“In this market, the first price is the best price.”
Buyers today are sharper, pickier, and far less willing to overpay. They’re comparing homes requesting repairs, and only competing for properties that check every box.
That’s why your launch price matters more than ever. The right number creates buzz, drives showings, and sparks strong offers in the first days on market. The wrong number? It sends your home into the “price drop” category—where momentum, and money, are lost.
When the price is right from day one, you control the pace, the offers, and the outcome. For your mountain property in Pagosa Springs, or anywhere in Southwest Colorado, call or text Mike Heraty for the best advice, guidance and real estate services. 970 946-6030
The first condominiums in Archuleta County were built north of State Highway 160 and east of City Market, shortly after the Pagosa Lodge was completed in the mid 1970’s. Initially the units were marketed primarily to residents of Arizona. Most of the early condominium units were primarily intended as summer homes for those escaping the desert heat. The original developer of the area west of town known as Pagosa Lakes was Navajo Trails, which later sold to another developer from Arizona, Eaton International. Initially the condominiums sold in the range of $50,000-$70,000. The developer provided in-house property management to oversee rentals when owners were not using their units. The extra income generated made the condominium units affordable to a greater number of second home buyers. Eventually this management company, known as “Sunetha” was purchased by members of management and became independent of the developer. (Later it was sold to Vacasa, now Casago an international resort rental management company).
The Present-
So far this year, 20 sales closed, up from 14 for the same period in 2024. The long-term average number of sales closed by this date is 21, so the transaction volume in condominium sales is normal for this far into the year.
The Median Selling Price ($295,000) declined by 7% from the prior year, while the average price per square foot ($295) increased by 7%, these figures are a bit of a mixed signal. Inventory is up slightly as is the median number of days on the market. Over the period from 2015 to 2025, the Median Selling Price for condominiums increased just under 200% or, an average of 20% per year. After adjusting for the increase in property taxes, monthly assessments, and other costs of condominium ownership, this is still an elevated level of genuine appreciation.
The Future:
The prohibitive cost of new condominium and town home construction remains a strong headwind which protects the value of existing units. The required front-end investments in utility infrastructure as well as the ever-increasing cost of construction materials and labor has kept new developments on the sidelines. Until much higher selling prices are achievable we do not expect the supply of condominiums and townhomes to increase. Owners’ right to rent their unit when they are not using it is an especially crucial factor to protect some level of affordability and to enhance values. For these and other reasons, we expect existing condominiums that are updated and well maintained should continue to increase in value in the years ahead.
Othe Factors Impacting Condo Market:
Monthly condominium associations assessments in Pagosa currently range from $400 to $600 per month. Typically, the assessments cover items such as exterior building and landscaping maintenance, building insurance, snow removal, parking area maintenance and trash collection. Most of though not all condominium associations keep a prudent reserve built up for large future outlays such as roof and exterior siding replacements. These annual expenses have increased overall during the last five years and higher monthly assessments should be expected. Well-governed condo associations understand the wisdom of keeping reserve balances based on the projected future capital outlays. This is the preferred alternative to “surprise” special assessments.
Call, Text, or Email me for a confidential discussion of your real estate matters. With over 30 years of successful real estate experience, I am your Trusted Real Estate Advisor.
Michael R. Heraty
Managing Broker-Owner
ENGEL & VÖLKERSPagosa Springs
Cell: 970 964-6030
Email: Mike@PagosaRealEstate.com
Posted inPagosa Real Estate|Comments Off on PAGOSA’S CONDO MARKET UPDATE
Though the sales within the Pagosa luxury second home market have slowed, properties are selling, and prices are up slightly from the prior year. (Median Selling Price YTD is $1,562,500 as compared to $1,410,000 at this time last year.)
There are 23% more homes on the market than a year ago. We continue to work through the increase in inventory resulting from the diminished impact of the home buying frenzy created during Covid.
Some buyers and sellers are pensive about the overall direction of the economy, this is spite of record stock market valuations, and overall employment growth. Expectations for a downward trend in mortgage interest rates have also impacted buyer behavior.
What lies ahead?
