Insight into Pagosa Springs through the eyes of Chris Liverett (aka PagosaRE Guy)
A friend sent me this graph yesterday. It tracks the real estate sales activity in Pagosa Springs compared against the S&P index. It is not rocket science but it gives the indication that market activity is directly tied to stock market confidence here in Pagosa Springs. This makes even more since considering we are primarily a second home driven market. I thought it looked interesting when you look at it using the graph.
Pagosa Springs Real Estate market compared with the S&P 500
A picture is worth a thousand words…
History of vacant land sales in Pagosa Springs Colorado from 2003 to 2008 catogorized by parcel size.
In response to the comment I get 20 times a week…”Chris, let me know if a screaming deal comes along…” I am going to attempt to post what I feel is one of the better real estate investment opportunities every week here on Peak Buzz.
253 Wilderness Street Pagosa Springs Colorado
Asking Price- $165,000 now $144,900
MLS#- 616544
Square Feet- SEE COMMENTS BELOW
Bedrooms- 4
Bathrooms- 2
Year Built- 1997
Subdivision- Lake Forest Estates
Garage- 1 car
Here is my opinion on this home-
THE UP
It sits in a good location of Lake Forest Estates just a short jaunt to the grocery and shopping, so on the location for re-sale I give it an 8.5. The listing agent has it in the MLS for 1095 square feet which would make it about $132 dollars a square ft which is only a good price in this market for this caliber of home. After showing it to some customers a few weeks ago this number of 1095 did not sit very well with me, I felt it was much bigger. After talking to the county folks they tell me it is almost 1300 square feet. (1268 to be exact). This puts the price per square at around $114…I like that much better. I give the price a rating of 9 right now.
THE DOWN
The home needs some updating so for condition I give it a 7. The layout of the 4 bedroom design does not work well, however remove one wall and expand your living, then update your kitchen and equip it with upgraded doors and paint and…
THE ALL AROUND
…I think someone could make a a few bucks on this one. The curb apeal is nice and doesn’t need too much. That’s my take on it. I would love to hear yours.
Give me a call if I can help you see this one and be sure to check out it’s location and more information below.
If you are in my business (or any related business for that matter) your ear has been tuned well to pick up any chatter of real estate market activity. Some of the coffee shop talk that I have found myself in lately has been aimed at the seepage of information coming from Southern California about the jump in home sales from August to September. The real estate boom that we experienced in the first half of this decade was tied closely to the California market…as was the real estate slowdown. Many times over I have customers contact me from various parts of the West declaring they are going to buy in Pagosa whenever they sell in…fill in the blank.
The most recent uptick in the markets out here in the West has not made a lot of press as of yet. It is still too early to say “the market is changing”. (no one wants to risk crying wolf) One thing is becoming apparant - CASH investors are dipping their toes in the water, and testing the new lows. Pat Kitano has outlined some of these resourvces in one of his recent posts.
One of my sources, recently let me know that Pagosa has seen about a 66% increase in foreclosures in 2008 compared to 2007. As a Realtor® one of the more frequent inquires that I am getting is about new foreclosures in our market. in response to this, I have provided a way to automatically e-mail my customers and clients foreclosure properties as soon as they become available on the market.
If you are interested in getting foreclosures E-mailed to you when they become available on the market, join my E-mail list below, and when prompted choose the “Foreclosure Information” option.
How much money have investors in real estate lost due to the bust in the housing market? I hear talk about “investment loss” and (with the voice in my head) wonder on what these discussions are founded. Maybe we put a little too much stock in media sensationalism instead of taking a look at the the facts.
Examining a short time back into history will give us more perspective on this subject. An investor who bought a property five years ago in Miami, FL would be ahead by $200,000 today. The gain would be $150,000 in Las Vegas, NV. In our town, you would see a gain of $84,000 on an average home in the Pagosa Lakes area if you chose to liquidate now after having owned it since 2003. Take a look at my article last week, Real Estate Comparison for 2007, to see similar comparisons. According to data compiled by the National Association of REALTORS® , the United States as a whole is ahead by $54,000 on the five year mark. Only people who bought in the peak of the market and are forced to sell quickly face a potential loss. That loss on average would be one to two percent. Real estate investors who plan to hold for a reasonable period of time are still in very good shape.
