~~FACTORS INFLUENCING THE MARKET:

Fewer Foreclosures - While first quarter results were not consistent across all property categories, there were enough positive currents underway that the market may justify some optimism for the months ahead. The number of new foreclosure properties entering the market continues to decline and the negative price impact of the foreclosure sales during the last three years has also declined.

Stronger Demand - We are seeing stronger demand within some residential price ranges and this, coupled with the very limited amount of new construction over the last six years means the supply imbalance may begin to improve. The market has shown that demand increases when prices are lowered and this has proven effective in getting some of the aged listings sold over the last year.

Over-Priced Listings - Pagosa Springs has had a large number of over-priced listings on the market for many years. These are typically Sellers that have very little motivation, waiting for that rare Buyer that falls in love with their property and cares little about economic reality. That Buyer has been absent from the Pagosa Springs market for about seven years now, but some Sellers are convinced they are still out there and, unfortunately, some real estate brokers encourage that type of thinking.

Interest Rates - Interest rates have crept up slightly, though a rate of 4.5%-5.0% is still cheap money by historical standards. The folks most impacted by rising rates are the first time and entry level homebuyers. Fortunately, this is a limited segment of the pool of buyers attracted to the single family home market in Pagosa Springs. Lenders seem a bit more anxious to make loans and there are a lot of cash buyers looking for investment opportunities that will beat the poor savings and bond market returns of the last number of years.

New Construction - A large number of homeowners have made improvements to their residences over the last three years, ranging from complete remodels to upgraded kitchens, room additions and new decks. Older homes with updated and upgraded features should attract Buyers that are more value-focused. Existing home prices remain 10-20% below the cost of new construction, but for those Buyers looking for the trendiest features, the nicest finishes, and greatest energy efficiency, a new home is the best option. We are seeing a handful of impressive new homes under construction with exceptional designs, gorgeous finishes, and mountain views, especially in the $500,000-$600,000 price range. Call us at 970-264-7000 for details or contact Mike Heraty via e-mail at MikeHeraty@frontier.net