Durango Real Estate Blog: Market Updates & Local News

Local reporting on the Durango and La Plata County real estate market from John Mace, REALTOR®. Browse monthly sales data, pricing trends, buying and selling guidance, and community news based on local MLS activity and firsthand experience.

July 25, 2023

Colorado Mountain Resort County Real Estate Update - July 2023

Every once in a while, I get a wild hair to see how the Durango and La Plata County real estate market compares to other similar counties in the state. To make the quick case: yeah, I consider La Plata County a resort county. While we have all the fixins of a community, Durango also offers all the recreational "resort" activities: skiing, mountain biking, rafting, fishing, hiking -all that jazz, along with the Durango & Silverton Narrow Gauge Railroad, festivals, events and more. Onto the real estate!

In short, numbers are all over the place! I'm seeing some big swings in year-over-year and year-to-date trends. Makes me think we're seeing the beginning of another shift as markets finally adjust to higher mortgage rates and increasing inventory. In other words, after the last 3 years, it looks like things are finally starting to trend away from a Seller's market.

(Keep in mind, we're talking counties here. The resort specific towns within these counties could (and probably do) have a different data set than the county as a whole. Since limited data will skew the numbers, I opted to analyze a larger constrained area and use median sales prices instead of average to try to give a balanced perspective.)

Compared to the other counties, La Plata still remains affordable, but YTD not the most affordable, as the median sales price of TH/Condos has surpassed Gunnison County (which includes Crested Butte). I don't know what's going with Pitkin County's TH/Condo data: $165K as the median sales price? That number is typically in a solid 7 figure range; their single family home prices still remain off the charts, despite a 16% decrease YTD from 2022. San Miguel County (Telluride & Mountain Village) leads the pack in median TH/Condo sales price, up nearly 39% YTD from 2022.

Some other significant YTD changes to note are:

Summit (Vail) seeing days on market (DOM) increases of over 100% for all housing, along with a roughly 20% drop in new listings for all housing.
While San Miguel might have cranked up the sale price of their TH/Condo segment, their single family sales are down 35% and the median sales price dropped 46%.
Eagle still thinks this is 2022: single family new listings and solds are down 23% and 21%, and TH/Condo new listings are down 42% and solds are down 47%, yet the median TH/Condo sales price is up 26%, and DOM is up over 100%.
Routt's (Steamboat Springs)inventory is more of the same: new listings and sold listings across all categories down 23% to 41%, but their sales prices are barely down in TH/condo and barely up in single family.
DOM in Grand in the TH/condo segment is up 228%, while inventory is down and sales prices are holding somewhat steady.
Gunnison (Crested Butte) has the same amount of YTD sales in the single family segment, but the median sales price is down 19%, along with the median sales price of their TH/condo segment, now making that market more affordable than La Plata's.
La Plata doesn't have too many extremes, yet. Prices in all housing still continue to steadily climb, and just like the other counties, new and sold listings are down 20%-34%.
Pitkin had some weird data for the TH/Condo segment. According to the MLS, there were 0 sold in JUN22, and 5 sold this June, with just 4 sold YTD JUN22. Their numbers in single family are down across the board: 22% less sold at 16% lower median sales price in single family.

I was going to speak to YoY data, but I think the above graphs are pretty self explanatory. In lieu of another novel, I decided to put together one more chart, showing the change of Months of Inventory, which is a calculation of new listings, under contract listings and sold listings; pretty much how many months it would take to sell through current inventory given current conditions. If you give it a google, you'll find significance defined by varying ranges, so here's how I see it: 3 months and under is a Seller's market due to high absorption and low inventory. 3-6 months is a balanced market, and if there's over 6 months of inventory, it's a Buyer's market, due to all the available inventory that isn't moving quickly. Some huge changes from last June, and you'd think prices should be catching up to inventory trends any day now. Have they already reacted to interest rates, or is the effect of 7% still yet to have a full impact on our market? There's still a lot of cash buyers out there.