The rate of appreciation in Pagosa Springs from even one year ago yields modest returns in all categories of properties except for a 20% median “loss” on partial acreage lots. Let’s discuss this supposed loss for a moment. If you have a small acreage lot in the Pagosa Lakes area for sale today you will receive on average $40,000 gross. That may seem like a loss compared to the fact that in 2006 you may have received $48,000 for the same piece of ground. Let’s add a little reality to this discussion and call a spade a spade. By definition, an “Investment” has an element of maturity. The word investment is defined as “The purchase of an asset for example, real estate or shares in order to produce income, or to produce capital gain on resale/maturity.” (According to www.homepath.com.au/help/glossary/) On the other hand, you can Google definitions for the term “speculation” and find that they are riddled with scary little words such as- risk, hope, anticipation, narrow and my favorite phrase…”Safety of principal is a secondary factor.” In a sentence, those who choose to speculate in real estate for the short term, may be burned.
Let’s re-focus on our small lot investment for one last moment. In 2003 a raw land lot in the Pagosa Lakes area would bring on average $12,714, and now in 2007 somewhere around $40,000. Four years = $27,286 total net. Break that down and annually and you have $6,822 per year minus holding and closing costs on a principal investment of a little less than $13,000. Let’s see- 54% annually ROI for four years straight…not to bad. We may never see this dramatic of a return again, but for this moment in time, this is the type of profit that is possible.
The housing market will remain our bedrock investment through the ebb and flow of current and future real estate cycles. It will continue to produce funds to help us through braces, college tuition, weddings, and retirement long after we have clicked the X on our browser and forgotten what has been written in the sensation-seeking story of the moment.
Search for homes at ChrisLiverett.com
Colorado Timber Ridge Ranch offers the finest of Pagosa Springs. Luxury mountain living just minutes from the core uptown area. Panoramic mountain views, rolling hills, incredible mature evergreens all with paved roads and complete with underground utilities.
470 Heath Drive -81147 is a fine example of what is available in Colorado Timber Ridge Ranch. Over 4200 square feet of custom Colorado charm. Have this haven of Rocky Mountain living all to yourself, or bring up to 23 of your closest friends! Complete with 6 bedrooms 4.5 baths, over-sized deck for entertaining, jaccuzie, 4 stall garage, media room, game room and located on 3 private acres. Contact Chris Liverett or Jon Johnson for a private showing.
Location: Pagosa Lakes
Over the years the state of Colorado has developed a very buyer protective type of real estate sales contract. In a conversation with another broker a few weeks ago the topic of failed purchase contracts came up. He was astonished at the number of contracts that he had written that have fallen through and not gone to closing in 2007. After discussing some of the reasons for these failures I made a kind of mental inventory of a few of the major things that we as real estate professionals have to pay very close attention to when it comes to drafting and creating a successful sales contract. I thought it may be of benefit to many of my selling readers to list a few of the major terms to be aware of when participating in a real estate sale.
Obviously the most important part of any purchase contract is the sale price. We know this without giving it too much thought. It’s the seemingly small things that can often times hang a contract up from going to closing. As a seller you want to find and accept the “cleanest” contract possible. A Realtor with daily experience can be an incredible asset to help you decipher the sometimes not so obvious issues lurking behind the typed print of an offer. Sometimes the reasons behind the arrangement of specific terms that a buyer asks for can be re-arranged in such a way that helps you, the seller, obtain ultimate success. It pays to have a Realtor on your side that can be your advocate in walking through this process.
During my morning net peruse I found this interesting article written by Cyndi Mitchell of the Pagosa Daily Post. I thought it was worth looking at.
