The Pagosa Springs inventory figures continue to show a significant oversupply in all categories, with land being the most out of balance. We are expecting more properties to come onto the market during the next 60 days as we approach the summer selling season. We reviewed the year to date figures for single family homes as well as land. As of this date there are 973 land listings on the market and 388 single family homes. During the last 12 months, a total of 163 homes were sold, and 122 land sales closed. If the absorption rates for the last 12 months hold, we now have nearly a 2.5 year supply of unsold homes and about a 7.8 year supply of unsold land.
Our 1st Quarter Summary Charts are shown below. The number of land closings in Pagosa Springs is down 30% from last year while the total dollar volume is down by 44%. Looking at the single family home closings, (the figures exclude condos, townhomes and manufactured homes) we see that the number of closings is down by 32% while the total dollar volume is down by 57%. As discouraging as these numbers appear, Pagosa Springs is still not in as bad a shape as other communities where overbuilding and speculation caused significantly more damage to the market. We have also not experienced the high level of foreclosures other areas have seen and as a result we have not seen values driven down, instead, the number of days on the market has increased as well as the amount of listing inventory. All these figures are bad news for Sellers, but good news for Buyers that have a down payment and good credit. There are a lot of properties to choose from and there is plenty of mortgage money available. These figures also make it apparent that serious Sellers will have to price their properties very aggressively in order to be attractive to the limited number of Buyers that are moving forward under the current market conditions.
After reviewing the market data as well as many articles and analysis of the conditions within the housing industry, we are challenged to make a projection of how many homes will sell within our area in the year ahead. Our best guess is that we will do well to equal the number of homes that were sold last year. Achieving that level assumes that something in the federal stimulus package will help to jump start the housing market. We know we still have lots of folks that would like to buy a place here in Pagosa Springs, but they can’t, until they sell something in another market. Unfortunately, a lot of those folks are in markets that have yet to reach bottom—Phoenix, California and South Florida. Still, rather than wait until our market bottom is clearly defined, we think it is wiser to make a selection while there are many choices and few competing buyers. So long as you are going to hold your property for a minimum of 3-5 years, we don’t see the potential for an additional downward adjustment of 5-10% as being especially frightening. As I have stated in earlier articles, if you are looking to buy a property to flip in this market, keep your money in your pocket. If you are looking to buy so that you can begin to enjoy the natural beauty and lifestyle our area offers, the time is right. Call us for details on any part of our real estate market. Review the charts we have provided, and let us know if you have any questions or comments. Thanks for reading our articles!
Mike Heraty ABR, CRB, CRS, CSR, GRI, e-PRO, MRE, SRES