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
Good news for the housing industry today – even though the U.S. Commerce Dept. reports a fractional 0.6 percent drop in March new home sales compared to February.
The good news in the Commerce Dept.’s report is that the number of unsold new homes is going down – a sign, some analysts say, that the housing market is stabilizing, or trying to get back to normal.
The inventory of new homes in March shrank to 311,000 from 328,000 in February. The 328,000 number means there are 10.7 months’ worth of new homes for sale still on the market. In February, there was 11.2 months’ worth of unsold inventory.
The monthly change in inventories was 5.2 percent, the largest decline in more than …Read the full article (by Alex Finkelstien)
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.
As the end of another wonderful year in Pagosa Springs comes to an end, my thoughts begin turning toward a little reflection. I tend to do this in all parts of my life. Reflection of my faith and what I have been taught this year, a review of relationships good and bad and business practices with an eye toward improvement.
For my on-line readership I thought I would give a snapshot of our Real Estate market, a year end comparison of sorts. I have compiled the SOLD data from our local MLS system in order to see a general trend for the past 5 years.
I have broken down the numbers into two major categories, Residential and Vacant Land. Residential is comprised of all stick-framed homes and sub-categorized by acerage or partial acreage size. The Vacant Land can simply be understood as differing sizes. All data is county wide.
Last week I wrote about the general stability of real estate values that we are seeing in Archuleta county. I also mentioned that although home and land prices are remaining very strong, the rate at which they are selling has significantly decreased. After the publication of that article I had a few conversations in which I was asked about the rate of sales, and what that really means for us in real estate. I decided to address that topic here on my blog.
One of the measurements frequently used to understand liquidity of inventory is known as the absorption rate. This is basically the rate in which a specific sector (usually price range) of the market sells in a given time frame. An easy way to understand this is to look at it in one month increments. For example- If we were looking at home sales between 100,000 and 200,000 and we found that 60 homes have sold in 2006, this would be an absorption rate of 5 per month. (60/12 = 5) This number does us little good unless we put it in more tangible terms. When we take the number of current active listings and divide it by the absorption rate we can determine how many months of inventory we have. For our example above if we have 39 active listings then we have a 7 month inventory.
As a general rule 6 months supply of inventory is a balanced market. More than that and we are considered to be in a buyer’s market, less and we are in a seller’s market.
As I mentioned last week we are in a buyer’s market right now which up until this point has not affected our sale prices, but has affected our months of inventory. Simply put, It will take a lot longer for you to sell your home if all factors remain equal.
I have compiled the charts below from the numbers found in the CREN MLS system from Nov 1st 2006-2007.
Listed below are the current months of inventory for residential listings in Archuleta County.
Here are the current months of inventory for vacant land in Archuleta County.
The first two questions I get asked when preparing to list property is 1- “How much is it worth?” and 2- “How long will it take me to sell?” Once I determine how much a home or property “should” sell for I always go to the numbers found through absorption rates and months of inventory. Then I encourage my seller’s to determine their list price by deciding how long they are willing to wait to statistically be able to sell their property.
If you currently have your home or property on the market and are unsure about the price in which it is listed, ask your REALTOR® about the months of inventory for your price range. If you are not currently working with a REALTOR® give me a call and I will be happy to discuss the pricing of your property with you.
The national media is going strong, letting us all know on a daily basis the troubles of the housing market. “Foreclosure” seems to be the hottest buzzword being splashed on for an instant headline anchor. There is a lot of truth being seasoned with fear and speculation. Five of the states that truly are being hammered with foreclosures are Florida, California, Arizona, Michigan, Ohio. The Midwestern states are reeling from the job losses due to the automobile manufacturing decline. Truth be known, these state may be in a similar circumstance whether there was a housing slow down or not. The coastal extremes have surely set themselves up for a correction due to record breaking appreciation rates. Areas like Arizona were simply overbuilt. This is the position that many areas of the country are in right now.
So with all of the housing fear and turmoil, where do we really stand when it comes to real estate prices? Have we here in Pagosa Springs found values to have appreciated or depreciated in the past few years?