“The Town of Pagosa Springs is putting the finishing touches on its Downtown Master Plan, a guide to development and “re-development” of the historic core of Pagosa Springs. That plan focuses on the area of downtown along Highway 160, otherwise known as “Main Street.” But what about the ‘other half’ of the downtown core — Hot Springs Boulevard?Back in the 1800s, the U.S. Government platted the area surrounding the Great Pagosa Hot Springs, one of the largest and deepest hot springs in the world, with vague plans to one day build a convalescent hospital for Civil War veterans. That plan was shelved, and the area… “READ MORE
Fall-my favorite time of year. I don’t know why it strikes me so strongly. I think maybe it is from boyhood memories of growing up in the South. The autumn temperature drop was accompanied with an acute degrading of moisture content in the air. This was a very welcomed change. Along with the Fall change came the preperation for hunting season, a ritual that I still participate in though I live in a different place and time.
As I paid my dues in the forest this year, my mind wandered to the disciplines involved in this endeavor known as big game hunting. Remarkably they are very applicable to many things in life. One of which is real estate investing.
So as my “Tribute to the hunt” (and my nod to the myriad of southern license plates affixed to an army of camoflaged 4×4’s) here are 3 principles that both successful hunters and real estate investors have in common:
Preparation-
Preparing to spend several days in the mountains of Colorado can not be pulled off without a little forsight. What will the weather be like? What is the best altitude for the type of game we are after this time of year? How far will we be from a good water source? You wouldn’t go into the hunt without adequately addressing these and a hundred other issues. As one begins the process of looking for investment real estate purchases many thing have to be considered. What EXACTLY is the economic tempo of a given real estate market? I don’t mean what is the media spewing, I mean what are the most current sales records conveying? Has the time-line of sales been studied for a specific neighborhood with seasonal adjustments made? There are factors at hand that are best spoken to by professional real estate brokers who live, eat and breath a specific market. They are excellent sources of information when it comes to preparing for investment purchases.
Planning-
Without a plan for Elk hunting in the mountains around Pagosa Springs, you will be just as effective sitting on the couch at LaTazza. (O.K. lame comparison. I happen to be writing this from there, it was the first thing that came into my mind.) To successfully get into harvest range of game you can’t just have a plan, you have to have plan A through F.- Virtually an alphabet soup of back-up plans. In real estate investing having the proper plan to fit your desires is essential. What type of financing works best? Should you finance locally or elsewhere? What is you exit strategy should things change for you? As a real estate professional, these are the kind of questions that I field on a daily basis. It pays to have someone help you plan strategically for your real estate investments. Someone who can help you hatch a plan that is specific to you and your desires.
Patience-
Wait for daylight, wait for the wind to change, wait for the rain to stop, wait for the right animal, wait for the right shot. The opportunities for increasing patience in the world of hunting are endless. Without the proper patience failure is in-evadable. It is no different with real estate purchases. Speaking from experience, ( and not a pleasant one) lacking patience will hurt you. It hurts in your wallet, it hurts in your intellect, emotions and spirit. Being patient also means having “patient” money. This is advice that you won’t get from all mortgage or real estate professionals. What I mean is if you are not buying with cash, are you able to hold the note for a long enough period of time? Banking on the “maybe” is a tough gamble in this line of business. Make sure you can withstand the weather if the winds change. I have spent too many hours this year consoling sellers who are “just trying to get out” because they were not allowed the luxury of patience due to a squeeze in the budget after their real estate purchases.
I have a few men that I owe much to in the realm of hunting wisdom and knowledge. I could have never been as successful without their input and guidance. How did they get so good? Experience. Real estate investing is no different. We are experiencing a fantastic time to buy investment property in Pagosa Springs right now. Go for it. Just remember the basic disciplines. If you are new to the investing world, enlist the guidance of a real estate professional that you can trust. Then one day you can pass on the wisdom and learned disciplines to someone else.
