BAYFIELD: Town staff members and affordable housing advocates believe the town of Bayfield's efforts to increase the supply of moderately priced homes could also provide a financial boost to help solve the town's sewage treatment problems.

As we have previously noted, Bayfield's sewage treatment plant has been overburdened for several months, which led town staff in February to impose a strict approval process on sewer taps for new construction. A new plant is expected to cost almost $7 million. Efforts are currently under way to improve the existing system and some success is being seen.

Town Manager Justin Clifton said, "Our number one priority right now is to lift the tap restrictions, and the only way to do that right now is to improve the current facility. The money can only come from tap sales, so were not going to dip into the capital funds or taxpayer dollars to do it." He also said the will propose an increase in sewer tap fees to the town's Sanitation Board.

Stay tuned. This story isn't over yet!

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WATER RIGHTS: We find that one of the most confusing things for newcomers to our area to grasp is Colorado water law. Since the 1860s, The Colorado Doctrine has defined the four essential principles of Colorado water law:

1. All surface and ground water in Colorado is a public resource for benefical use by publicagencies and private persons.

2. A water right is a right to use a portion of the public's water resources.

3. Water rights owners may build facilities on the lands of others to divert, extract or movewater from a stream or aquifer to its place of use.

4. Water rights owners may use streams or aquifers for the transportaion and storage of water.

Practical application of The Colorado Doctrine means that water can be moved from where it is found to where it is needed based upon a priority system of "first in time, first in right." People, with water rights, who live along the river usually have diversions from the river to their lands. Away from the river, landowners are dependent upon irrigation ditches to deliver their water.

The irrigation ditches are mutually-owned non-profit corporations established to deliver water to owners. Each ditch company has a board of directors, a secretary to handle the office business, and a ditch rider who controls the actual water flow. Operations are based on the by-laws of each ditch company and by Colorado corporate law.

We'll discuss more water facts and issues in future postings. In the meantime, if you have questions or would like additional information about Durango real estate please give us a call or email.

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REVERSE 1031 EXCHANGE: The IRS code also provides for a "reverse exchange." As a matter of fact, Mary & I just completed a reverse 1031 exchange. The basics are the same as a regular 1031 except in a reverse the individual acquires the new property up front. From the day of closing you have 45 days to announce the property or properties that will be relinquished (sold) and 180 days to complete the sale to remain within the "safe harbour" period. The primary difference in a "regular" and "reverse" 1031 exchange is in a regular exchange you MUST complete the exchange within the 180 day safe harbour period. A reverse exchange still has the 180 day safe harbour period but experts tell me, to the best of their knowledge, the IRS has never looked at a reverse exchange that went beyond the 180 day period.

This should not be construed as providing tax or legal advice. If tax or legal advice is needed, please consult your attorney or accountant. Or, we can put you in touch with a "Qualified Intermediary" in Durango.

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TAX DEFERRED EXCHANGES: Internal Revenue Code Section 1031 states: "No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment." This code provides that capital gains taxes are deferred when investment real estate is exchanged rather than sold.

Over the long term, acquiring real estate through exchanges is an excellent method of building wealth. Section 1031 allows continued exchanges, enabling the owner to increase equity without the burden of capital gains tax. We've seen a lot of real estate investment dollars move to the Durango area via 1031 Exchanges.

Important items involved in a 1031 Exchange:

- Both your old property and new property must qualify as 1031 property.

- You have 45 days after the closing to prepare a list of properties you want to buy.

- You have 180 days after the closing to acquire one or more of the properties on your 45 daylist.

- You may NOT touch the money. Typically the money is held by a "Qualified Intermediary"

- The holder of title to both your old property and your new property have to be the same.

- In general, you must equalize the debt on your old and new property.

This should not be construed as providing tax or legal advice. If tax or legal advice is needed, please consult your attorney or accountant. Or, we can put you in touch with a "Qualified Intermediary" in Durango.

http://HomesInDurango.com / http://DurangoRealEstate.biz

SOLAR POWER: Solar panels on the roof might be an outside sign of environmental consciousness, but most people can do a lot more good in humble ways, a solar power expert says.

"Where homeowners will do the most good is investing in energy efficiency," said Diane Mee of Hesperus, who helps her husband, Art Evans, run Sunland Renewable Energy Systems. The company installs solar electricity and hot-water systems.

She recommends investing in insulation and better windows. And she rails against "phantom loads" - devices that consume power all day, even though they're turned off. Televisions draw power as they wait for a signal from the remote control. Microwaves, coffee pots, stereos, computers and phone chargers all draw power too. Together they add up.

"We can shut down a couple of coal power plants if everybody in the country got rid of their phantom loads," Mee said.

Of course, that's not going to happen but if each of us were to work towards just conserving a little it will help.