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March 18, 2023

Durango Real Estate Market - March 2022

Another beautiful sunset from Hesperus. I think today is the last day they're open for the season, which is a bummer considering all the snow we have. AND considering we're expecting something like another 3-4' (yes, that's feet) of snow in the first half of next week. Their short season and limited hours make it really hard to commit to a season pass, despite its price point, but some of the most gleeful skiing I've done has been there. With this impressive snowpack, I'm stoked for all the Summer activities this year and really grateful for all the moisture that's going into the environment. We'll have healthy runoff that flushes the rivers out and help fill our reservoirs, the wildflowers should go all out this Summer, and camping in lush green settings in the high country will be a welcome change.

And in less than two weeks, Ska taps their Mexi Logger, so you know Spring is on its way, despite what it looks and feels like outside!

What a volatile start to the year! I was going to put something out the other week, and then that SVB thing happened, and I wanted to see how that would play out this past week. Is it the start of something bigger? Doesn't really seem like it at this point, we're being led to believe everything is under control and the Fed's safety net is working. Is it going to lead to a real estate market crash? If you watch that stuff on youtube, they've been full of doom and gloom, with gaping mouth thumbnails with explosive, sensational and urgent rhetoric in their headlines. For what it's worth, a broken clock is right twice a day.

Maybe the national market is going to take a hit, somewhat already has, but it's all about the micro-market, which in this case is La Plata County. And I don't really see things crashing here; at least for any of the reasons those talking heads on youtube think. Historically, we've been pretty insulated and rebounded quickly from previous times. We could have a big fire or the Animas/Florida could run dry, both of which seem highly unlikely this year. Let me be perfectly unclear, I'm not unconvinced we're going to see a hit to our market, but I'm not convinced either.

Our market is teetering, held up by opposing forces, kind of like an evenly matched game of tug of war, so I'm not making any bold predictions, we're in a wait and see phase. I'm still aligned with the premise that the low inventory will keep sales prices stable. (This won't be the case in other markets.) I think there's going to be a shortage of inventory for a while, as the folks that bought or refinanced in the last couple of years at sub 3.5% rates probably aren't going anywhere anytime soon. And even if there is a crash here, there are so many people primed and ready to jump on a purchase. Even a 5% decrease in listing prices will pull enough Buyers off the fence, creating new demand and most likely re-stabilizing prices.

There's the data you see above, a small dip in median sales price this year, and holy cannolis, we're nearly 70% down YTD in new listings! Despite higher rates, there is still a demand to buy here, it's just that Buyers aren't as motivated to buy a dilapidated fixer upper at a premium price point with a 6.5% interest rate. It's Durango, this place is awesome and more and more people are finding out. And as I've compared the Colorado mountain resort counties in the past, La Plata County is still the most affordable. A couple of data points to compliment the information above:

Durango saw a continuous decline in median sales price since November last year through this January, about -13%. The year prior, from Nov21 to Jan22, it straight declined -14%, and the year prior to that, Nov20-Feb21, it declined -14.8%. And we know what prices ended up doing those years.... So no alarm bells going off here yet. But I'm very curious to see what happens this month and next month as we go into the seasonal spring listing surge. If these current trends continue through April, then
There was a 42% decrease in days on market for February in Durango. Maybe we finally moved through a chunk of that inventory that listed last Summer? Folks who listed expecting a previous market as we were shifting into a new one. Maybe it's just a fluke, but if it maintains, it could be an indicator of a market picking back up.

Conclusive thoughts: wait and see.

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Jan. 27, 2023

Durango, Colorado 2022 Market Recap

I probably would have had this our sooner, but holy cow SNOW! I live on the west side and we probably got close to 5' in the last week. Digging and shoveling and digging and shoveling and digging and shoveling... and playing hooky to sneak some powder laps in at Hesperus. River season is gonna be feisty this year! Should probably order a high float PFD before they sell out.

