Experience Fall with a Color Drive

Fall is here! As of September 22, we have officially been in the fall season, and if you haven't already made a fall color drive, now is the time.

With the recent storms, there’s some snow in the high country. Now is a great time to get in a drive to see the fall colors before the snow comes more consistently. In our area, the fall trees are some of the most spectacular sights! A person doesn’t even have to go far to see the mountains take on a new view.

We love to go towards Mancos, and see the colors out there. The variety in terrain tends to offer a gorgeous sight. The oaks and aspens usually make the most beautiful array of colors. Jersey Jim is one of our favorite destinations, and hiking at places like Sharkstooth offers a great way to enjoy the scenery. Of course, the Million Dollar Highway--through Silverton and Ouray—is another great way to see parts of Southwest Colorado and take a perfect day trip.

Nothing celebrates the perfect fall day like a drive through the mountains, easy hike, and picnic. It’s a great way to unplug for the day and appreciate the natural beauty surrounding us. Colorado often makes the top lists for places to experience fall. How fortunate that this is our own backyard!

Ever Need a Vacation After Your Vacation?

This week we want to take the opportunity to focus on some of the realizations that arise out of unique and unexpected circumstances. Max and Katie Hutcheson took their three kids, his parents, and father in law to Cabo last week for a relaxing getaway. His mom just wanted to sit by the pool and enjoy an umbrella drink!

After a half day of vacation, Hurricane Odile came upon them. At the beginning, they were able to stay in their rooms, and they were even able to go out to dinner. After the kids went back to the room with Max’s parents, they went to the lobby bar. At that point, they were told to go into the third floor conference room with the rest of the guests for shelter. They got the kids and stayed in the conference room for about 12 hours. Although it was very uncomfortable, the danger did not feel extremely imminent. Several scary sounds occurred—namely a loud crash, which was the tennis court from the neighboring hotel being uprooted and landing on the roof of their hotel. Several people in other hotels were forced to wait out the storm in bathrooms or stairwells.

After the storm, the challenge became getting out of Cabo. With thousands of people being evacuated, the airport was crazy. The Mexican government actually decided on evacuation plans—they sent Katie, his mom, and the kids to Guadalajara on a military jet; they were then able to connect to Houston. He, his dad, and father in law got on a later flight to Mazatlán. From there, someone from the American Embassy coordinated flights to the states. They took Alaska Air to San Diego, where they were given complimentary hotel vouchers. Considering they were not even originally booked on Alaska Air, this well-run company stood out immensely.

Finally, the family all reunited in Denver on Thursday, and returned to Durango on Friday.

Max says throughout all of this uncertainty, he is amazed at the care the Mexican people and hotel employees showed to their family, especially the kids. Everyone was concerned about the kids’ well-being, and making sure they were evacuated first. The government made a point to evacuate the tourists, knowing that the repair and devastation would remain to rebuild. Alaska Airlines went so far above and beyond expectation to aid the weary travelers; it was refreshing in the midst of this difficulty.

Our thoughts and Prayers are going out to the Baja locals who were not given the opportunity to leave. They are still there trying to restore the basic water and electrical services we enjoy every day. Max and his Family look forward to heading back to Cabo soon, this is one way to help them rebuild. Tourism is the lifeblood of the area and going back puts money back into their pockets. Also, they look forward to thanking all of the people that kept them safe, and helped them get home!     

Anytime situations like this bring unexpected circumstances, it causes us to reflect on the blessings of our lives and the small details that make a difference in the outcome. In this situation the people who helped Max’s family made the best of these awful circumstances. Max and his family returned to Durango with a greater appreciation for each other, and a gratefulness for all the people who worked together to overcome these difficulties. What a great reminder of what we hold close to us, and to look at the bigger picture of life. Welcome back, Max and family!

Fall Blaze and Bikes-N-Bands Bash this Weekend!

This weekend Durango looks forward to the Fall Blaze, the annual cycling event for Fort Lewis cycling. It will actually be a part of the Durango Bikes-n-Bands bash, a day long festival with bike rides and music.

At 8 am, the Blaze race begins. There are three route options for the Fall Blaze: 37, 60, and 100 miles. All riders will ride the Shalona Hill Loop, and the respective longer rides extend the routes. The initial loop takes riders through some of the most beautiful areas in the county—CR 550 and CR 250. The longer rides feature Helen’s Store, and the longest ride features Vallecito and Bayfield, and Florida Mesa. Of course the terrain varies and the elevation changes, so cyclists will have a rewarding challenge upon completing the course.