Affluent sellers and buyers are less impacted by the short-term difficulties of the economy. They have more liquidity, a more diversified portfolio of assets and income, and little or no debt. In softening markets, they are more empowered to drive harder bargains. As the saying goes… “Cash is King.” For sellers, bumpy market periods require more patience and less panic. Consult with your trusted real estate advisor to understand the elements in the market that are most important, whether you are buying or selling. Do not make rash decisions, access accurate and timely market data your Realtor will prepare, review, and interpret for you to get a clear picture of where the market is, and where it is headed.
We think it is unlikely interest rates will decline much ahead of sometime in the fourth quarter. The cost of new home construction continues to increase, which limits downward risk of existing home values. Here in Pagosa, the better custom builders have a two- or three-year backlog. If you can make a few compromises, you will save tons of money, years of time, and lots of headaches by purchasing an existing luxury home. If you are set on building the home you have always dreamed of and have set aside the money to pay for it, I understand.
Call me to learn valuable tips on the new home building process, contractor selection, and to explore the best existing luxury homes and the best values.
Mike Heraty, License Partner- ENGEL & VÖLKERS Pagosa Springs today. Take advantage of his 30 years of successful local experience and expertise.
If you have seen news headlines saying home sales are down compared to last year, you might be thinking – is it even a suitable time to sell?
Here is the truth. Yes, the pace of the market has cooled compared to the frenzy we saw just a few years ago, but that is not a red flag. Market activity is trending towards normal. And normal does not mean nothing is happening. Buyers are still in Pagosa and coming to Pagosa – and homes are still selling.
Why? Because few people can wait for perfect conditions. There are always people who need or want to buy – and this year is no exception. Buyers who are in the middle of a tremendous change in their lives, a growing family, a new job, a recent inheritance, still need and want to acquire a place in Pagosa, no matter where mortgage rates are. And they may be looking for a home just like yours.
The Right Broker Makes All the Difference.
If you have been holding off on selling your house because you think buyers are not out there, let this reassure you – there are still buyers looking to buy.
But since the market is balancing out, selling today takes more than just putting up a sign in the yard and entering it in the MLS. You must know and understand the market conditions, your home must have the right pricing strategy, it must be marketed well, and you need to know how to reach the buyers who are ready to act. That is where a Trusted Real Estate Advisor at Engel & Volkers Pagosa Springs comes in. They will help you navigate this market, position your home to stand out, and guide you through every step. Call us on 970 264-7000.
Bottom Line
The market has not stopped. Buyers are still buying. Life is still happening. And if selling your home is part of your next chapter, we can make it happen.
11,000 homes in America are selling every day – and yours could be next. Connect with a Trusted Real Estate Advisor at Engel & Volkers so you have an Advisor to create that perfect strategy.
Here is something you need to know. The housing market is getting back to a healthier, more normal place. And even though it may not sound like it, this shift is a good thing.
It is what you should expect. It is just that our expectations have been skewed by the intense seller’s market over the past few years. But what you need to remember is: there is still plenty of opportunity to be had if you are thinking about selling – whether that is next month or next year. You just need to stay up to date on what is happening in the market and have a strategy that matches the moment. Call us today at 970 264-7000 or email me at Mike@pagosarealestate.com.
Mike Heraty, License Partner-Engel & Völkers Pagosa Springs
A grove of aspen along a mountain road is luminous with the noonday sun.
The recent reduction in the Federal Funds Rate, helped lower 30-year mortgage rates down to the 6.0%-6.25% range. Though above the Covid-triggered rates of 2.5%-3%, the new rates on an historical basis, are reasonable. It may take some time, but if rates stay at or around this level, consumers will accept them and that should free up more inventory.
On a national level some second home markets have cooled down during the past year, due to the high rates and shifting buyer habits. There have been more all-cash purchases, but there have been fewer investment buyers in the second home market, causing prices to soften in some markets. Rental rates have stagnated, or in some instances, declined. This may be due in part to the trend away from remote work when larger companies are calling all employees back to the office. The vacation rental market in some areas became oversupplied from 2021-2023 and that factor also affected prices.
