FLOOD INSURANCE: What is a Flood? Flood insurance covers direct physical loss caused by "flood." In simple terms, a flood is an excess of water on land that is normally dry. Here's the official definition used by the National Flood Insurance Program:

A flood is "A general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or two or more properties (at least one of which is your property) from:

** Overflow of inland or tidal waters;

** Unusual and rapid accumulation or runoff of surface waters from any source;

** Mudflow*, or

** Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above."

* Mudflow is defined as "A river of liquid and flowing mud on the surface of normally dry land areas, as when earth is carried by a current of water..."


Who Must Maintain Flood Insurance?

Anyone who purchases a home in a designated 100 year flood plain AND borrows money from a Federally Insured Lender using the property as collateral must furnish evidence of flood insurance to the lender.

Also, as many of our friends and neighbors found out after the Missionary Ridge and Valley fires in 2002, flood insurance is vital in offsetting losses incurred as a result of the mud slides experienced thereafter.

We encourage anyone living and a designated flood plain or mud slide prone area to investigate flood insurance. It can be purchased through your local insurance agent and is underwritten by the national Flood Insurance Program, a Division of FEMA.

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CONSERVANCY: Everyone in Southwest Colorado owes his or her livelihood and well-being, either directly or indirectly, to our rich and diverse open lands. Few residents would be prospering today if there were no farms and ranches, no wildlife, no scenic open space and no tourist economy. It is vital that we work together to preserve our remaining open lands.

We all know that our population will continue to grow. The challenge, for all of us, is to accept and channel growth in a healthy way. The La Plata Open Space Conservancy guides growth by working in partnership with private landowners to protect our most productive and most beautiful lands from development, by means of donated conservation easements. This kind of land conservation costs the taxpayers nothing for land acquisition and management, but it provides enormous public benefits. Additionally, landowners who donate conservation easements may claim tax benefits that they can often use within the community. Land conservation is good business and it's good for business. (Sounds crazy coming from a Realtor, right?)

Last year twenty landowners partnered with La Plata Open Space to protect productive farms and ranches, wildlife habitat, scenic open space, archaeological sites, watershed and public recreation using conservation easements. Thanks to their gifts, these lands will not change next month, next year, or ever. They will continue to provide the myriad of benefits that make ours a healthy and beautiful community. These donations will inspire new conservation projects that will cumulatively benefit the community even more. Last year's donations raised the number of La Plata Open Space's protected properties to 146 totaling 17,375 acres.

Private land conservation isn't free, however and La Plata Open Space needs your help. Their operations are funded primarily by individual membership contributions, event proceeds and occasionally small grants. To be a part of this worthwhile movement send donations to:

La Plata Open Space Conservancy
P.O. Box 1651
Durango, CO 81302

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DURANGO: Yesterday we talked about the slow down in the national real estate market. In today's Durango Herald the Durango Area Association of Realtors released their second quarter statistics. The number of homes sold in Durango is down 40% from the same period last. The number of homes sold in Bayfield increased slightly reflecting the lower cost of housing in Bayfield.

The median home price in Durango continues to increase. But again, we believe, as the market cools and properties sit longer and longer sellers will adjust to be competitive. This is not all bad. It's hard to justify much less sustain a 20% to 25% increase in housing cost year after year. Sometimes the market just needs to take a breather.

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IT'S OFFICIAL: The National Association of Realtors (NAR) says we are now in a buyer's market in housing as a soaring supply of homes for sale means nearly flat prices and longer waits for sellers. The news came in the NAR's report for June, which showed that home sales fell to the slowest pace since January while price gains were the smallest in over a decade.

We noted in a previous post that sales in our area were slowing down with homes and land sitting on the market for longer periods. While we haven't seen a major reduction in pricing, it is only a matter of time until sellers recognize they need to be more competitive in their pricing given the rise in housing inventories should this trend continue.

While this may be a tough pill for sellers to swallow, it should be good news for those shopping for a home. We have recently seen many individuals squeezed out of our market due to the rapid price increases over the last 2- 3 years. That could be changing!

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BP: It is BP's policy to seek a Surface Use Agreement (SUA) with affected landowners for all new wells. In La Plata County, the company plans to drill new 80 acre infill wells from existing wellpads wherever possible. This modern approach to resource development will help keep impacts from BP's operations on neighbors to a minimum.

As part of this new approach, BP will offer owners of properties on which an 80 acre infill well is to be drilled a one-time, cash payment as part of the surface use agreement.

