Pagosa Springs, CO

With only one month of the new year under our belts and with this being the slowest time of year for Pagosa real estate, there is not much of a story to tell. We are up by a couple of transactions over last year, but the sample is so small that it’s hard to tell whether the numbers mean anything at this point or not. However, I can say this; we have an unusually large number of properties under contract for this time of year. At last count, there were 43 pending transactions. If even two-thirds of those transactions actually close, we will soon be well above last year’s to-date totals. The amount of activity in the pipeline is encouraging.

Bank repos remain the driving force in the market, and the number of repos on the market is up about 25% from a couple months ago. Not all the sales are bank repos, but the repos are setting the prices, and if you want to sell your property, you have to compete with them. From a buyer’s perspective, this creates an incredible opportunity. I see several screaming deals come across my desk every week. I regularly distribute a list of all the bank-owned properties currently listed around town. To view the current list, click HERE. If you would like to receive this list via e-mail on a regular basis, just give me a call or send me an e-mail, and I’ll add your name to the mailing list.

Here in Pagosa, we were recently blasted with a series of winter storms. In town, we received more than three feet of snow over the course of a couple of days. For all of you out-of-town folks who own homes in Pagosa, you need to have someone check out the snow load on your roof as soon as possible. The weight of the snow and ice dams can both create serious problems. If you need help finding someone to remove the snow and ice, give me a call and I’ll be happy to hook you up with someone trustworthy.

Though the weather causes problems for homeowners, it is a boon to skiers and outdoor enthusiasts of all types. Wolf Creek Ski Area currently has 107 inches of snow at the summit, and they have received 273 inches so far this year. The snowpack in the mountains is currently at 104% of average. If this continues, we’ll be certain to have a green spring and summer this year and a good rafting season.

Well, so much for now. Hopefully you haven’t given up on your New Year’s resolutions. Don’t forget that if you have friends or family looking for a top notch Realtor outside the Pagosa area, I have a list of Realtors known as CRS, or Certified Residential Specialists. These are the top 4% of Realtors nationwide; they are the cream of the crop. I am more than happy to connect you with them.

As always, the latest stats are available on my website, ISellPagosa.com

Regarding the Real Estate Market in Pagosa Springs – which would you like first, the good news or the bad? Being an optimist, I’ll start with the positives. Let’s talk about the glass half full.

We are having a big sale, similar to Black Friday after Thanksgiving. Prices are marked down and there are big deals to be had. I saw several screaming deals happen in 2009, and we will see many more – at least over the next six months. If you are an investor, there is money to be made. If you are a first time home buyer, the government is giving money away to the tune of $8,000 on your next tax return. In my opinion, the housing market will show better returns than the stock market or your neighborhood bank in the near future. If you’re looking for a place to park some money, let me know! Of course, you still have to be careful and very selective because parts of the market are still in decline.

I am providing many of my customers a current spreadsheet on all the bank repos. It shows a lot of detailed information which can be very helpful when shopping for property. I usually update this sheet twice a week. To view the spreadsheet, visit ISellPagosa.com/repos.pdf If you’d like to get this on a regular basis, e-mail me and let me know. One thing to keep in mind is that even though bank repos represent only about a quarter of the sales, the repos are driving the market. Most of the other 75% of sales are priced like bank repos. There are a lot of motivated sellers ready to move on and take advantage of a good deal some place else.

Now for the glass half empty. I’ve just finished my end-of-year stats for 2009. Overall real estate activity is down 80% from the peak in 2005. It is important to keep in mind that 2005 was an abnormal year. National Recreational Properties came into town and bought nearly all the vacant lots, then spent a great deal of money marketing them and reselling them at inflated prices. Likewise, 2009 is probably an abnormal year on the other side of the spectrum. The national real estate crash and ensuing recession have affected our local market, and this year’s statistics are as dismal as I have seen in quite some time.

As sales numbers have fallen, so have prices. Median sale price is down 10% from the peak. Median price per median square foot is down 20% from the peak. Keep in mind that these numbers are influenced by the type of property which sells in a given year. If we sell a lot of mansions one year and a lot of trailers the next, both metrics will go down, even if values remain the same. It would be better to measure the change in value of individual properties from year to year, but this is nearly impossible because each property doesn’t sell every year!

It is my best estimate that actual values have fallen about 25% to 30% for most homes in Pagosa. My estimate is probably skewed toward listing prices rather than sales prices, because listing prices are what I see all day, every day.