REAL ESTATE IS LOCAL
What about the market in Pagosa Springs? The Median Selling Price for single family detached homes in Archuleta County sits at $665,000, compared to $600,000 one year earlier, an increase of 11% year over year. So, the Pagosa market is bucking national trends. Why is this? Two big factors. First, limited inventory- we do not have production builders in our market, adding supply. Building costs are still high, there is a shortage of skilled construction workers and the time to complete a new home is significantly longer than in metro markets. Second, demand is still strong, despite higher prices and interest rates. Comparatively speaking, homes here are an excellent value in comparison to other mountain second home markets, and home prices in Pagosa are about 15% below Durango. Second home Buyers that have been priced out of Vail, Summit County and other mountain resort areas are finding their way to Pagosa Springs, where their money goes much further.
WHAT LIES AHEAD?
On the national level, economists at Goldman Sachs are predicting home appreciation levels of 4.4% for 2025. Expect mortgage rates to trend a little lower, but we also expect demand to continue to grow as the Pagosa area becomes more discovered. Meeting with a highly qualified, seasoned area real estate professional, who consistently studies the market is the most valuable first investment you can make in any real estate transaction. To discuss your circumstances and real estate goals, give me a call for a free consultation. I can be reached at 970 946-6030 or email me at Mike@PagosaRealEstate.com.
Mortgage rates continue to be a drag on the housing market. In metro areas, there has been a large shift with new home sales now accounting for a much higher than normal share of the total sales. Why is this, given the excessive cost of new construction? What national homebuilders have that private sellers do not, is a captive mortgage company. Yes, in many cases this big, publicly trades homebuilding firms also own mortgage companies. So, in addition to being able to raise construction money cheaply by using shareholder funds, they can loan out money to move their new homes at below market rates, using funds provided by their own mortgage company.
We do not see this happening locally as we do not have any national homebuilders active in our region. But, if your Realtor is smart and creative, they can enhance your listing and attract more buyers by creating and offering special financing. With current rates of 7.75%-8.00%, wouldn’t a rate of 5%-6% look more attractive? By buying down the rate, you can offer a monthly payment that is much more attractive than the current market rates and expand the buyer pool. In this market, you need to be creative. If your Realtor has only worked in a strong Seller’s Market, it is unlikely they are creative. Get one that is!
Mike Heraty is License Partner and Managing Advisor for Engel & Volkers Pagosa Springs. His successful real estate practice has spanned over 30 years. Mike has closed over $250,000,000 in transactions in the local market. Reach him at 970 946-6030 or email: Mike@PagosaRealEstate.com. You can also explore more on our website http://PagosaRealEstate.com
While the debate regarding the near and long-term outlook for interest rates continues, there are other forces still at work that impact the housing market. Focusing only on current interest rates is short sighted.
Our local housing market is comprised of vacation home Buyers and Sellers, together with primary home Buyers and Sellers. Remember, even with the high rates, we need to tune in to the fact that people are still getting married, having sex, and starting families, and engaging in successful careers. They still need primary homes and those more fortunate have the ability and desire to acquire a second home, or condo, here in Pagosa.
Even with today’s rates there is, and always will be demand for housing. Like the weather, rates will change. Many housing industry analysts are predicting downward adjustments beginning the second quarter of next year. As in the past, if rates drop 1.5%-2.0% or more from current levels, expect a stampede of refinanced mortgages.
In the meantime, if you are a Buyer, be sure you are working with a Realtor that understands how to navigate the current market. Be sure your Realtor connects you with the best available home mortgage options that fit your situation. If you are a Seller, your Realtor needs to have a firm foundation of experience in challenging markets. It boils down to this- be certain your broker has the creativity, thorough market knowledge, and strong industry network needed to achieve your goals in the current market. If yours doesn’t- get with one that does, the sooner, the better.
Mike Heraty is the License Partner and Managing Advisor for Engel & Volkers Pagosa Springs. His successful real estate practice has spanned over 30 years. Mike has closed over $250,000,000 in transactions in the local market. You can reach him at 970 946-6030 or email him at: Mike@PagosaRealEstate.com. You can also explore more on our website http://PagosaRealEstate.com
2022 brought an increasingly shifting real estate market to southwest Colorado, which began at the start of the summer. As the impact of Covid-19 decreased, we saw a reduction in the inflow of new visitors and homebuyers into the area. During 2022 total home sales in Archuleta County hit just over $300 million, down 18% from 2021, which was the strongest market on record for the area. 456 homes sold in 2022, representing a decrease of 36%, from the 620 sold in 2021.