There will be a Blaze lunch following the ride, with a potato bar and local brews from Ska and Steamworks, as well as Coca Cola drinks. The Bikes and Band bash will have music and festivities through the afternoon; this fundraiser supports the FLC cycling team, Trails 2000, DEVO, and Durango Daybreak Rotary. Other activities include relays, a vintage bike show, a bike toss, and cyclocross races. The Blaze benefits the Cycling Scholarship Fund at Fort Lewis College.

The Fall Blaze and Bikes-n-Bands bash will be a great way to spend a Saturday. Even if you are not up for any of the rides, come check out the music and activities. Events will be held at The Fort Lewis Center for Southwest Studies and Concert Hall portico.

The Benefits Of 1031 Exchanges

The  Internal Revenue Service provides a special provision for real estate investors called Internal Revenue Code 1031 exchanges (1031 Exchanges).  These exchanges allow the potential for an investor to sell one investment property and purchase another one, and to defer the taxes into the next property.  These 1031 exchanges are very popular when there is significant equity in the property to be sold, and with large gains that can be deferred.  The ramifications of this are extensive—instead of paying capital gains taxes each time an investment property sells, a person has the freedom to defer the capital gains taxes and allow growth on the investment.  Investment properties can be exchanged from one into the next, throughout a persons life. When investors understand the benefits within the IRS tax code,  they may more strategically invest in real estate and minimize the amounts of taxes paid.

As the real estate market continues to rebound after the recent difficult years, we are once again seeing 1031 exchanges utilized more often. Recently, we represented clients who sold a commercial property in California, and replaced it with a number of residential homes in Durango.  These investment homes will provide their income for retirement, and they were able to fully utilize their 1031 exchange, and defer the taxes into the residential properties.  Under the 1031 provision, the IRS allows a person to defer taxes when a property is sold and another in "like kind" is purchased. Generally, real estate transactions will be “like kind” to one another. Just like above, commercial can be exchanged into residential, or it could have been exchanged into vacant land.  A few caveats exist; for example, a property within the United States is not “like kind” to a property outside the United States.

A neutral third party, called a Qualified Intermediary, facilitates the transfer of the exchanges. We have utilized Cooney & Associates locally, and Tim Cooney is an expert on 1031 exchanges.  He combines his knowledge as an accountant, as well as his experience with 1031 exchanges.  We have also referred CLX Exchange Accommodators, and they have been successfully handling 1031 exchanges in Durango since 1991, and Rob Ptolemy is a Certified Exchange Specialist (CES). There are many choices for Qualified Intermediaries, and a person should investigate the knowledge and experience, before making a commitment.

In order to apply section 1031, an investor must identify the new property within 45 days of the sale of the original property, and their Qualified Intermediary can help them with the rules on numbers of designated properties.  The transaction must be completed within 180 days of the sale (or the tax return deadline of the year the relinquished property was sold, whichever is first). Additionally, the new property must be of equal or greater value than the current property to have full deferral of taxes, and all funds from the relinquished property sale must be used to have a full deferral.  

When making key investment decisions, a qualified accountant should absolutely be consulted, and discussions should begin early with the Qualified Intermediary.  In addition, your Realtor® can help assess the benefits of one real estate investment versus others.

Where Is The Fall Market?

Where is the fall market?  That is the question you are probably asking, and the one we are asking as well.  It is normal to have a "shoulder season" between the end of summer and the beginning of fall, but the showing activity, contract activity, and even the phones in the office have been very quiet.  We are hoping to see that change soon!  On a positive note, we have several buyers coming into town in the next week, and if this is true for other Realtors® in the County, it may point to the beginning of the fall market.

In the chart below, you will see the history of residential and commercial sales since 2005, and a comparison between 2013 and 2014  statistics (January 1-September 15).  There is also a comparison of the three real estate segments, 1) Residential, 2) Land, and 3) Commercial.  Within those three segments, we note the strength of the market in the residential segment. Approximately 81% of the total transactions in the past year have occurred in the residential market. Nearly 87% of the total market volume has also occurred in the residential market. We also see a current growth in the commercial segment thus far in 2014 (compared to January 1-September 15, 2013); however, commercial median prices tend to be more driven on the mix of properties sold.

When we look at previous years, we see the steady increase year over year through 2013. Since 2009, the total number of transactions has steadily increased. As we have reported, the market has clearly leveled off, and dropped a little, but it remains a strong market. 

The fall is a time for harvesting, and we hope to see this real estate market continue to be robust, and provide the means for our clients to be successful with their plans.  It should also be noted that it is common for a few of the more expensive homes and properties to sell in the fall, as the profile of the fall buyer tends to be more to the "baby boomers", with grown children, and some have a higher capacity to purchase.