The changes from last year were significant, though not unexpected given the state of the economy both nationally and locally. For the first half of 2009 there were 106 closings which included all property classes within Archuleta County, representing total sales of $18.7 million. During the first six months of last year a total of 179 property sales were recorded. These sales accounted for total volume of $47.6 million. The number of sales for the first half of 2009 declined by 41% as compared to the first half of 2008 while total sales volume declined by 61%.
Looking at the changes the economy has produced next door in La Plata County, (Durango), their figures also reveal substantial declines in the number of real estate closings and total sales volume. Unit volume declined 37% while total sales volume declined 40% as compared to their results for the first six months of 2008.

SINGLE FAMILY HOMES**

There were 65 single family homes sold in Archuleta County for total volume of $14.2 million for the first half of 2009. This compares to 112 closings totaling $36.2 million for the first half of 2008, representing declines of 42% and 61% respectively.

The number of homes on the market is up from last year with 529 single family homes presently listed for sale in the MLS. For all of last year there were a total of 237 single family homes sold with volume totaling $79.4 million. The current level of inventory represents slightly more than a two- year supply of homes based on the absorption rate for 2008.

During the first six months of 2009 there were 40 sales recorded within the land category for total volume of $3.48 million. For the six months of 2008 there were 58 closed sales, for total volume of $6.57 million. As of June 30, 2009 there were a total of 1,122 active listings of land. For all of 2008 there were 128 land sales recorded for total volume of $16.4 million.

Another significant change we are observing is the increased number of properties that have come on the market later in the season. Typically a majority of owners list their properties during April and May, ahead of print advertising deadlines for some of the summer real estate guides. This season our office has been fielding many more calls from owners during June and into July. We are finding from owners there are several reasons for this. One is simply the condition of the financial markets and the economy in general. Some owners have adjusted their financial priorities and decided they no longer need a second home or land here in our area. For other owners the cost of carrying their property here in Pagosa Springs has increased ahead of their discretionary income. Some of this increase in reflected in the Notice of Valuation from the County Assessor’s Office. Because of the timing of the valuation period, figures have in many instances gone up quite substantially, at a time when values have actually declined or stayed level. Much of this is due to the timing of the sales data the county must use, as mandated by state statute. For some owners the increased financial burden of more property taxes during a down economy has created the motivation to sell. While we fully expect the next real property tax valuation period to reflect the current down market, we are hopeful property taxes will go down. All governmental agencies are struggling for more revenue sources while they increase efforts to carefully control expenses. We are impressed with the positive changes that have taken place within Archuleta County and the Town of Pagosa Springs government during the last year, and look forward to more improvements during the remainder of 2009 and into 2010.

New construction starts remain slow in Pagosa Springs as it is across most areas of the country. The number of building permits issued for new home construction is at the lowest level we have seen during the last ten years. Anyone wanting to build a new home or cabin in our area will likely have plenty of builders and subcontractors to choose from. Lumber prices are down and the planning and permitting process is less costly and moves forward much quicker here than a year or two ago. For folks that were planning to build this year or next, we suggest if they have the resources set aside they should move forward and take advantage of current market conditions. Local banks have plenty of money available provided the borrowers and property meet their revised lending guidelines. Generally speaking, with good FICO credit scores, verifiable income and adequate cash for a 20% down payment there are a good number of lenders looking for your business. If you have any questions or concerns about available financing, please give me a call. We can provide you with good lender contacts that we have confidence in. We have seen an increase in buyer inquiries, previews and purchasing. Yes, the buyers we are working with are more cautious, they are shopping harder for the best values, but they are buying.

What direction are things heading out in front of us?

None of us has the crystal ball to predict the future. Certainly there are challenges within our economy, locally, nationally and globally. It seems likely the current level of government borrowing will result in future inflation pressures which may improve demand for tangible assets such as real estate. Certainly our community like most will experience some challenges in terms of the economy in the times ahead. We have a growing number of diverse stakeholders that are becoming more involved in guiding the direction the community grows in the years ahead. That is a good thing.

Good Market Conditions for Buyers

For those looking to acquire a home or land here for use and enjoyment, conditions are quite buyer-friendly. There are plenty of homes to choose from and an abundance of land options to consider. The Pagosa Springs area has not experienced the kind of massive reductions in home values that markets such as Phoenix and Las Vegas have seen. Our community was never saturated with excess new home inventory from large production builders that got way ahead of the market. Many of the buyers in our area during the last five years used little if any mortgage debt to acquire their properties. Also, we have historically had a high number of second homeowners from communities in Texas that have remained relatively stable during this economic downturn. We do expect there to continue to be a higher than normal number of foreclosure properties in the market and some of these will represent good buying opportunities for prudent purchasers that work with a knowledgeable real estate professional. We think the days of the quick flip for a big profit in housing are gone. Given all our area has to offer in terms of a beautiful, safe and friendly small mountain community, for many folks, it makes good sense to own and enjoy property in Pagosa Springs. How can a value be placed on the wonderful experiences and memories created here in the spectacular San Juan Mountains of Southwest Colorado?

Mike Heraty is the Managing Broker and Owner with his wife Lauri of Pagosa Source Real Estate Advisors. He has more than 35 years of diverse real estate industry experience including 15 years in Pagosa Springs. He is Pagosa’s only Certified Real Estate Brokerage Manager, his other professional designations include: Certified Residential Specialist, Accredited Buyer Representative, Senior Real Estate Specialist, Certified Sellers Representative, Master of Real Estate and Transnational Referral Certification. Mike has served as President of the Pagosa Springs Association of Realtors and three terms as a Vice President of the Colorado Association of Realtors. Mike can be reached at 970 264-7000.