June Marks Unofficial Start to Boating Season!

In the Durango area, June marks the unofficial start of one of our favorite times of the year—boating season! We have several options in our area—Vallecito, McPhee and Navajo lakes are within an hour’s drive from Durango, and we are blessed to have those spectacular lakes nearby.

Yet, a large number of people from Durango take advantage of Lake Powell, and the immaculate outdoor playground just within a short drive from Durango. Lake Powell appeals to all types of people. Of course, boaters enjoy the fishing, exploring, and watersports. Hikers may enjoy the desert terrain. Historians appreciate the glimpses of ancient Anasazi ruins. The large cliffs and beautiful sunsets allow the most spectacular scenery. Although this is a contrast to our mountain views in Durango, it is a beauty all its own. Words cannot convey the sense of awe at this beauty. The lake is 186 miles long with 2,000 miles of shoreline and 96 major canyons.

Most people go to either Halls Crossing in Utah or Page, Arizona. Halls Crossing is more remote, but is only a 3.5-4 hour drive from Durango. They have a small store, campground, and family units available for rent. A ferry is available to access Bullfrog, another marina with a hotel. Page is a bit further; however, Page offers hotels, restaurants, and stores as it is a small town (the marina is Wahweap). Many people even camp along the lake shore or houseboat all the way down the lake. Dangling Rope marina is on the lake, mid-way between Halls Crossing & Page.

I have spent many years of my life visiting Lake Powell. My mom & dad used to take me when I was a teenager, beginning in the late 60's, when it was still a dirt road into Halls Crossing.  When I returned to the area with my family we bought a boat for family activities. My kids grew up going to Lake Powell several times a year. We have camped, used a houseboat, stayed in a hotel, and rented the family units. We have had some of the best family memories at Lake Powell—the early morning ski runs and evening barbeques make Lake Powell trips the best summer vacations. My kids still fly home to go to the lake! We are so glad to live so close to this amazing lake.  In addition, our boating friendships run deep, and those memories are rehashed throughout the year.

Our first trip to Lake Powell is over the weekend of June 20-22, and boating anticipation has begun!

Check out the link for more information: http://www.lakepowell.com/

Pre-Qualification VS. Pre-Approval and Why the Difference is Important

In the home buying process, the majority of conversations tend to revolve around mortgage interest rates and capitalizing on the low rates. This makes sense, as current interest rates are just around or over 4%. This number is very low for historic averages.

However, understanding further details may aid the process of buying a home. Primarily, many get confused between “pre-qualification” and “pre-approval.” In short, pre-qualification is less formal. It includes discussing income, debt, and other financial pieces with a lender. At the end of the conversation, the lender will be able to estimate how much a person could receive in a loan. This is not a guarantee; rather, it is an estimate based on the information given.

Pre-approval is a step beyond pre-qualification. The pre-approval process actually verifies a person’s finances and credit score and goes through an underwriting process. A person must submit paystubs, tax returns, bank account statements, and W2s, along with other applicable financial documents. Upon completion of this and the mortgage application, the potential buyer receives a letter stating the pre-approval amount.

We find it helpful for potential buyers to complete the pre-approval process for a couple of reasons. First of all, knowing the amount a person may afford allows buyers to look at homes most suited for them. Instead of looking over or under a pre-approved price range, buyers may seriously consider homes in the correct price range. We have had situations where clients are pre-qualified for a certain amount, but after the pre-approval process, they realize they are actually approved for a higher-priced home, and of course, we have had clients that were looking at homes higher than they should consider. By obtaining pre-approval, buyers may maximize the time looking at well-matched properties, and minimize the time waiting for a loan approval in this scenario.

Additionally, obtaining pre-approval places a buyer in a stronger position. For example, if a seller receives two similar offers, one of which is pre-qualified, and one is pre-approved, the likelihood is that the seller will select the pre-approved offer, as it is more secure. The closer an offer is to the approval process, the stronger it becomes.  The highest quality offer is a cash offer, without a loan approval contingency, the pre-approval is the next best thing.