The part of the market doing the best is single family homes, especially the lower price ranges. Sales under $300,000 represent 66% of all sales. This is where the action is, and this sector will lead the way out of our Real Estate recession.

Building is almost a non-issue. Why build when you can buy for 25% to 50% less than construction cost? Building permits for new homes have dropped from 230 in ’06 to 39 in ’09.

Regarding our local economy – everyone I talk to is being fairly conservative with their spending habits. Sales tax revenues are down. I think we mirror most of the rest of the country. Ski conditions at Wolf Creek were great for the holiday season. Skier numbers were good, but it wasn’t a banner year. Overall, the holiday season was positive, and we were helped by the timing of Christmas and New Years, which created consecutive three-day weekends.

So what’s next? Your guess is as good as mine. I think it will be another year before we see much of an upturn. However, I think we are close to the bottom. I expect to do more deals this year than last, but I expect far fewer dollars per deal. Consumer confidence is the key to any big upswing, and if you wait until confidence returns, you will have missed your best buying opportunity.

As always, the latest stats are available on my website, ISellPagosa.com

The Riley family had a great Thanksgiving. Laurie and I traveled to Denver to visit family, including our son and our new daughter-in-law. The festivities included seeing Riverdance and watching Carmelo Anthony score 50 points as the Nuggets beat the Knicks! All in all, we had a superb holiday, and I have so very much to be thankful for.

Increasingly, I find myself asking the question, "Now what?" At 61, my priorities are changing. Dreams of cars and toys are being replaced by thoughts about health, retirement, and future grandchildren. Fortunately, I still love my job. The puzzles I am continually trying to solve are how to be more productive and how to better serve my customers. I still enjoy pondering and pursuing these goals, even as my other interests have changed.

The Pagosa real estate market has entered its winter phase. Sales are slowing down, and inventory is coming off the market. Bank repos and distressed properties continue to be the "price-setters." In November, bank repos accounted for 30% of all home sales, though they represent only 5% of all home listings. Fortunately, we are selling the bank repos at about the same pace that they are listed. The number of bank-owned properties on the market has generally remained between 25 and 30. I'm glad to see that the bank repos are not accumulating in our area.

We've recently received a bit of bad financial news from the town and county. Sales tax received in November was down 17% compared to the same month last year. This is mostly due to the continuing decline in the local construction industry. By this time last year, the county had issued 67 house permits. This year, they've issued only 34. County Commissioner John Ranson reports that at the peak of the building boom, construction accounted for $110 million in our community. This year, the county is expecting $12 million.

A few early snow storms allowed Wolf Creek Ski Area to open around Halloween this year. A relatively dry November meant that Wolf Creek was one of the few ski areas in the region open over the Thanksgiving holiday. With 32 inches of snow on the ground, Wolf Creek saw a 36% increase in skiers compared to the holiday weekend last year.

This weekend (Dec. 4-6) is the annual Christmas in Pagosa event. Festivities include a Parade of Stores, a Festival of Trees, and music presented by the Music Boosters, the Community Choir, and the Bar D Wranglers. Friday and Saturday will be "No Sales Tax Days" at 43 local retailers, and Mountain Express will provide free transportation on those days. For more details, visit the Chamber of Commerce.

It seems odd to be talking about Christmas already, but the season is nearly upon us. I'd like to thank all of our troops who are serving overseas during the holidays. Being away from family and friends during this time is difficult, and I am supremely grateful for their sacrifice on our behalf.

Happy Holidays to you and your loved ones!

As always, the latest stats are available on my website, ISellPagosa.com

Go Broncos! This year, the Broncos are 6 and 1, and we are leading the division. According to the “experts,” we were only supposed to win 4 games this year! The sports commentators remind me of the financial gurus. Neither seems to know what they are talking about. I believe I’m doing better thinking on my own and not worrying about the negative naysayers.

Some good news! Real Estate sales for October were up 18% over the same period last year. There were 39 sales this October versus 33 last October. Year-to-date sales are down 29%, which is a 3% improvement over last month.

I attended our annual Real Estate Convention a couple of weeks ago, which is always fun, especially since it is held at the Broadmoor – a 5-Star facility. The Convention serves several functions, such as networking with other Realtors from around the state. The educational classes are great, and I really enjoy the motivational speakers. Just “getting out of Dodge” for a few days can do a great service by refreshing my mindset.