For the approximately 150 remaining 160 acre wells that BP has identified as suitable for development, the company will seek an agreement with the landowner that offers a one-time cash payment that is two and a half times larger than the cash offer for an 80 acre well on an existing wellpad. In developing a new 160 acre well, BP will most likely have to construct a new wellpad, access road and service pipelines.

Typically, such new wellpads disturb an area of about four-fifths of an acre. The company will discuss with the landowner possible locations for the wellpad taking into account factors such a ground contours and ongoing agricultural activities.

BP's landowner payment and surface use agreement are part of a process that is transparent and consistent for all landowners. In the event BP and the landowner are unable to reach an agreement, BP may find it necessary to seek a permit to drill through the state's regulatory process. In such cases, BP will still offer a cash payment, smaller than the original offer, to the landowner as a show of good faith.

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GROWTH & TRAFFIC: As our area grows so does our traffic problems. As a result, expect to see more roundabouts on our streets in the Durango area. Several of these circular traffic-calming devices are planned to be installed in the near future.

Later this summer or in early fall, a roundabout will direct traffic at Goeglein Gulch Road and Fort Lewis Drive. One was installed recently near Mercy Regional Medical Center and two more are planned there. And a roundabout has been proposed in Bayfield where U.S. Highway 160B and CR 521 (Buck Highway) intersect.

Roundabouts are generally installed to slow traffic but not stop it and provide for a greater capacity that traffic signals. They reduce collisions by slowing drivers and eliminating some conflicting traffic, such as lift hand turns.

Still, all that being said, they're annoying!

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PRICES: We've visited with real estate brokers we know from coast to coast. They all share a common view. Prices are coming down. San Diego is down 40% as is Florida. Los Angeles is even worse. Does this national trend affect us? Sure it does. Our real estate market, in large part, has been supported by the ability of people in large metropolitan markets to borrow on their home's equity to purchase vacation or investment properties in Durango and the surrounding area. This source of funding is drying up - fast. We're feeling its effect locally. Over the last several days we have received at least two dozen emails from brokers notifying us of price reductions on their listings. Because Durango is a unique and special place we don't foresee a major downturn here; but it is increasingly obvious that the days of 20% annual value increases are over (at least for now.)

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LIFESTYLE: This post is not about real estate, it's about lifestyle and why Durango is the perfect place to be. Last night Ricky Skaggs and his band, Kentucky Thunder, played to a full house at the Fort Lewis Concert Hall. What incredible talents they are; showcasing probably the best bluegrass music this area has ever heard. After Durango, they were headed to Denver. It's a guarantee that the people of Denver will not get as up close and personal as our local venue. We are fortunate, throughout the year, to have major artists in all genre' stop by Durango, share in our area's beauty, culture and allow us to enjoy their talents. Even the stars love Durango!

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NATURAL GAS & YOU: In considering the purchase of a property in La Plata County, it is important to investigate the real estate listing and prior deeds to find out the exact nature of mineral ownership interests. Often, different parties own the surface and the subsurface. This is commonly referred to as "severed estate" land. Most of the property in La Plata has been severed. Previous owners may have sold the mineral rights or granted right-or-ways or easements that are transferred with the property. Because of the long history of natural gas activity in La Plata County severed estates, easements and right-of-ways are common on property in our area.

Well established Colorado law recognizes that access to the mineral estate from the surface estate is necessary in order to develop natural resources. The law provides for access to the mineral estate by allowing "reasonable use" of the surface. The Colorado Oil and Gas conservation Commission (COGCC) rules require surface owner consultation and strongly recommend that a surface agreement be negotiated, in good faith, with a surface owner prior to granting a drilling permit. Over 99% of all wells in La Plata County have utilized surface owner negotiations to decide well locations, road use, road and pipeline construction, fencing, crop reclamation, etc. If a surface agreement cannot be successfully negotiated the COGCC rules allow for a surface bond to be posted with the state. The bond is intended to protect the surface owner from "unreasonable crop losses or land damages from the use of the premises" --not for perceived economic loss associated with mineral owner access.

There are hundred of miles of roads constructed as part of an oil and gas lease after companies negotiated and paid for easements with landowners, if required. Known as "lease roads," they are maintained by the industry but often may be utilized by residents living in the area. Companies do not routinely remove snow if access to facilities is not necessary. Generally, companies do repair road damage caused by construction as soon as weather and equipment availability allow. Most companies are willing to work with residents to make lease road conditions acceptable, however, there is no guarantee that a lease road will be accessible to passenger vehicles.

Due diligence is mandatory when purchasing any property and that's where we can help. Call or email us if we can assist you.

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