5 years of sales history for vacant land in Pagosa Springs

A picture is worth a thousand words…

History of vacant land sales in Pagosa Springs Colorado from 2003 to 2008 catogorized by parcel size.

Real Estate Year End Comparison-2007

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.

 

 

 

Search for homes at ChrisLiverett.com

Using the absorption rate to determine the months of inventory

   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.

 

Best land purchase in Pagosa?

As I pulled up to the broker open house my phone rang again. The 505 pre-fix told me it was my New Mexico prospect calling to play another round of 20 questions. He is looking for land to purchase in our area between 250 and 300 thousand dollars. This particular conversation pivoted on his question “Chris, if you were buying land for this amount right now, what would you buy if it was purely investment?” As I quickly collated all of the recent conversations, facts, figures and opinions that had been floating in my head I gave him my best shot ending with the familiar phrase, “I would really like to spend some time with you looking at all of the options, there  is an awful  lot of personal preference involved.” This statement may sound like a vague cop-out, but only 10 minutes later these words were supported…

    I walked inside and participated in the usual broker open house routine. A walk through accompanied by the listing agent, a few questions and comments about location and quality of finishes, some constructive feed back about pricing and appearance and then… to the kitchen for some munchies.

When the dust settled on our initial conversation I found myself in the midst of a handful of Pagosa Springs real estate agents that I have a good amount of trust and admiration for. Jerry Driesens, Jon Jonson, Lee Vorhies and Christine Vorhies.  So I popped the theoretical question. “If you were spending this amount on land, what is the BEST investment?”

Honestly I expected a pretty similar answer but the response was as varied as the crowd to whom it was asked.

“The meadows will stay very strong” one said. “There you have elbow room, with space for horses, but you can still ride a bike to City Market.”

“Timber Ridge has all of the amenities and the right location”. “Very nice homes to support appreciation. After all , we are heading in to the prime baby boomer years, and they have the money to afford it.”

And then another, “Timber ridge is to new to have proven itself. Navajo River Ranch without a doubt. Thirty five acre tracts with all the amenities, and not to far down 84.”

I was cracking up inside. Only because I find myself having similar conversations in my head when I am striving to weigh all of the options for a particular customer or client.

  The reality is the area in and around Pagosa Springs offers a wide variety of flavors when it comes to preference. And we all have a little different take on life, so as time marches, on there will always be buyers and sellers of each type of property. Location, amenities, privacy, views or whatever the case. Individual preference carries much of the value of any property. I think dealing with the individuality of any land or home is  a large part of the appeal to me about this business.

 There’s a hat for every head, and the challenge and joy is to put those two together as succesfully as possible.

Home Pricing- Close only counts in horseshoes and hand grenades

If I’ve heard it once, I’ve heard it a bazzillion ( which according to encarta.com is an actual  English word, but not a real number) times: “I want to leave a little room to negotiate in my listing price.”

  I can provide statistical evidence that those who choose to list their home with “a little wiggle room” never have to worry about the grueling emotional task of negotiating a lower price- because they never sell.

   In my world, the world of real estate, we have a classification of these types of listings: They are known as expireds and withdrawns. This usually means that they are priced out of reach of where the buyers are biting.

  A quick look at the past 30 days from our Pagosa Springs MLS system reveals this truth. Our area has 1817 properties for sale; 108 of these went under contract; 62 went into settlement or were sold; 143 came off of the market by either expiring or being withdrawn. Twice as many properties came off of the market with unsuccessful sales than that closed. Granted, many of these properties were re-listed with another company, but it still points out that many sellers are expecting unrealistic returns on their real estate investments in the midst of a buyer’s market. Once the sellers have switched companies, it is almost always associated with a price improvement. In the words of Jerry Driesens “I want to be the last person to list your property, not the first.”

   The sellers who choose to look at the market with discernment and realistically place their home in the market become “former” owners and move on with their lives. Many times to realize their investment profit and capitalize on great value by purchasing other properties in the current market. Here is  a recent example:

  I  received a call from a client who wanted to “move” his property. During our discussion he said “this is the bottom of where I am willing to go”. Soon enough I found a buyer who like any consumer wanted to see some comparable sold homes before he purchased this one. At this point, when showing him comps,  it was easy to realize the value based on those numbers. It was a realistic price, not a “steal”, but a fair market value. We did NOT negotiate a single penny. The buyer purchased at asking price because of the value. The property did not sale in the months before because their was “negotiating room” on top.

Leaving negotiating room when pricing is the same as placing your home on the top shelf of the candy isle just out of reach.  It’s not that your home is not desirable, its just that buyers are deterred by all of the homes on the shelf right in front of there nose within easy reach. If you price right , actually you don’t have to come down at all. Many homes in our market are selling for the asking price. These are houses belonging to sellers who dared to meet the buyers in the market instead of hoping that the buyers would come up out of the market to make an offer.

   Close doesn’t cut it in a competitive market. Close only counts in horseshoes and hand grenades. Forget about nudge room, fudge factor, or wiggle space. Place your property on the market at the right price- then hold your line. If a buyer wants closing costs- negotiate upward. There is always a good market in any market. This is found at the precise point where sellers focus on price and condition rather than a personal bottom line. Sometimes making several base hits is a lot better than a single home run.