The runup that started in early 2020 slowed down, due to combination of higher home prices, a jump in mortgage interest rates and a poorly performing stock market. These factors led to a return to numbers more indicative of the long-term averages in our area. The number of homes sold during 2022 was closer to where things were prior to 2020. There are other interesting facts within the data we studied.
First, the median selling price for homes during 2022 hit $539,500, an increase of 13.6% over the prior year. The median number of days on the market stood at 64, unchanged from 2021. So, things have slowed down in terms of the number of transactions, but with limited inventory, properties are still moving, and prices have continued to move higher.
With higher interest rates, a foggy near-term outlook for Wall Street, and large layoffs among tech companies, some are predicting a major decline in home values in 2023. Some bloggers have gone so far as to predict a meltdown of home prices like 2008. I don’t think this is likely and I’ ll give you four reasons why.
First, the housing market crash of 2008 was the result of very loose lending policies, with many home loans funded without any proof of income, tax returns or credit checks. Second, homebuilders were ahead of demand in terms of overbuilding, flooding the market with unsold inventory. Third, during 2022, nearly 37% of home purchases were made with cash. 53% were purchased using Conventional Financing, which most often requires a minimum of 20% cash down payment. Loan qualifying requirements are strict, unlike the period from 2000-2008. So, there is a lot more solid cash equity in the market, which creates stronger staying power during shifts in the economy. Fourth, there continues to be a large imbalance of available housing inventory relative to demand, and the cost of new construction remains high, which supports the value of existing homes. Further, bringing new housing developments to market is extremely expensive, with significant political, timing and market risk. Some new projects are under way and others are in the preliminary planning stages. The projected number of new homesites and dwelling units will still fall short of the forecasted demand.
We will experience a slower real estate market this year, but, during the early months of the Covid-19 pandemic, more people discovered Pagosa Springs for the first time. Many had only passed through on their way to Durango or Telluride, and many had previously vacationed in Vail and Summit County. Now that they have discovered and experienced the beauty of our area, the friendliness of our town, and the much better value proposition we offer, they are returning. We will continue to attract more second home buyers from the Dallas area and from the corridor between Austin and San Antonio. Folks from Arizona and New Mexico are continuing to visit and invest here. More Coloradoans are traveling down here from the Front Range as an alternative to the crowded and very expensive I-70 corridor from Dillon to Glenwood Springs.
Two new restaurants are being planned for Pagosa Springs, both east of our office in the East Village. Several condo and townhome projects are in the works as well. More future choices, more opportunities, more to offer our residents and guests. We will have further details and other exciting news during the next 90 days.
For over 25 years, I have provided real estate services to clients and customers here in Southwest Colorado and created and closed successful transactions through the ups and downs and flat periods of the real estate economies. I continually study the data, research, and analyze the events, factors and influences that affect the real estate economy, to provide the most resourceful guidance, advice, and brokerage service in the area.
For a more detailed discussion of the local real estate market and your goals related real estate, call or text Mike Heraty on 970 946-6030.
“ Frontline Heroes of our community: Health Care Workers, EMS, Law Enforcement, Fire Department, Emergency Services, Teachers and School District employees– be sure to visit The Lift Coffee House next to Mountain Pizza for a free coffee or espresso drink this month with thanks from Pagosa Source Real Estate Advisors.”
Will our national and local economic recovery be “V-Shaped” or “U-Shaped”? Will it be a quick and steep bounce out of the bottom, or will it be a slower, more gradual climb back up. Will the furloughed and laid-off employees gain their jobs and pay back, or will employers find they need fewer workers as things start to re-open?
Trying to formulate an educated guess of what a recovery will look like is no easy task and requires a coordination of three different sciences. This approach was proposed by some sharp real estate journalists that closely monitor changes in home buying behavior.
Business Science: How has the economy responded in the past to similar crises? How long did it take for employment to recover? This is a tough question to answer. We have never had this type of pandemic, this level of job loss and rapid decline in economic activity.
Health Science– How long will it take for Covid-19 to be controlled, and to research, develop and implement a vaccine? Will there be a second wave of infections, or will the virus mutate and return? Health science is working around the clock to understand this virus and to find an effective treatment and vaccine.
Behavior Science—Once businesses open back up, how long will it take for people to feel safe and comfortable to return to their normal consumer behaviors?
