March 31, 2008

Greetings

As this is the end of the first quarter, I’m enclosing the market results compared to the same period in 2007. I will be e-mailing my quarterly letters from now on, in the hopes of saving paper and that this
is more convenient for you. If you change your e-mail address, please let me know so I can continue to keep you informed about the Pagosa real estate market. 

With the slowing economy, I’m happy to report that listing prices and selling prices continue to rise. The days on market have gone up because of the inventory we have. The disproportionate numbers for commercial figures are due to a commercial property I was happy to sell. With this surprisingly good news, I still think we will continue to experience a soft market for quite a while.

Here’s a few things to think about:

1. It’s an election year. History shows buyers tend to stay status-quo
during an election year until things “shake out”. 

2. The mortgage industry is in its greatest turmoil since the savings
and loan debacle of the 80’s. Conservative loan to value (80% loan
to 20% down payment)l loans and good credit will be the only loans
for the foreseeable future. Gone are the days of exotic or 100%
mortgage programs. You actually need to be able to afford the home
you’re buying. What a concept!

3. Baby boomers, who were in large part responsible for the real
estate boom, are also going to be responsible for a lagging market
over the next 2 decades. They will want to trade in the big, high
maintenance home for a smaller, quality built, no maintenance life-
style in warmer climes. My research shows when boomers hit age
65-75, (starting in 2011) there will be 3 sellers for every buyer. You
would think if Boomers are selling big houses, they would need to
buy another and the market would not be that effected. Not true.
Most boomers who own larger homes already have a second, smaller
home in which they can move into. 

4. Locally, the county and town still have their head in the sand
when it comes to tax incentives to encourage new business or pro-
mote development which creates jobs. It was like this when I arrived
in 1985 and it hasn’t changed.  Pagosans are putting pressure on
local governments like never before, so we may see some positive
changes being made, particularly with the recent new town board
members. When I say “promote development”, do not take that to
mean housing developments. I’m speaking of commercial, business
or warehouse developments that will provide decent wages and
benefits. Our existing supply of homes and land is too inflated to encourage new housing development. New home construction tends to hurt pre-existing homes sales . 

Am I a pessimist? No. A realist.

This doesn’t mean you shouldn’t have a good part of your assets in real estate. As always, sound decisions are based on facts. Hopefully I can provide you with the data you need to make wise decisions.

At this juncture, you could say it’s a buyer’s market because of the inflated inventory and historically low interest rates. It is ALWAYS a seller’s market if sellers price their properties to sell at market prices. Call me if you want more facts about your particular situation. 

As tax time is around the corner, I thought I might remind you of some deductions and consequences you might have if you have bought or sold real estate in 2007.

1. If you have sold your primary home in which you occupied 24 of the last 60 months, you might qualify for an exemption of $250,000, or up to $500,000 for a married couple filing a joint return.
   
2. Any costs pertaining to the sale of property such as taxes, title insurance, commissions, mortgage interest and closing costs are deductible.
3. If you sell real estate in excess of $100,000 in Colorado which is not your primary residence and move out of state, Colorado will expect to collect 2% of  your sales price either at closing or by filing a state return. If you think you will be effected by this in the near future, please contact your accountant.
4. Don’t forget to contact your mortgage company after closing to collect any insurance and tax reserves you may have coming to you from escrow.

Please let me know how I can help you with any of your real estate needs.

Kindest regards,

JoAnn Laird ABR, CRS, GRI, SRES
Broker Associate
Mobile: 970.  946.9700                     
Toll-free: 888. 202.1222        
Office: 970. 264.1250                        
www.JoAnnLaird.com
e-mail:joann@joannlaird.com

Residential	Closed Listings: Average List Price: Average Selling Price: Average Days on Market:	3% $344,080 7.8% $315,583 5.2% 19%
Commercial	Closed Listings: Average List Price: Average Selling Price: Average Days on Market:	42% $609,692 156% $514,875 180% 47%
Building Sites (all vacant land, regardless of size)	Closed Listings: Average List Price: Average Selling Price: Average Days on Market:	64% $117,484 20% $100,560 27% 1%