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HOME-AID: A Denver based homeless assistance group is looking to expand into La Plata County with the help of local builders and the La Plata County Regional Housing Authority.

HomeAid Colorado facilitates agreements between builders and social-care providers to provide housing for the temporarily homeless. Volunteers of America and Housing Solutions of the Southwest are the proposed local service providers, with Emil Wanatka with Timberline Builders spearheading the efforts of local homebuilders.

"This is a wonderful opportunity to have a public-private partnership," housing authority Executive Director Jennifer Lopez said in a news release. "I think having the support of a local homebuilder working with Housing Solutions to explore options for expanding transitional housing options is an exciting opportunity for the community."

In the release, Lora Sholes, homeless services manager for Housing Solutions, said her agency can handle only half of the cases in a year compared with the need for such services.

"We really could use additional transitional units in La Plata County," Sholes said. "On any given day, there are 30 families waiting to enter the program."

Sholes said her program aims to assist in-need families in their transition from homelessness to self-sufficiency within two years.

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RIDE SHARE: Alternative transportation in La Plata County got a leg up this week. A regional website designed to connect individuals who need rides with individuals willing to share their vehicle is now up and running. Known as the Ride Share Program, the service actually began in the late 1990s but has been dormant for the last several years.

The Safe Roads Coalition, a grassroots La Plata County group that promotes positive relationships among all road users, will monitor the website that will serve people throughout Southwest Colorado.

"With higher gas prices, crowded roads and a more dispersed population, we know there is a demand for this service," said Kendra Holmes, a Safe Roads Coalition member.

The website http://www.freerideshare.org/ contains a simple form that will match your transportation inquiry to other users. No personal information will be made available, and e-mail addresses will link potential riders. Work is underway to help seniors and those without Internet access to use the program.

Partners in the program include KDUR Public Radio, Region 9 Economic Development District, CDOT, San Juan Resource Conservation District, and the Safe Roads Coalition.

Ride Share is but another example of how the citizens in our community work together to keep Durango the best place to live in the U.S.

DURANGO: Durango earned a new honor this week. The city has been added to the National Trust for Historic Preservation's 2007 list of America's Dozen Distictive Destinations." The list honors "lovingly preserved" communities in the United States.

"This is truly a community award," said Rod Barker, owner of the Strater Hotel, "Dozens and dozens of people have worked and continue to work tirelessly to sustain Durango and ensure that it remains a very special place. Congratulations, Durango - you all earned this award."

Durango was selected from 63 destinations in 27 states, For Durango, representatives from the Durango Business Improvement District/City of Durango - Barker, Bob Kunkel and Indiana Reed - assembled the application. The team received the news in late February but it was "embargoed" from sharing it with the town until the national announcement on March 7.

In addition to scenic beauty, Durango was cited for its vibrant, historic downtown, including preservation of Victorian structures and efforts to keep downtown economically viable. The Trust also applauded the Durango & Silverton Narrow Gauge Railroad and the Ancestral Puebloan heritage in the region, as well as the abundant outdoor, recreational activities.

"More than 100 years ago, the lure of gold and silver attracted the earliest prospectors to Durango," said Richard Moe, the group's president. "Today, visitors come to this spectacular, unspoiled mountain town because Durango had the good sense to hang on to what makes it so special. The result is a vibrant community that offers travelers an ideal retreat."

You can be a part of this wonderful community. To learn more visit our websites http://HomesInDurango.com and http://DurangoRealEstate.biz.

FORECLOSURES: The number of foreclosures started in Colorado in 2006 is more than double the levels recorded in 2003 according to the Colorado Division of Housing. Most of the foreclosures are in the more heavily populated Front Range counties.

The story is different on the Western Slope, where Mesa and La Plata counties saw foreclosures decline last year compared to 2005. We had 50 foreclosures in 2006 in La Plata county, a decline of 15.3 %. This is another indication that our local economy remains strong.

BAYFIELD: Once again the Bayfield town trustees have restricted the issuance of new sewer taps. Faced with an overburdened sewage treatment facility, the restrictions were put in place at the February 22 Town Board meeting and avoided a moratorium being imposed by the Colorado Department of Public Health.

Bayfield's current sewage treatment facility has been operating at maximum capacity since last summer and the town can no longer freely issue sewer taps for new construction. In a move that makes absolutely no sense the town will continue to issue building permits which will allow developers to adhere to development timetables, but with no assurance that the sewer taps will be approved. Self-regulation by the town will allow a small number of sewer taps to be awarded after a careful screening process, but many builders will be taking a gamble when they apply for a building permit. It's possible for a builder to receive a building permit and construct a house, but then have to wait as long as 18 months to receive a Certificate of Occupancy; all the while the interest clock is ticking. Explain that logic.