I think our market is frozen- no pun intended. Looking at active inventory, you can really see when the Spring/Summer listing season hit, at the same time rates really started to shoot up. Ouch... One of my predictions from a few months ago looks like it's maintaining accuracy, that I think we're going to see limited inventory for a bit. Anyone who bought/refied in the last year or so probably isn't inclined to sell anytime soon. So we have two kind of... opposing forces at play:

Limited inventory tends to preserve/appreciate price points. Simple supply and demand, and there's absolutely still demand out there. There's just nothing to buy. And the gems that do hit the market? They're still gone in a matter of days, at asking price or higher.
Higher interest rates (despite them falling for 4 months straight and back to Aug/Sep levels) have tapered Buyer motivation while increasing expectations. Yes- people still want to buy in Durango, but are no longer willing to pay over asking on a dilapidated and neglected property- and rightfully so. Those properties are chilling on the market and dropping in price until someone thinks it's worth it.

Take a look at the statewide statistic chart for Colorado. Some of the swings between 2021 and 2022 are pretty telling! Active listings in 2022 are up 65% over 2021 while sales are down 42%. Yet, here in Durango we're still seeing low inventory providing minimal options. I'm hoping we'll see a strong seasonal listing bump (as we typically do) this Spring, along with the continuing trend of decreasing rates. But if you're looking to buy right now, and you're good with the rates, there are deals to be had if you find the right home that works for you. But just remember you're not the only one shopping right now, there's still strong demand to buy in the Durango market.

My MLS data goes back to January 2009, when the median sales price in Durango was $292K. Last month was $641K and the month before was $724K. Looking at historical trends, it seems the usual low point of each year is Feb or March. This month to date, the median sales price in Durango is $625K, so I wonder if prices might go even lower in the next couple of months before they historically trend back up come Spring/Summer.

Enjoy Snowdown!

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Dec. 19, 2022

Colorado Ski Resort Real Estate Market Update - November 2022

Every once in a while I'm curious to see how we (La Plata County) compare to other spots around the state- well, OK, the Western 1/3rd of the state.

Interestingly enough, as statewide sales prices have continued to increase YTD, Single family sales are down about 18% YTD, while TH/Condo sales are down about 22%. Compared to last November alone, monthly sales for both are down over 40%. CO is still seeing less than 2 months of inventory, so the market still thinks it's a Seller's market, but I have a feeling the folks that are Selling might feel differently.

Rates have been dropping steadily for about two months now, and the average 30yr fixed is down a point from it's high to 6.27%. Don't forget Colorado has CHFA, which has programs to help with downpayment assistance, while Fannie and Freddie recently eliminated many of the associated fees for some of their programs.

r/Colorado - Colorado Real Estate Snapshot November 2022

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Nov. 7, 2022

Durango Market Update - November 2022

As the snow falls, I wonder how many lollygagging Halloween decorations are getting wrecked right now. Some of our stuff is out there too, and even though it says "For Indoor and Outdoor Use", I've noticed smaller print below that listing all of the parts and components that aren't waterproof. Soooo, I guess we're living life on the edge these days. We're down one holiday with a few left to close out the end of the year, so hang in there and enjoy the precipitation.

Speaking of tricks and treats, let's talk about the real estate market!

That's me putting this market update together. Just read on... you'll see.

Word of the day is Prognosticator;

a person who foretells or prophesies a future event.

There's a lot of prognosticating going on out there these days, especially when markets are the subject material, and their accuracy seems to be all over the board. The truth is, I don't think anyone really knows, but they have to say something to keep the clicks and the views and the likes coming in. The real estate market is still being weird, and I'd sure like to not have to prognosticate, but as someone reminded me the other day, that's my job! I'm going to kind of cheat the system though, and tie in some past data points with present ones using a few charts that I put together; but I'll say it again, I don't think anyone really knows where it's going!

First, the big question: the causation (or lack thereof?) between mortgage rates and sales prices. I used La Plata County, not just Durango, to work with a wider set of data from March 2017 to present.

Mortgage rates are getting pretty high -they've essentially doubled since the beginning of this year- and they're supposed to go higher if the Fed keeps doing it's thing: raising rates to "reign in" inflation to make money more expensive and remove it from circulation. This comes with the hopes and dreams that if people can no longer afford to "buy" money to buy stuff, demand would decrease, supply would increase, the markets would react and prices would come level off; or in real estate, perhaps decrease. Unfortunately, when the only tool you have is a hammer, the correction can have some painful side effects; cracking eggs to make omelettes if you will.