How quickly will visitors feel safe taking a commercial flight from Dallas or Phoenix to Durango; enjoying a cold beer in a crowded local brewpub, attending a concert on Reservoir Hill, getting into a raft with ten other adventurers to ride down the San Juan River, or slipping into the Hot Springs with 6-8 friends and fellow visitors?
Trying to combine these three sciences to forecast the future of the economy creates lots of uncertainty and differing estimates. Many Economists and Analysts project the recovery will take between 6 and 18 months. That seems like a reasonably educated guess. This will be a different real estate environment for sure.
Interested in knowing when it makes sense to request mortgage payment relief from your Lender and what impact that would that have on your credit? Do you want to know how local residential and commercial landlords are responding to the abrupt decline in local business activity and huge jump in unemployment claims?
What are the three most important factors if you are selling in this market? For Buyers- how do you know you are buying right in this kind of market? Learn how smart investors keep emotions from turning against them during these uncertain times. Watch for Part Three and Four, or call or text me at 970 946-6030, email me: Mike@PagosaRealEstate.com
If you are thinking about selling or buying real estate during the next five years, you may want to pay attention to the direction things are heading. For many, residential real estate comprises the largest percentage of their total financial nest egg. It makes sense to keep informed, especially now.
Per the Governor’s Order, in-person home showings were prohibited for nearly a month, with some restrictions finally lifted April 27th. We should see an initial increase in sales activity in the first half of May, but it may not make up for the losses in April.
Home sales in our county for April were down nearly 32% from
a year earlier and down 48% from March. Covid-19 also shows up in the number of
new Pending Single-Family Home Sales for April, with only 6 as compared with 15
for the prior month. There are some distinct positives such as historically low
mortgage rates and the fact that most of our visitors travel here by
automobile. With limited commercial flights and cheap fuel, Pagosa Springs will be easier to access than
some other mountain communities once it is safe to re-open. Accurately predicting
where things go from here is a longer discussion. Some thoughts are explored
and presented below, and others will be discussed in Part Two.
WHAT IS THE
LONGER-TERM IMPACT OF COVID-19 ON REAL ESTATE?
This is a big issue, and opinions vary greatly among
experts. National Association of Realtors Chief Economist Lawrence Yun does not
expect much negative price pressure by the end of the 2020. CoreLogic, a
leading property information provider expects some housing market slowdowns
with the duration driven by what happens to employment numbers in the next 3-6
months. Other analysts are expecting a decline in housing values and a slowdown
in the number of sales, well into 2021. Executives at Goldman Sachs, Real
Estate Group of the Americas forecasts mixed impacts within different real
estate sectors, expecting some good growth in certain industrial real estate
and datacenter properties, and tough times for retail properties.
Some local brokers believe there will be a great influx of Buyers coming into Pagosa Springs purchasing a home, cabin or condo so that if a future pandemic or other crisis hits, they have a safe and friendly place to escape. Some Buyers may seek out small mountain towns such as ours for that reason. We will see people that want to leave more densely populated areas. They will need to bring money and a job. Hopefully, they will be well paid individuals that can work remotely, or that bring small businesses to the area.
A few of us remember the handful of Buyers that came to Pagosa Springs in 1999 to escape the Armageddon of Y2K. (Hey…where is my Tin Foil Hat?)
Be sure to watch for Part Two for a more in-depth look at
this changing real estate market.
Mike has practiced real estate over several decades and through strong and challenging economic times. He is President-Elect of the Pagosa Springs Area Association of Realtors, served four terms as a Colorado Association of Realtors Vice President and owns Pagosa Source Real Estate Advisors with his wife Lauri. Check out our website: http://PagosaRealEstate.com
We started 25 years ago as Pagosa Source Real Estate Advisors. We have a reputation for impeccable honesty and integrity in our industry and community involvement. We have an unmatched record of successful transactions from homesites, to luxury residences, ranches, commercial property, and real estate consulting. After lengthy discussions and review, we signed on as a License Partner with the global brand Engel & Volkers. We are now known as Engel & Volkers Pagosa Springs. Our clients tell us our unparalleled market knowledge, exceptional listening skills and unsurpassed negotiating prowess saved them substantial time and money. When you can work with the best, no other choice makes sense. Call 970 264-7000, or view our website at http://pagosarealestate.com