According to the data found in CREN (Colorado Real Estate Network) which is the Multiple Listing System that we use here in Pagosa Springs, our overall value remains fairly stable.
I believe most REALTORS would agree when I say that our market noticed the first signs of volume slowdown for this cycle around the summer of 2006, July to be exact.
For this article I am just going to look at a few sample market sectors to give you an idea of the overall situation. Looking at year over year median prices our MLS system shows the following:
Single Family Homes built on a 1/2 acre or less have sold for $244,750 in 2007, up 4% from 2006 with a median sales price of $234,500.
Vacant Land Lots of 1/2 acre or less have sold for $40,000 on average as compared to $50,000 in 2006. This would constitute a 20% loss in value overall.
Vacant Land 35-40 acres commonly known as 35’s are seeing a median sales price this year of $325,000 this is up significantly from a median sales price of $229,000 in 2006.
All Residential. This is taking into account every residence in Archuleta county stick framed, manufactured, and condo found on every number of acres-AKA the whole enchilada. Median sold price for 2007 as of this articles publication is $260,000 compared to $259,305 in 2006. If my calculator works that is less than a 1% change (for the better) in real estate value from last year until now.
What these numbers do not take into account are the days on market or the number of sales per unit type that has taken place. Those figures have most certainly changed and are causing sluggishness in our market. Time will tell how that part of the story ends.
There are reasons that certain parts of the market hold and appreciate while others may see more fluctuation. I will not go into those here in this article but would be happy to discuss it with you over the phone or a cup of coffee. Give me a call if you would like to talk about these trends or anything else real estate related. Until then, read those headlines with a certain amount of skepticism. So far the picture here in Pagosa Springs looks a little different than MSN might have us believe!
I just completed an on-line quiz to determine my level of competency when it comes to predicting and understanding on average what home-buyers are looking for. This test ,created by the National Association of REALTORS, is based on a survey aimed at understanding the ever-changing trends of our market. While every consumer has individual preferences, we live in a culture that thrives on a sense of uniformity. I wanted to take a closer look at these trends so that I may equip myself to better understand the mindset of the buyer.
This week while looking through a home, the couple pointed out in dissapointment the tiny little master bedroom closets. I realized that this home must have been built in the 60’s due to the closets and a few other aspects of the house. It’s hard to understand or remember the details of life 40 years ago and the reasoning behind such a floorplan.
Here we are in 2007 with much different life priorities . For better or worse, our wants have changed when it comes to home preferences. In keeping with that thought here is a short list of the top features in 2007 that home buyers want. This list looks at home buyers overall desire and for what they are willing to pay extra. (I hope all those spec. builders out there caught those last 3 words.) The information gathered is from purchases made starting in 3rd quarter 2006 to early 2007.
The number one feature cited was central air conditioning. Given our climate in Pagosa Springs, I believe this one can be safely crossed off. I can only think of about a 1/2 dozen homes currently on the market that even have air conditioning. So I will begin my list here with the number 2 choice.
Over-sized garages for our purposes can be defined as 2+ cars. The real estate markets in the West and Mountain areas scored very big here. Extra garage storage is very important. 56% of home buyers will pay more for this.
Walk in closets are the next must. This was given as the number one preference in 2004. I have to wonder what this says about the level of vanity in our culture…but I digress.
Outdoor spaces and play areas are big on the young families list. I can relate to this. I believe this is a prime age for entertaining friends, and sometimes lots of kids are involved. Or is it that this bracket just can’t afford to go out?!
High speed Internet access may be debatable in a town like ours, but I think the need is here also. I ran into two different couples just this weekend that are telecommuters of sorts, and work primarily off of an Internet connection.
After finishing my quiz the results came back at a 80%. Will this little exercise help me sell any homes this Fall? I don’t really know. I do know that staying on top of trends and understanding the way of the market will help me in advising builders and investors who want to maximize profit. I will continue to pour into this type of information so that I can remain an asset to my business and to you the trusting buyer.
