While much of the real estate news reported by the major networks has focused on the improving housing markets within many of the major cities, Pagosa Springs has rather quietly finally begun to move forward. It seemed for a time we were destined to remain in the ditch we entered at the beginning of the housing market meltdown. The real estate data, which I will go into in my next article, is showing measurable improvements.
Historically, Pagosa Springs has entered the downturns a bit later than many areas and our momentum climbing into the recovery cycle typically lagged behind other markets. Often over the last 18 years I have observed how the Durango market is trending as a window to what lies ahead for Pagosa Springs. Similarly, in predicting the future direction and strength of the Durango market I include a look at the general economic measures of communities that historically provided a large percentage of second home buyers and vacationers to the area, such as Phoenix.
The Greater Phoenix area has been in the news fairly regularly over the last 18 months due to the ongoing recovery of its housing market and the rising home valuations in the area. Employment and income figures are improving in that area as well, though slowly. These are key components that move consumer confidence, an vitally important element in the vacation home market. As housing values continue to improve we would expect to see an increase in the number of second home Buyers returning from the Phoenix area. Arizona continues to attract businesses that are leaving California in favor of the better business and tax climate in the desert state. Presently, USAir offers two non-stop flights daily from Phoenix to Durango, and with a little advanced planning you can often book a round trip airfare for under $275.
In addition to the state of Arizona, our area has always attracted a large number of visitors from Texas. Many of those Texans have become business owners or vacation homeowners in the community. Fortunately, during the recession, most of Texas retained a high level of employment and residential real estate, (which had not hyper-inflated during the Housing Bubble) retained most of its value. A number of Texans visitors that had withdrawn from the buyer pool during 2005-2008 began to return in 2012 and 2013. With the high energy prices over the last several years and increased oil and gas drilling activity in the U.S., we would expect buyers from the energy states to continue to be a significant market force in Southwest Colorado.
The state of New Mexico has also provided plenty of visitors and second home buyers to Southwest Colorado over the last thirty years. Both Wolf Creek Ski Area and Purgatory have become more attractive to New Mexicans as snow conditions at Angel Fire, Santa Fe Ski Basin and Ski Apache in Ruidoso have declined over the last several years. Being only three and a half hours driving distance from Albuquerque makes Pagosa Springs an attractive destination for both winter and summer visitors.
The New Mexico economy is expected to grow at a rate of 3.6% annually over the next five years, the 8th fastest rate in the nation. As defense spending is declining, big employers in New Mexico such as Los Alamos Labs and Sandia National Laboratories are redirecting their focus towards more energy and environmental programs in addition to their research in alternative energy and materials sciences as well as work developing, engineering and testing weapons components. Intel continues to employ a large number of scientists and engineers at its chip plant in Rio Rancho. The median home price and unit volume in Albuquerque are both rising from 2012 figures.
Pagosa Springs would do well to recruit more visitors from our neighbor to the south, especially the scientists, researchers and engineers, many of whom are young and enjoy the lifestyle and recreation offered in our small mountain community. Pagosa Springs needs to attract a new generation of tourists and real estate customers. The ownership life cycle for vacation property requires replacement Buyers. Perhaps our Town Tourism Committee and Chamber of Commerce and other groups would consider developing and launching a new and effective marketing campaign. One that specifically targets the young professionals from the major employers in New Mexico; not by offering some freebie in exchange for sitting through a timeshare presentation, but by showcasing more detail about the lifestyle and the abundance of outdoor activities and experiences available in and around Pagosa Springs–just a thought.
If you have questions or comments relating to the Pagosa economy or real estate matters, please email me at MikeHeraty@frontier.net, or call me at 970 264-7000. Also, be sure to visit our website www.pagosasource.com for more real estate information and a look at all the properties available in the area.