For information about Durango real estate, give us a call or visit http://HomesInDurango.com or http://DurangoRealEstate.biz.

RIVER TRAIL: La Plata County commissioners Tuesday approved a $100,000 supplement to the 2007 budget for a 2.3 mile extension of the Animas River Trail to Three Springs development. The supplemental funds will be added to a multi-agency effort to ented the trail from the point where it currently ends at River Road near Home Depot.

The SMART 160 Trail is a collaborative effort among Trails 2000, the Colorado Department of Transportation, the Bureau of Land Management and the governments of La Plata County and the City of Durango. SMART is an acronym for safe, multi-modal, aesthetic regional transportation.

The expansion work is estimated to cost just less than $2 million. Laurie Blanz, Region 5 Planner for CDOT, said that if the federal funding comes by June or July as expected, construction of the 2.3 mile trail extension should be completed by September 2008.

To learn more about Durango real estate and our wonderful area visit our websites:

http://www.HomesInDurango.com or http://www.DurangoRealEstate.biz

DURANGO MOUNTAIN RESORT: We had an opportunity last week to tour the new townhouse/condominium developments under way at Purgatory. The mountain is booming! From Engineer Village, Black Bear Townhomes and Cascade Creek to the Alpenglow and the Lodge at Purgatory construction is everywhere. According to sources at the mountain sales have been very strong.

Particularly impressive was architectural rendering of the new lodge and plaza area. The lodge is a multi-story structure with retail shopping and dining on the main level, time share condominiums on the mid levels and full ownership units on the top level. A exterior heated pool with a heated deck is only one of the extravagant features planned. The new plaza will be landscaped with a running stream down the center. From what we saw and were told the new lodge will be unlike anything Durango Mountain Resort has seen.

Impressive, very impressive. If you're thinking about a mountain vacation property or even a full time residence, give us a call. We'll be glad to show you why we're excited about Durango real estate. To learn more visit our websites : http://www.HomesInDurango.com or http://www.DurangoRealEstate.biz

THE WEB: A study in 2006 by the California Association of Realtors provides unequivocal evidence that the Internet approach to buying a home is now the overwhelmingly consumer favorite.

For example:

** 92% of Internet buyers found their agent on a web site; 63% found them through an Internet search engine; 0% of Internet buyers found their agent through brochures, flyers, yard signs or mailers to their home.

** In 2000, 28% if people said that they used the Internet as an important part of their home buying and selection process. In 2006, 70% said they did.

** 86% of home buyers started using the Internet as part of their process before they started looking for a specific home; the other 14% did after they started but before that contacted a real estate agent; that means that 100% of buyers surveyed started looking at homes first, agents second.

** 69% of Internet buyers said response time was extremely important. 83% of those buyers chose email as their favored communication method with their agent. 0% chose "in person."

** Internet buyers were more satisfied with their agents: 4.3 to 3.3 for traditional buyers, on a scale of 5 where 5 is "exceeded expectations."

Mary & I recognized in 1998 that the real estate industry was changing. (Something that many agents, to this day, haven't realized.) The consumer had not only the desire but also the ability to be in control. By embracing and developing this technology we are able to provide a superior product to both buyers and sellers in helping them with their needs in Durango real estate.

In viewing our web stats, I can see that we have individuals in Germany, Korea, Taiwan and Great Britain regularly visiting our websites http://www.HomesInDurango.com and http://www.DurangoRealEstate.biz looking at real estate in Durango. It's amazing!

Drop us an email if we can help.

BAYFIELD: The Trustees at Bayfield's Town Board meeting denied approval of a revised sketch plan for the Dove Ranch Subdivision, which would include about 300 units in a high density residential plan north of U.S. Highway 160 and east of County Road 501.

In explaining his reason for voting against the project, board member Daryl Yost said, You want to see city living in Bayfield, this would be city living. I'm just against any project that's this high in density."

Our view - if you want affordable housing higher density is part of the answer.

Visit http://www.HomesInDurango.com and http://www.DurangoRealEstate.biz for more information about Bayfield and the Durango area.

BAYFIELD: The town of Bayfield has grown in recent years, but an unpleasant reality may force things to slow down.

Ed Morlan, speaking before the Town Board, said that the town's sewage treatment plant reached its capacity in December and there's only one way to fix it. "We need a new plant, " said Morlan, chairman of the Bayfield Sanitation District. Morlan said plans are under way to construct a new sewage treatment plant near the high school, but only $2 million of the $7 million needed for construction has been raised. About $1 million was raised through tap fees and the other $1 million comes from a recent grant from the State Department of Local Affairs' Wastewater Enhancement and Treatment Initiative. He and the sanitation district board are counting on the remaining $5 million to come from a state revolving loan fund that targets communities in need.