In the context of this chat, that means correcting real estate prices, in La Plata County's case, one that's gone up about 40% in the last two years, and 15% from this time last year. Looking at the graph above, I'm not so sure La Plata got the memo. But, the graph below tells another story.

The above chart shows the % of list to sold price over the last ~2 years in La Plata County across various price points. So if a property was listed at $800K and closed at $784K, it received 98% of list price. Look at what's happening up there! After generally hovering around 100% list price received for over a year now, if not above, that amount has steadily decreased since June of this year, when the average was 101.1%, and is now 97%, averaged across all price points.

This is one of those "weird" things happening: prices are still going up, despite rates going up and properties selling below list price. I think this is currently a sign of a returning healthy real estate market. What I mean by that is

We're not seeing those bidding wars driving prices up anymore
Buyers are able to negotiate again
Despite Sellers coming down on their list prices, the real estate market is still appreciating, as one should. I think there's more correction coming, especially as we go into the Winter. I bet we'll see percentages in the above chart continue to decrease until sales prices level out a bit.

The challenge is that there's a disconnect between Buyers and Sellers. Sellers think their properties are worth what they were prior to Summer (or more!), while Buyers taking a loan out have had their purchasing power crushed by increasing rates. Assuming the median sales price of a home in Durango of $715K and 20% down: the monthly payment from a purchase 3 months ago if made today (7.3% avg 30 yr rate) would be ~23% higher. I'll come back to that math in a bit.

Remember last Spring/Summer when the prognosticating started up about how silly it was to buy, and wait for the impending crash? The avg 30yr rate was 3% last June, and the median sales price in La Plata was $571K. Again, assuming a purchase today @$715K, 20% down, excluding taxes/HOA/insurance, the monthly payment would be 103% higher on today's purchase. I don't bring this up to salt the wound, nor to inspire urgency, but as caution to putting someone else's speculation ahead of your personal needs. Remember, most "experts" didn't think we'd see rates above 5% this year.

Let's go back to the math from 2 paragraphs above. To be painfully accurate, we should be comparing the median price and rate at the time to today's price and rate. In August in Durango, the median price was $615K and the avg 30yr rate was 5.3%. Assuming 20% down on that, purchasing a property at today's median price and rates, the monthly payment would be 36% higher. That's what needs to sink in for Sellers and the point I'm trying to make, that in the last 3 months alone, Buyers have lost a third of their purchasing power, so it can get pretty tricky pricing a new listing at yesterday's comps, we should be in a declining market by now, but we're not. Welcome to Durango!

I'm ending on one last graph and note. If you've made it this far, kudos! Either you're really interested in southwest Colorado real estate, or you're really trying to draw out that bathroom break.
The point I want to make with this chart is that all the prognosticators in the media, on the news, the youtubers, social media, the email newsletters, they might be able to speak to general sweeping market conditions, but if you're serious about buying or selling, you really need to dive into your local data. It could be easy to look at my MLS as a whole and say, yeah, look at those days on market, inventory is starting to sit. La Plata County tells a similar story. But homes in Durango? Despite all the doom and gloom of high rates and sales prices that continue to rise, the DOM is going back down, there is still demand to buy here. A well cared for property, especially one in town and updated, and priced reasonably, should still go under contract within a week or two of hitting the market.

And those properties that don't sell? The ones that are sitting on the market for 2+ months? Keep an eye out for price cuts by motivated Sellers, there are deals to be had! I just helped some clients purchase a home at 22% below list price, even when the appraisal still came in well over the sales price.

Moral of the story? This market has a lot of people scratching their heads, no one really knows what's going to happen next. A lot seems to depend on the Fed. Maybe we're already in a recession. Maybe a bigger one is about to hit? Maybe we're over the hump, which makes you wonder when you see that Starbucks saw increased sales and higher quarterly earnings than expected!

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July 31, 2017

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