I love my land in Pagosa…can you tell me how to get there?

Truth is stranger than fiction (and funnier too).

Last week I encountered a situation that is too funny not to share with my readers. The story begins about a year and a half ago in the spring of 2006 when I helped a young couple find a parcel of land that they would soon prepare for construction. They took every precaution to get the perfect piece of real estate, one that they could build a home on that they were proud of. After about 6 weeks of looking we finally found it. I spoke to them two times after closing, and as things go, we all got busy with our lives.

  Fast forward to July of 2007. The gentlemen of the former mentioned couple walks into my office at about 6:30 one evening. We’ll call him Jody. After exchanging pleasantries and catching up a bit he tells me that he would like to try and purchase the property adjacent to his. I can help him with that. “It’s what I do” came my feeble attempt at weary comedy. As he was leaving my office I assured him that I would do my homework and have  a direction for him to make an offer in the next few days.

   After dialing the phone number that I came up with for the neighbors acreage I got a series of beeps which lead me to believe that she, we’ll call her Ms. Spacey, was using her phone for a tandem fax set up. Ok, I’ll try a call again tomorrow…same story. I then checked every reference I could find to come up with an alternate number to reach her. No good. Plan “B” I’ll draft a note and fax it to her. I did this by hand so that it would not appear to be a sales scam. Two faxes later I have nothing. Plan “C” send her a letter. Sent the letter and waited with nothing in return. I decided to keep trying these three methods until something turned up. Days turned into weeks and then  a couple of months until this project slid off my radar.

   Then last week I get a phone call from the feminine counterpart of my young couple clients ( we’ll call her Jackie) priming me again to get this land for them. I did not want to let them down. I rolled up my sleeves and with great determination went back to the fax machine with a barrage of hand written notes. Then …the call. It was Ms. Spacey herself. She seemed very surprised that her phone was rolling over to the fax. When I told her it had been for months she laughed and said “I’m not really in the twentieth century yet”. ( which I found hysterical in and of itself)  As she started reminiscing about the piece of property I flipped open my laptop to discover she had owned it since 1979. She told me of weeks of camping, motorcycle riding, soaking in the springs (the old school version with cross ties) bonfires, birdwatching and on and on about the good old days and her “Pagosa paradise”. Ms. Spacey and her family it seems have spent countless weeks enjoying their little piece of heavenly vacation property. After all of this, to my surprise, she still said that she would sell it! Not wanting to pressure her on the spot for a purchase price I discreetly dismissed our conversation with a promise of a return call.

   Two days later I have two faxes from our Ms. Spacey in my in-box. This is strange to me because I left her with all of my contact phone numbers, and I have not received any calls. The first one tells me that she thinks “I must have the wrong property owner”. Even though I used her first and last name several times in our initial conversation. I dismissed this to being confused about street address vs legal lot and block number, a pretty common occurrence. It was the second fax that still has me a little worried about what I have gotten myself into. You see, in order to make a successful transaction occur between two parties who are approaching one another in this manner, there has to be certain elements in place. Trust, understanding, intent, solid communication…and maybe sanity? After all of the fond memories of Ms. Spacey’s past with her little piece of land and the countless summer trips, the second fax says: “Mr. Chris Liverett I so much appreciate our conversation about my land in Pagosa. I want to visit it soon. Can you tell me how to get there?” 

   I’m not sure where this leaves us in our pursuit of a real estate transaction, but I know that some things in life are too funny to make up.

6 Tips on selling your home in Pagosa

  All real estate is local. I did not coin this phrase although I believe it to be very true. David Lereah gets the credit for this as the title of his book published earlier this year. I hear quite often that “the national market is ___ ”  fill in the blank, when at any given time you will  find individual market conditions all over the spectrum across our nation.

   It is however wise to look at any LOCAL market and understand it for what it really is. Currently Pagosa Springs has receded from the enormous boom that it has experienced for several years. It is important to know the reasons why we are in a slight buyer’s market, “no two times or places are created equal”. Our slow down is primarily a problem of  over-inflated inventory with a hint of consumer nervousness. Both of these factors mind you can change very quickly. This is not the case for some parts of the nation ie. Detroit’s decline due to the decrease of automobile manufacturing or Denver’s sluggishness as a result of the massive over-stretching of sub-prime lending to the young tech industry buyers. Colorado resort towns are still seeing outside secondary buying power very strong. Interest rates are good and nothing has changed substantially to make Pagosa any less desirable place to live or vacation. So how can you sell your home in our LOCAL market right now?

  If you are currently in a selling position there are many things that you can do to increase your chances of a successful home sale:

Price reasonably

Without this in place you WILL NOT sell your home. There are simply too many options out there right now. The goal in this market has to be to separate yourself from the crowd and this starts by being educated on current SOLD inventory and pricing accordingly. There are ways that consumers can find this out. Sold homes are public information, but sometimes it is difficult to find out this information without doing a lot of research. On my website, chrisliverett.com, I offer an option that lets you get specific sold property emailed to you. I am sure that their are other Brokers that do the same.