ECONOMY: When looking at the data available for 2006, the La Plata County economy fairs very well. According to the Bureau of Labor Statistics, the annual average wage in our count in 2005 was $32,163, compared with the state average of $41,601 ( a little more that 75%.)

The latest available unemployment rate locally is 2.9%. Although this is considered very low, which is typically seen as a good thing, it also indicates that some local employers may have trouble finding workers; that might put upward pressure on local wages. Those industries that pay the highest wage in the county are mining (including oil and gas extraction), followed by transportation and warehousing, information and wholesale trade.

Major employers in La Plata County include firms in the construction industry, service, retail and government. These industries, which include tourist activity, continue to drive the local economy. The 2006 data for retail sales, passengers both using the Durango-La Plata County Airport and the Durango/Silverton Railroad, visitors to Mesa Verde and lodger's tax revenue all show increases over 2005.

Agriculture still remains an important contributor to our economy. Hay production and cattle and sheep ranching remained strong. Other contributors to our economy are Fort Lewis College, the construction industry and the real estate industry. Residential real estate prices continued to increase in 2006, but it appears price increases are flattening out. With the development progressing at Three Springs, expect construction to remain strong.

Finally, bank deposits, which are an important indicator of the ability of financial institutions to make loans, continued to increase in La Plata County. According to the FDIC, the first six months of 2006 showed a 16.7% increase over the same period in 2005.

Please feel to contact us for additonal informaton regarding Durango real estate and our economy or visit our websites http://www.HomesInDurango.com and http://www.DurangoRealEstate.biz.

MERCY: Representatives of Mercy Housing, Mercy Regional Medical Center and other involved dignitaries held a groundbreaking ceremony Tuesday to celebrate the Pinon Terrace affordable rental housing project adjacent to the new hospital in Grandview. Pinon terrace will be built on a 4 acre parcel donated by Mercy and will provide housing for 66 families. Dick Banks is the CEO of Mercy Housing, a national organization founded by Sisters of Mercy, who also founded Durango's hospital of the same name. Banks said most of the families who will live in Pinon Terrace will have annual incomes in the $15,000 range, which is even below the 60 percent of median income required to qualify for affordable housing. Pinion Terrace should be completed by the end of the summer.

If you have questions about Durango real estate or our area in general, please call (800) 834-8445 or visit our websites http://www.HomesInDurango.com and http://www.DurangoRealEstate.biz.

FORECAST: After bottoming in the fourth quarter of 2006, existing home sales nationally are expected to gradual rise through 2007 and into 2008 according to the latest forecast by the National Association of Realtors.

David Lereah, NAR's chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. " We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation," he said. "We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."

Even better news is that, as existing-home sales improve in the major markets, our Durango real estate economy can only get stronger. We have numerous clients ready and anxious to purchase a home in the Durango / La Plata County area just as soon as they are able to sell their existing residence.

Stay abreast with the Durango real estate market on our websites http://www.HomesInDurango.com and http://DurangoRealEstate.biz.

RADON: Radon is an odorless, radioactive gas resulting from the natural decay of uranium. Uranium occurs in rock (particularly granite), soil and water. The gas is dispersed into the air outdoors but is suctioned into closed buildings and homes the same way air seeps in. It enters a home through concrete and miniscule cracks in foundation floors or walls, through hollow walls and openings around floor drains, pipes and sump pumps. It also enters in the water, particularly a well-water source.

The better insulated the home, the more the radon seeps in, is trapped and builds up to toxic levels. The amount of radon in the soil is determined by the geology under and near the home. Colorado homes are ranked at high risk for radon by the EPA.

Testing for radon is simple and inexpensive. The short term test involves hanging a postcard size envelope in a designated area for 3 to 5 days; then seal and mail. Results are sent to you within a week. Mitigation is recommended if the level is greater than 4. Elevated levels of radon in homes is documented as the number 2 cause of lung cancer. If you don't know the level in your home, we recommend a short term test.

WATER: Unable to persuade the city of Durango to reduce the amount of water it wants for a kayak course on the Animas River, the Southwestern Water Conservation District moved last week to acquire water rights itself.

By a 5-1 vote, the district board members authorized its attorney and engineer to ask for 30,000 acre feet of water annually to satisfy the needs of users upstream who don't have court decreed water rights , as well as to meet future demands.

About 20,000 acre feet presently are used annually by those upstream who already have court ordered water rights.

Water rights in southwest Colorado are a contentious issue. A number of entities, including public and private groups, filed statements of opposition after Durango filed its application in February. It was hoped that negotiations between the district and the city would make a scheduled court trial in May unnecessary. The water district's action apparently is in self defense.

Visit http://www.HomesInDurango and http://DurangoRealEstate.biz for additional information regarding Durango real estate.