In general, understanding these differences allows buyers to navigate the process of buying a property more smoothly. It also allows sellers to identify the differences between potential offers.

The importance of the interest rate is significant. The general rule of thumb is that a 1 percent interest rate increase results in 10% lower purchase power. As interest rates remain at an all-time low, the lending process is important to understand, as it plays such an impact on buying a home and allows buyers to maximize their purchase price.

May Sales Reflect Growth

This week we received the final May transaction numbers for La Plata County.  May was a great month for La Plata County Real Estate.

Most notably, the number of transactions has increased, both in comparison to this April and compared to May of 2013. In April this year, La Plata County had a total of 72 sales; May this year closed with 113 transactions. Last May we saw 102 total sales.

In terms of the year to date total transactions, we are closely tracking with 2013 numbers. At this point last year, we had 361 total closed transactions; currently we sit at 351. A 10 transaction gap is minimal in the bigger real estate picture. With the slower start in January and February this year, we are encouraged by the last couple of months and the close year over year numbers.

The average sales price ($384,815) and median sales price ($329,000) are both higher than 2013 numbers at this point, which is a hopeful direction for the remainder of the year.

The Durango In-Town market for all types of residential properties was up one home sale over last year (total 35), but the median price was up to $368,233 from $343,000 last year.  Likewise, the Durango Rural Market (all properties outside of the City limits & up to 35 acres) had an increase of 5 home sales and a median price increase from $379,000 to $465,000.  With only one month totals we need to be very careful about speculating on the numbers.  For example, when we look at a median price for all of La Plata County for the last 12 months, the median price is only up about 1% as compared to the end of the calendar year of 2013.

While the median prices in La Plata County still lag behind some of our feeder markets (Arizona, Colorado Front Range, California as well as the strong economy in Texas), we are encouraged by the growth in our area.

The May numbers were an encouragement, following the slow start of the 2014. Overall, as we see the increase in total May sales as well as the higher median and average sales prices, we remain positive about a solid real estate market, comparable and a bit  better than last year.

Animas River Days Makes a Splash This Weekend

Summer is here! This weekend kicks off the annual Animas River Days Celebration. Starting Wednesday, we go through the weekend with intense, lighthearted, and relaxing events focused on our river. At its core, Animas River Days exists to enjoy the recreation the Animas River offers in Durango.

A recent $1.3 million dollar reconstruction of the Durango’s Whitewater Park will allow enthusiasts to enjoy the new nuances in the river. The reconfigured rapids present a new landscape for water enjoyment, and new challenges for those who have spent so much time on the Animas.

Some of the events include: a paddle board race, a slalom race, downriver inflatable relay race, dog fetching contest, live music, vendors, and movies.

More unique recreational events also occur. One of the local traditions is a river parade, complete with costumes! Also, there is an inflatable rodeo, where contestants ride the rapids with inflatable alligators, duckies, and rafts. Of course, the more traditional whitewater events include the Smelter Smackdown (race against Durango Women’s whitewater raft team), freestyle kayaking, and a downriver kayak race.

This festival is the perfect weekend activity for participants or spectators. The Animas River is a heritage and draw in our town. We are blessed to have this natural resource and outdoor playground for our enjoyment. Have fun celebrating it this weekend!

Check the website for the schedule and locations of events: http://www.animasriverdays.org/

Local Hot Springs Offer Soak Relaxing Getaways

One of the most unique experiences in Four Corners is the natural hot springs through the area. In Durango and several of the surrounding towns, natural hot springs have been converted into pools and resorts for guests to enjoy soaking. In Durango, visitors may enjoy Trimble Hot Springs (north of town in Hermosa), and Pagosa Springs and Ouray each feature hot springs. Additionally, for the more adventurous, Ridgeway features a clothing optional location at Orvis hot springs.