The most beneficial thing I pulled from this session is what short sales are all about. It is a very complicated and very misunderstood process. Here is the Reader’s Digest analysis:

If you purchased a home in the past 3 years, there is a very good chance you are upside down on your mortgage. You owe more than your home is worth. So, a lot of you who want to sell are asking the bank to take a loss. In order for the bank to consider this, they need to know you cannot make the payments due to a change in your financial situation, a job loss, health issues, etc. To prove this, you need to have a hardship letter. Additionally, the bank will want to see your last two tax returns. Also, you will be required to provide your last two pay stubs for both you and for your spouse. The bottom line is the bank will only consider a short sale if you are destitute.

There are about 80,000 people per month asking for a short sale. In order to get your bank’s attention, you must dot all the I’s and cross all your T’s. The package you send to your bank is typically 60 to 100 pages long, and it must be complete, or it will just sit in a pile on someone’s desk going nowhere. If you decide you are a candidate for a short sale, it is critical that you get both tax and legal advice. If you don’t, you might find you have to pay taxes on the amount “forgiven” by the bank, or you may have to pay the shortfall yourself. This could be devastating.

Only 50% of short sales ever actually happen. The process will probably take 3 to 9 months to complete, and most buyers are not willing to wait. From a buyer’s perspective, bank repos are a much better way to buy. Further complicating a short sale is the fact that many Realtors are hesitant to show or promote a short sale property. Realtors know the headaches and complications that are bound to arise during the long, unpredictable process, and they often don’t want to deal with a “tainted product.”

If you are considering a short sale as either a buyer or a seller, give me a call or email, and I will give you some contacts to help you go through the maze of uncertainty.

We are quickly approaching the Holiday Season. I sincerely wish you and your family a great Thanksgiving. I also want to thank our troops for a job well done.

As always, the latest stats are available on my website, ISellPagosa.com

Fall is here. The colors are getting bright, and mornings are cold. So, when will we get our first major snow? When will the ski area open? Will we have a hard winter or a mild one? In October in Pagosa, these are the questions on everyone’s minds.

After two tough winters, I’m hoping for an easy one for a change. I do hope the ski area opens early. Halloween would be ideal. In a perfect world, we would have good early snow but not too much. When this happens, folks from Durango and Northern New Mexico have to come here to ski. Contrary to popular belief, we actually do better economically when we don’t get too much snow. Wolf Creek Pass stays open, and we are the best, and sometimes the only game around.

I have been checking around town to see how our local merchants have been doing in this tough economy. The answer I am hearing, even though not as good as a couple of years ago, is that we are doing better than most people expected. Lodger’s Tax is up 9% compared to 2008. Sales tax is down only 2.2%. The county seems to be getting its act together after financial problems a couple of years ago. Foot traffic at the local Chamber of Commerce Visitor’s Center is up 15% compared to last year. The Town Tourism Committee recently ran out of their seasonal visitor’s guide, and they had to print an additional 20,000 copies!

As far as real estate goes, we are seeing improvement lately, especially in home and condo sales. At the end of July, real estate sales were down 37% compared to the same period in 2008. At the end of August, we were down 35%, and at the end of September, we were down 32%. So, we are still behind the 2008 sales pace, but over the last couple months, we have been gaining ground.

It’s still a buyer’s market, but we are starting to see a reduction in inventory. Quite often, Fall is the best time to buy. Sellers are worried about holding the property through another winter, and they are more motivated to make a deal.

Two other reasons to buy now are very low interest rates and the $8000 tax credit for first-time homebuyers. Many buyers do not realize that they qualify for this credit, so I’ll briefly go over the qualifications. If you have not owned your primary residence in the past 3 years, you are considered a “first-time buyer,” and you qualify for the $8000 tax credit. The home must remain your primary residence for 3 years in order to keep the $8000.

I feel very fortunate this year. Even with overall sales down 32%, my sales are up, and our office as a whole is doing very well. Over 10% of all transactions this year have come across my desk. I owe a lot of my success to my staff: Jody Moon is my full-time administrative assistant, and Jarrett Chaney is my computer specialist. Along with Jody and Jarrett, who work directly for me, Barb Taylor and Beth Tollefsen work for the whole office and are critical to our success. Finally, having a good boss makes it fun to come to work, and I have one of the best in the world – Jann Pitcher.

I hope everything is going well for you and your family. Keep thinking positive. If you have any real estate questions about Pagosa or anywhere else in the world, please contact me. If I don’t have the answer, I will find someone who does.

As always, the latest stats are available on my website, ISellPagosa.com