Outperforming national trends, Archuleta County saw a slight recovery in real estate sales in 2010, according to a report released last week by the Pagosa Springs Area Association of Realtors (PSAAR).
Figures from the report, drawn from the Multiple Listing Service (MLS) database indicated that all types of home sales increased about 20 percent in 2010 over the previous year, with 254 homes sold last year compared to 211 in 2009.
Also, in contrast to the national trend, average sale prices fell in the county, down 6 percent overall. In 2009, the average sale price was $283,091 compared with $267,107 in 2010.
Nationally, the average sale price rose .4 percent, largely due to decreasing inventory of pre-owned homes available across the country.
Archuleta County also saw a dramatic increase in foreclosure sales, up 76 percent from 2009, with foreclosure sales accounting for 28 percent of all housing sales in 2010.
The report stated that foreclosures only accounted for about 10 percent of the residential inventory in the county during the past year.
Nationally, 33 percent of homes sold in the U.S. were distressed sales — foreclosures and short sales (homes sold for less than the value of the mortgage).
Late last month, the National Association of Realtors reported home sales in the U.S. at a seasonally adjusted annual rate of 4.7 million houses and condominiums in November. While sales increased from October, they were down 27.9 percent from November 2009.
While the total housing inventory in the U.S. fell 4 percent by the end of November to 3.71 million existing homes available for sale (a 9.5-month supply at the current pace, a decline from the 10.5-month supply in October), many analysts are pessimistic that the situation is improving, pointing to the large number of unlisted bank-owned homes and potential foreclosures — a “shadow inventory” that could continue to deflate prices.
Almost unanimously, economists agree that the national housing situation will not improve until employment improves. Although December unemployment dipped to 9.4 percent from 9.8 percent the previous month, economists agree that is not nearly enough improvement to prop up housing sales, much less create substantial economic growth in the country.
National unemployment figures for January will be released Feb. 4.
November unemployment for Archuleta County reached 10.5 percent, the first time it exceeded the national rate since last April. December figures for the county will be released Jan. 25.
Although the unemployment situation is worse locally than nationally, that condition has apparently not placed the same kind of burden on real estate as it has throughout the rest of the country. In fact, last week’s report indicated that sales for single-family homes increased 28 percent in 2010 from 2009, with 208 homes sold last year versus 166 homes sold in 2009.
While the PSAAR report indicates good news, local Realtor Mike Heraty stated cautious optimism regarding the figure, pointing out that, like the rest of the country, the county is burdened with a “shadow inventory” of foreclosed properties that have yet to glut the local market.
“I’m not a pessimist; otherwise I wouldn’t be in this business,” Heraty said. “But with things as they are, I don’t see things turning around for another three to five years.”
Heraty estimated that between 60 and 100 properties, single-family homes, condominiums and townhouses could potentially end up on the market over the next year.
Archuleta County Treasurer Betty Diller reported that Heraty was not far off in his assessment.
“We had a slight increase (in foreclosures) over the last year, but they are holding steady, so I suppose they are leveling off,” Diller said.
In fact, the PSAAR report indicated a continued decrease in local sale prices with the average home sales price in 2010 at $300,908 compared to $328,090, a drop of 8 percent. Likewise, $227,050 was the median sale price for homes in Archuleta County during 2010, a decrease of 14 percent from 2009’s $263,225 median sale price.
While the median price of townhomes and condominiums decreased 10 percent in 2010 from the previous year, average prices actually rose 3 percent, reflecting the slight 8 percent in sales last year.
According to MLS data, total active listings for all types of residential properties throughout the county is 468, down from 785 in 2009.
Like the rest of the nation, however, the high number of foreclosed properties continues to drive down prices. Even though the PSAAR report stated that local foreclosures appear to be leveling off, there is currently a 37-month supply of single-family homes on the market with the same level of supply of condos and townhomes. The land inventory is estimated at 87 months, based on the absorption rate for the trailing 12 months.
While those depressed prices might not benefit sellers in the county who have gotten under water with their mortgage (i.e. the amount of their loan is more than the value of the property) or need to sell due to unfortunate financial circumstances, that environment has worked out well for several local Realtors — as indicated in the PSAAR report.
Realtor Jann Pitcher also suggested that 2011 holds promise, saying, “I’m cautiously optimistic, but I think we are seeing things turn around,” adding, “I’m not worried, we’re going to be fine.”
“I’m extremely optimistic about 2011,” said Realtor Juli Morelock. “I’m coming off a strong 2010, one of the best years I’ve had. We’re certainly seeing more people prepared to spend their money.”
Realtor Brent Christians agreed, saying, “It’s a great market for buyers,” but added that, “it’s just a matter of being realistic with sellers as far as being competitive.”
Morelock conceded that the local market does not parallel the national market and said, “We have our specialty niche here.”
In fact, all the Realtors interviewed for this story said that the vast majority of buyers who made 2010 a good year for real estate in the county are out-of-state clients looking for second homes or retirement homes.
Due to the economy, local buyers are apparently few and far between, a situation that does not bode well for sustained economic growth in the area. While second-home and retirement home buyers may help boost the local real estate market, those residents do not bring jobs or industry to the area — hardly a formula for long-term economic stability.
Heraty said that, while glad to see a positive direction in local real estate, more needs to be done to create an economic climate that benefits all residents of the county, not just those moving in to take advantage of depressed properties values and the Realtors who benefit from those sales.
In a statement released early this month, Heraty said, “How effectively our local leadership prioritizes, guides and governs in the next several years will have tremendous long term consequences for all of us. If we can improve our infrastructure and amenities and articulate a clear and positive path out ahead, people with money will be confident investing in our area. If on the other hand we flounder and wait and hope for some outside force to pull us out of the ditch, I am afraid we will be left far behind.”
Indeed, while the PSAAR report from last week presents a sanguine view of one sector of the economy, the subtext of the report suggests hard times for many local residents. Until local leadership addresses issues peripheral to a bustling real estate market, the county could continue to see a local economy that benefits a few outsiders and fewer insiders, while leaving the rest of the population behind.