Most of these hot springs have been utilized for hundreds of years, as the Native Americans discovered and utilized them. Some people find the natural waters provide health benefits, as they are saturated with minerals. Supposedly the natural waters provide defenses against fatigue, insomnia, and poor circulation, amongst other benefits. Some even drink the waters, but that is only recommended with caution.

Each of these locations features specific benefits, but all of them offer exceptional Colorado views and the ability to relax and enjoy a stress-free soak in warm waters. In the winter time, a dip in the springs is invigorating, especially after an action-packed day on the slopes. In the summer, guests may enjoy the outside more—some of the locations offer picnic spots and cold swimming pools. Some of them even offer onsite lodging, so a true getaway and spa experience may occur.

The water in these springs is derived from the underground springs. In general, the temperature is controlled by the volume of water flowing to the pools. Different pools at these locations offer different temperatures to create a more complete experience.

We have loved visiting some of these hot springs over the years. They have been fun family activities—either day trips or quick mini getaways. It is so amazing to see these hot springs in full use, and to enjoy the naturally warm water. They are perfect for kids and adults alike!

Real Estate As An Investment

Many people wonder if real estate investments yield a return. While many scenarios occur in which real estate may be purchased, a featured Durango Herald article highlights utilizing an IRA (Individual Retirement Account). 

http://durangoherald.com/article/20140518/NEWS04/140519639/-1/realestate/Using-IRAs-for-real-estate-investment- 

As an overview, the general rule of thumb for residential real estate investments is to put 25% of the home price down, and to obtain a mortgage for the remaining 75%. For example, a Crimson Cliff home is currently listed at $369,900. In this scenario, a person would put down $92,475, and mortgage the remaining $277,425. A 30 year mortgage for this amount, at 4.5% interest, results in a $1,400.42 monthly payment on the principal and interest. This home would likely rent for $1,700 per month. At the beginning of the investment, a person may break even (when taxes, HOA fees, and insurance are factored into the equation). However, as time goes on, the mortgage is paid down and the gross rent becomes a profit. In other situations, a cash purchase in this scenario would result in a 4.5% return on investment through the rental income.

In terms of appreciation, the below chart outlines historic trends in home appreciation for residential in-town Durango homes. The median price averages a 4.43% growth, and the average sales price has increased 5.45% annually. Although real estate will fluctuate over time, the overall trends projects up.

When we look at the potential return from rental income (estimate 4.5%) along with the average appreciation (estimate 5.5%) in Durango, we see an approximate 10% return on investment! This is a substantial amount. 

As referenced earlier, the Durango Herald article describes utilizing an IRA for real estate investment; see below for further information. Please let us know if we are able to assist with understanding real estate investments. 

Durango Farmers Market Produces Food, Fun, and Festivities

On summer Saturday mornings, the First National Bank parking lot becomes a festive party. The Durango Farmers Market is a local favorite with something for everybody. May 10 through September 27, local vendors showcase their products and talents.

From local honey to fresh produce, and homemade pastries to local meats, the Farmers market features some of the best items grown and produced in our area. Other treats include: cheeses, flowers, fruits, herbs, tamales, candles, pottery, face painting for kids, coffee, smoothies, and more. They require the products to be grown or gathered in La Plata, Montezuma, Archuleta, Colorado San Juan or New Mexico San Juan counties. Visitors will enjoy talking with the artists and farmers/ranchers themselves to learn more about the practices and methods involved in the product preparation.

It is such a blast to spend a Saturday morning at the Market. Live music fills the air, and a person can walk around with a pastry or cup of coffee. Of course, so many locals go to the Farmers Market, which makes it fun to chat with friends while there.

Special events also occur throughout the year. They will offer an Iron Horse Chef competition, the Tour de Farms, and Thanksgiving and Christmas Farmers markets.

If you are looking for a fun way to spend a Saturday morning and support the local community, check out the Durango Farmers Market. It is located in the First National Bank parking lot (259 West 9^th Street), and is open from 9 until noon. Here is their website for additional information: http://www.durangofarmersmarket.com/