Stage

 What can you do with your paint colors, furniture arrangements, accessories etc. that can set your home apart. This is so often overlooked by homeowners that are accustomed to the look and feel that their home has had for years. You must think about the first impression that your home gives when a person walk into it for the very first time. Could it have less furniture that would give a small space a larger feel? Are there unnecessary item on the bar that become a distraction? Ask your real estate broker for his or her advice on this subject, or better yet, hire a professional home staging service to help you stage your home. Statistically a few hundred dollars will make you thousands.

Creative incentives

Think outside the box. Are you selling a condo or a vacation home?  Offer 2 annual passes to the hot springs at closing. Have a home on the golf course? Provide a  membership with x country skiing passes. There are a lot of professionals that scoff at this but the name of the game is to have your home stand out from the rest and every thing that can differentiate in this market is a plus.

Show improvements

Give your Realtor® copies of all improvements to the home and any guarantees for anything like a new roof, furnace, or hot water tank. Having these things for your Realtor® to talk about during a showing can fill any dead space in a conversation with positive attributes about your home.

Quick showing time  

If at all possible have an immediate showing time for your home, and keep it clean. Most real estate professionals will do everything they can to project showings a day or several days in advance. This is not alway possible in a town like Pagosa. Many times Mr. and Mrs. buyer blow into town and hit the ski slopes, fall in love with our town , and call the first Realtor® they see asking to look at homes “after lunch”. As a home seller, you may find this annoying, but they may also be the ones to write the check for your home.

 Choose the right Realtor®

There are a lot of us out here to choose from. The longevity of any given Realtor® in this town can range from 25 minutes to 25 years. We have part time agents, full time agents, overtime agents, independent agents, large firms, small firms and all shades of personalities and experiences. These are all good things that make up a fun and diverse group of professionals. You should choose one that YOU can work with but ANY AGENT worth his commission should be able to answer some basic questions for you. How many comparable homes have sold this month in my neighborhood? What are the average days on market? What listing price puts me in the top 15% of homes like mine. None of us can shoot from the hip completely accurate on questions like these, but with todays technology we should be able to answer these and many other questions like these within a short amount of time.

Real Estate Market Report- Aug 07

Market Report for August 07 Real Estate Monthly Market Report
Greetings!Happy September to you! I have compiled the sales numbers from August of 2007 below. The % change is taken from a month to month basis. This is the % of change since July of 2007. I hope you find this information helpful. Pagosa Area Real Estate Aug 07    Number Sold % Change Median Sold Price % Change Current Inventory % Change Homes 17 13.33% $300,000 8% 474 5% Condos 5 66.67% $269,900 5% 144 7% Land < .5 Acres 7 -41.67% $47,500 7% 470 -1% Land .51 to 2.99 Acres 11 57.14% $55,000 -52% 240 4% Land 3 to 9.99 acres 3 -25.00% $139,000 -18% 202 2% Land 34.99 to 45 Acres 2 100.00% $1,274,500 240% 93 9%	Quick Links My WebsiteCurrent Listings My Blog Search Pagosa MLS

Chris Liverett gets published for Pagosa Real Estate content

I recently made an agreement with Pagosa Daily Post, an online news source that is among the top in our part of Colorado, to write for them on a regular basis. I will be providing them with a weekly “Real Estate Related” article.

Click here to see my first article, The Rich Idiot Real Estate Investor , and check back at the beginning of each week to view new articles. Be sure to pass it on to anyone who might be interested!

Google Earth is catching on!

If you know me at all you know I am a Googlepheene. I use Google in my Real Estate Business and my personal life. Especially the mapping attributes that Google is doing so well.

For instance. I am planning a bow hunting trip into the San Juan’s at the end of September. The duration will be 6 days, and we will be camping several hours from anything. So a few days ago as I am trying to explain the strategic location of my proposed camp, (I would normally include a link here to the area, but if I told you….then I would have to kill you.) I said in an impatient tone “I’ll just Google (Earth) it and send you a link”. My friends in amazement could see every detail of terrain, trails, Forest Service roads, lake , stream and meadow of a place that they had never visited. They have become educated on the terrain from the comfort of there armchair!

 For business Google Earth is invaluable to get the idea of a tract of land across to a client or potential customer. This I have known for a while. What I did not know, is that more and more of the general public have caught on to the GE application and are savvy enough to use it the way it was created.I usually just send a jpg or snapshot via e-mail so that the recipient can see a static image. The result is quite amazing.

Here is a real life example of a small lot that I listed this weekend. 56 Short Drive, Pagosa Springs Colorado. It is found in Pagosa Highlands Estates. A small established subdivision near Hatcher Lake.

                     When taken in comparison, it is quite striking how effectively you can get the image across.

I sent these images to a potential buyer, and to my pleasant surprise he said…”Send me the Google link. I’ll pull it up and see how far it is from National Forest and amenities”.

This is very encouraging to me as a real estate practitioner. I am always on the look out for the best technology that will convey an accurate picture to someone half way around the globe. It seems that this type of technology is finally catching on with the masses, and with that familiarity comes more and more powerful tools for us to speak to our audiences with.