The Pagosa Springs Area Association of Realtors (PSAAR) released up-to-date statistics last week, reflecting the mid-July status of our local real estate market. To better inform the community from here on, the association plans to provide similar information on a quarterly basis.
Given current economic conditions locally, statewide and nationwide, the association data contained no real surprises. Nevertheless, area sales have fallen sharply in the past few years, while sellers and Realtors are feeling the strain.
In prefacing its facts, the association provided The SUN a “news release” summarizing what the numbers show. According to the release, “All data within reflects properties sold in Archuleta County by Pagosa Springs Association of Realtors (PSAAR). It does not include sales within our county by Realtors outside of PSAAR; nor does it include ‘For Sale by Owner’ properties.”
Further, figures in the release summary do not include sales of modular or manufactured homes. However, those numbers are addressed in various charts also provided by the association. Too, as a kind of disclaimer, the release declares its “information is deemed reliable, but not guaranteed.”
To begin, the summary states that, in the first two quarters of 2009, there were 43 percent fewer sales of all site-built residential structures, including single-family homes, townhomes and condominiums, than during the same period in 2008. Of the 56 sales seen this year, so far, 15 (or 27 percent) were “bank owned.” And, in the multi-family sector (townhomes and condos), five 2009 sales equaled just 25 percent of similar 2008 sales.
The summary also shows a 31-percent dip in average sale prices from the first two quarters of 2008 to those of 2009. While such figures tend to be more subjective, depending on specific property size, age, condition of the improvements, and general characteristics, they do suggest buyers are purchasing lower-cost homes this year. In 2008, the average residential sale price was $349,382, while from Jan. 1 to June 30 of this year, it averaged $240,934.
Accordingly, vacant land sales (all types) also showed a downward trend in the first half of 2009. As the association summary reflects, sales through June of this year were 69 percent of those during the same period, last year. Again, depending on lot size and characteristics, the average sale price dropped from $138,704 in 2008, to $87,044 this year. By June 30, the average 2009 sale price of $51,660 was 63 percent of the 2008 average.
To put it all in perspective, comparing early 2008 and 2009 residential and vacant land sales of Pagosa Lakes properties on less than three-quarters of an acre is useful.
In 2008, from Jan. 1 through July 15, 57 residential properties (less than .75 acre) sold in the Pagosa Lakes area, with an average sale price of $224,659. So far this year, during the same period, 43 properties have sold at an average price of $208,383. In each period, the overwhelming majority of sales involved single-family residences.
In terms of vacant residential properties under three-quarters of an acre, 24 lots sold in Pagosa Lakes from Jan. 1 through July 15 of last year. The average price was $37,708. The average during this year’s same timeframe fell to $31,636, as just 11 similar-sized lots sold between Jan. 1 and July 15.
Going back to 2004 and 2005, local real estate was a hot commodity. The number of both residential and vacant land sales far exceeded those seen in 2007 and 2008. However, the economic downturn that has gripped the local, state and national scenes since mid-2008 — while a primary factor — is only partly responsible.
The fact that, a few years ago, stocks were riding high, venture capital was freely available and out-of-state investors saw tremendous opportunity in the Pagosa Springs market, vacant land values — and corresponding home values — essentially shot through the roof.
In a robust environment where literally hundreds of lot sales failed to meet the test of true “arms-length” transactions, they were, nonetheless, used as comparable sales by Realtors and appraisers, alike. The result was a market infused with artificially-inflated property values.
Today, aside from poor economic conditions, it’s likely that local property values are simply reacting to the principals of supply and demand. In other words, as prices shot up in 2004 and 2005, and several folks rushed to cash in their equity, high prices gradually resulted in fewer sales, as inventory steadily increased.
By July 15 of this year, the PSAAR Multiple Listing Service (MLS) included 745 residential listings of all types, as well as 1,082 land listings, including residential, commercial, industrial and farm/ranch properties. All are in Archuleta County and include Realtor listings by PSAAR members and other outside Realtors.
Again, the above listings do not include “for sale by owner” properties, which at least one local Realtor suggests could virtually double the number of properties available to prospective buyers.
Meanwhile, list prices appear unrealistically high, doubtless further contributing to a saturated market. Though the number of residential home sales in Archuleta County has fallen dramatically since 2005, sale prices have steadily increased. In 2005, the average sale price was $268,676, while those in 2008 averaged $396,983. The average list price of all single-family homes (of all types and lot sizes) in Archuleta County, excluding modular and manufactured homes, now stands at $564,021.
For the purpose of this discussion, the term “average” affords a reasonable comparison of market trends, particularly when applied to statistics reflecting numerous transactions. However, the fewer the transactions, the less reliable the data.
Therefore, prospective buyers should keep that in mind when considering the worth of any given property, where a current valuation by a qualified appraiser could result in substantial savings.
In the meantime, as the PSAAR summary affirms, “The first half of a year certainly doesn’t show the whole picture. We are entering the selling season, people are arriving in town and we are confident that our market will improve soon.”
The summary adds that those living in and around Pagosa Springs should be optimistic regarding the community’s economic future. While real estate sales are down, PSAAR insists that, based on its climate and natural beauty, the area enjoys inherent values in the land and community that will always bode well for the future.