PAGOSA REAL ESTATE MARKET CONTINUES TO IMPROVE
Dallas Divide Between Ridgeway and Telluride
The numbers are in through the third quarter of 2013 and I am happy to report things are continuing to improve across nearly all categories. Market Sales Volume for all types of real estate was up year to date by 22% over 2012. The Median Sales Price increased by 14% while the average Sales Price was up by 12% over 2012 Year to Date.
SINGLE FAMILY HOMES
Total Single Family Home Sales Volume increased by 29% from 2012 with the Average Single Family Home Selling Price up by 16% to $321,719 and the Median Selling Price moved up by 28% to $255,000. The improvements in the Single Family Residential market are significant and reflect several changes underway within the local market. First, the impact on pricing from Distress Sales has diminished considerably. The percentage of sales comprised of foreclosures has dropped as has the inflow of new foreclosure filings. For all of last year there were a total of 263 Single Family Home Sales and we are on track to exceed that figure by year-end, based on the Year to Date figures. Looking at the month of September this year as compared to last year, we had a 17% increase in the number of closings and a 15% increase in the dollar volume closed for the month; again, signs our momentum is slowly improving.
The upper end of the Residential Market continues to struggle for footing. A recent sale off McManus Road in Hinsdale County revealed the sizeable price reduction sometimes necessary to consummate a sale within the high end residential property market in our area. Originally the home and land was listed for sale at $6,000,000. Subsequently the price was reduced to $5,400,000, then dropped down to $4,900,000. Next it was lowered to $3,900,000, then to $2,900,000 and it finally sold for $2,300,000 after being on the market over three years. One of the toughest challenges with the high end of our residential market is that we often find folks willing and able to invest over $1 million in a home prefer to build exactly what they want. In order to compromise their design or dream it typically requires a very steep discount from the Seller.
CONDOS AND TOWNHOMES
The results thus far this year are not as favorable for the Condo/Townhome Market Segment. The total number of sales closed is down by 17%, dollar volume is down 13% while the average Sales Price was up by 5% and the Median Sales Price increased by 6% to $135,000. Here we saw lower volume, but improving prices, which is good for our Sellers.
LAND MARKET
The market for land has improved, at least by Total Dollar Volume, which was up 7% from last year, and in the number of closings, which was up 14%. The Average Sales Price was down 6% and the Median Sales Price was down 24% from 2012. These figures indicate some of our Sellers are adjusting to the weaker demand by dropping their prices to make a sale.
Sales of 35-acre tracts did not change much from the prior year, with 12 closings Year to Date 2013 as compared to 13 for 2012. However, Total Dollar Volume shot up by 42%, with the Average Sales Price and Median Sales Price up by 54% and 60% respectively. Though inventory in this subcategory remains at high levels, these results would indicate some improvement in values for Owners and Sellers.
The 3-10 Acre Building Sites showed mixed results, Year to Date, with 25 closings as compared to 26 last year and a reduction of 8% in Total Dollar Volume. The Average Sales Price declined by 5% though the Median Sales Price increased by 21%.
Our last land sub-category, Resort Building Lots showed significant improvements over 2012. We had a total of 84 Closed Sales, with Total Dollar Volume of $2.4 million, an increase of 48% over the prior year. The Average Sales Price was up by 16% while the Median Sales Price increased by 83%. We remain significantly over-supplied in the land category. Though there are slight improvements in the number of new home construction permits, new home demand remains weak and demand for land continues to be limited. Until existing home prices increase closer to the cost of new construction we expect the land market to remain soft.
COMMERCIAL MARKET
Improvements here were noteworthy as well. There were 13 commercial property closings reported Year to Date, as compared to only 6 for the same period of 2012. The Total Dollar Volume was $2.9 million, an increase of 190% over the prior year. The Average Sales Price was up by 34% while the Median Sales Price increased by 56%. I expect this property category to continue to improve as the overall economy inches upward. At the point in time that Wal-Mart begins construction on the new store west of town I would expect an increased focus on commercial property transactions. With the Tractor Supply Store and Wal-Mart likely coming on line sometime in 2014 it is likely other national brands will enter the Pagosa market. Take a look at the stores that have located near Wal-Mart in Durango and Alamosa for an idea of what we may soon see in our community.
WRAP UP
In spite of some structural challenges within the political and economic framework of the Pagosa Springs area, our real estate market is continuing to move forward. The above stats confirm improvements of a major component of our local economy. My recent meeting with fellow partners of the Rocky Mountain Commercial Brokers in Breckenridge gave me some encouragement. Each of the eleven other areas represented at our meeting reported significantly improving market metrics. Prices are moving up, available inventory in declining and new projects are coming off the drawing board. Yes, each market within the Rockies in somewhat unique, but we also share some similarities. Historically the actions within other mountain communities have tended to “spill-over” into Pagosa and we have at times been pulled long by the strength of the markets in other areas. I sense that will again be the case in this current recovery.
We have some major changes underway in our community marketing efforts with the Visitors Center management being transitioned from the Chamber of Commerce over to the Town Tourism Committee. That entity has been the recipient and dispenser of the Lodger’s Tax Revenue and they have announced their intent of creating more effective marketing for our area and driving more tourism dollars our way. We have elections coming in November and next spring which could bring changes to our Board of County Commissioners as well as to our Pagosa Area Water and Sanitation District. We are searching for a new County Administrator as well as a new County Planner. As always, it will be an interesting ride into the
future, perhaps with a few bumps along the way.
If you would like a copy of Mike’s Market Metrics with more details on the Pagosa Third Quarter Real Estate Market Summary, email me at: MikeHeraty@frontier.net or give me a call at 970 264-7000.
