Lack of housing inventory proves problematic for homebuyers
Durango real estate prices increased during the third quarter of 2022 compared to 2021.
But with an increase in sale prices, there was a decrease in the number of units sold in most areas in and around Durango, according to sales data from Durango Area Association of Realtors.
The median price of a home in La Plata County hit $600,750 for the third quarter of the year, a 13.5% increase compared with the $537,359 median price for the same quarter in 2021.
The second quarter median price for an in-town Durango home hit $725,000, an 11.5% increase from the median price of $650,000 for the third quarter in 2021.
Lois Surmi, president of the trade organization, said a lack of housing inventory continues to be the reason for increased prices in Durango and La Plata County.
She said it is hard to predict whether prices will remain stagnant.
“More people want to be here than there are properties to sell,” Surmi said. “We keep looking for this leveling off, but it just hasn’t quite happened yet.”
She said the number of sales in the fourth quarter will probably decrease because October through January tend to be a slow period for home sales.
In the Durango Mountain area, i.e., homes around Purgatory Resort, the third quarter median price for a single-family home came in at $1.73 million, up 66.3% from the $1.04 million median price for the third quarter of 2021. But that is based on only 33 homes being sold in the third quarter of 2021 and 28 homes being sold in the third quarter of 2022.
Real estate sales data from Wells Group Realtor Rick Lorenz shows that 88 homes that cost $1 million or more have been sold in rural Durango during the year’s first three quarters.
For townhomes and condominiums in the Durango Mountain area, the third quarter median price was $440,000, a slight 9.3% decrease from the $485,000 median price for the third quarter of 2021.
“Sometimes it can be strictly because of the type of property that’s sold,” Surmi said. “If there were only lower-priced ones that were the ones that sold that quarter, it could skew everything, as opposed to throw in a $2 million one.”
Bayfield in-town homes once again reflected a more affordable alternative, with a median price of $450,450, a 15.5% increase from the $390,000 median price in the third quarter of 2021.
The number of Durango homes sold in the third quarter of 2022 are down compared with third quarter 2022 for in-town and country homes.
However, the number of homes sold in Bayfield increased slightly in both the in-town and country categories.
Surmi said as Durango home prices increase and supply decreases, the number of Bayfield home sales tend to increase.
“There’s still some people that work in Bayfield. but it’s not as big of an industry,” she said. “Some people work in Durango but they’re willing to drive a little further just to own a home.”
Areas with the largest decrease in sales were Durango in-town homes, Durango country homes, Durango condominiums and townhomes, and La Plata County residential land between 1 and 10 acres.
Durango in-town homes plummeted from 145 units sold in the third quarter of 2021 to 105 units sold in the third quarter of 2022, a 27.6% decrease.
Durango condominiums and townhomes sales dropped from 199 units sold in the third quarter 2021 to 145 units sold in 2022 for a 26.1% decrease. Durango country home sales went from 364 units sold in the third quarter of 2021 to 264 units sold in the same quarter of 2022.
La Plata residential land had the largest percentage decrease at 32.3% with 158 properties sold in the third quarter of 2021 and only 107 properties sold in the third quarter of 2022.
“That’s always a strange one because you figure that if somebody can’t find some place to buy to live in, they’ll buy land or they buy it now to hold on for later,” Surmi said.
She said the sales reduction is most likely a result of fewer properties on the market.
Lorenz said higher interest rates will most likely impact homebuyers in the $400,000 to $800,000 range, because they are more likely to take on loans to make a purchase.
“When mortgage rates go up, you don’t qualify for as much as you used to qualify for,” he said.
Lorenz predicts housing inventory will not rise in the near future. With mortgage rates sitting around 7%, he said it is unlikely sellers will give up a home they are paying a lower rate for, meaning fewer homes on the market.
Lorenz’s numbers show an increase in housing inventory at 249 units through the first three quarters of the year compared with 164 available units in 2021. However, he said the increase is not enough to drastically change home prices.
“Realistically, this is still a tight market and I think demand has gone down,” Lorenz said.
He said fourth quarter real estate prices and sales are likely to remain similar to the third quarter numbers.
Post courtesy of The Durango Herald