lot of riverfront mansions the next year, the “average price” will go up, but the price for any given house may not.
To counteract this, we define a specific type of home and track sales which fit only that description. For this example, we’ll take a 3 bedroom, 2 bathroom, 2-car garage home on under 1/2-acre in Pagosa Lakes and call that a “Typical Pagosa Lakes Home.” The median price for a Typical Pagosa Lakes Home in 2018 was $309,000. In 2019 it rose to $345,950, which indicates a 12% increase in a year. If we go back to 2011, at the end of the last real estate collapse, we see an average increase of 9% per year over the last 9 years.
The following charts show price history for condos and vacant land using a similar method:
Interest rates remain very low. A 30-year fixed rate mortgage is currently at 3.75% and a 15-year is at 2.875%. Consumer confidence is high, and the stock market is up. My prediction for 2020 is the real estate market will be relatively flat as far as number of sales. Prices will continue to rise, and interest rates will stay low. The two wild cards out there are trade wars with China and the increase in turmoil in Iraq and Iran. Either of these two overseas issues could have unpredictable consequences in the real estate market, even reaching us here in our picturesque mountain town.
Happy New Year to all of you, and I wish you the best of luck in your 2020 endeavors!
GRI, CRS
2011 & 2014 Realtor of the Year
Phone (970) 731-4065
Fax (970) 731-4068
Cell (970) 946-3856
Email: [email protected]
