Real estate data for the second quarter shows almost overall increases in average prices
Lower inventory and higher demand drove up average sales prices for La Plata County homes during the second quarter of the year.
Data from the Durango-area Association of Realtors shows that the median home price in La Plata County was $625,000 for the second quarter of the year, an increase of 18.6% compared to the median price of $527,100 for the same quarter of 2021.
Luis Surmi, president of DAAR, said increased demand across La Plata province has driven up prices.
“It’s a mindset: ‘We’re thinking about selling and my neighbor got this, so I should be able to get this a lot more,’ and because there’s such a demand, they probably get an extra $10,000 to $15,000,” he said.
The average second-quarter price for an inner-city Durango home was $718,375, a 10.5% increase over the median price of $650,000 in 2021. Surmi attributes the increase to a shortage of housing stock. However, she said home prices in the city were one of the lowest increases seen across the county.
Prices have also gone up in Bayfield. The median price of homes in the city was $465,000 during the second quarter, an increase of 20.8% from the median price of $385,000 in 2021 during the same quarter.
Surmi said value is often determined by comparable properties sold. The best indicator, she said, is to compare properties sold within similar sub-divisions with size and age.
In the Mount Durango area, near the Purgatory Resort, the median price in the second quarter for a single-family home was $1.65 million, up 42.2% from the median price of $1.16 million for the second quarter of 2021.
Surmi attributes the shortage of housing stock to high prices because it creates bidding wars with many buyers which results in sellers taking the highest bid. It sets the new asking price for other sellers.
“You have five people who want the same house because there are no other houses to buy,” she said. “That’s when they start over-bidding and that raises that price.”
For homes and condominiums in the Mount Durango area, the median price in the second quarter was $403,500, down 9.9% from the median price of $448,000 in the second quarter of 2021.
Surmi said the average price for apartments and houses can be misleading. Since apartment prices differ from home prices, this can lead to more drastic changes in the average price.
“If you start seeing a lot of condos for sale, for $2 million for a home in the Glacier or Purgatory area, the price will suddenly look like the price has actually gone down,” she said.
According to the report, interest rates began to rise in February with Freddie Mac’s rate increasing by 3.66% to 5.10%, affecting lending rates. A person who can buy a $400,000 home at a 3.66 percent rate of Freddie Mac may be able to purchase a home that costs only $325,000 at a 5.10 percent rate.
said Rick Lorenz, a broker at Wells Group in Durango.
Lorenz calculates his real estate stats. His data shows that 522 units were sold in La Plata province during the first half of 2022. Among them, they cost $103 million or more. That’s 32 homes over $1 million, more than 71 units sold during the first half of the year in 2021.
Lorenz said that in times of financial downturn, those with the ability to do so invest in real estate because of the utility. Homes worth over $1 million can be used in a variety of ways to increase income opportunities such as rental properties or land subdivision.
Another statistic that shocked Lorenz was the percentage of home buyers who had paid cash for homes $1 million or more. Of the 103 units sold, 48.5% of buyers paid cash.
“That kind of information tells you that the people who have the money (up front) are the ones who are buying those homes,” he said. “People are not highly leveraged, they cut 10% and borrow the rest.”
Lorenz’ data also showed that 213 of the 522 units were sold above asking price. This is a result of the seller’s market, he said, where buyers are forced to bid on much larger homes due to competition created by demand.
According to his figures, the housing stock has been rising from 2021. As of June 30, the number of available units is 252 compared to 197 last year. However, compared to previous years, the stock is still low. In 2019, his data shows that there are 645 units available in La Plata province.
“We have sellers who want to sell, but are afraid to sell because they won’t be able to find something else,” Lorenz said. “If instead of 252 units for sale, you have 600 units for sale, the seller will say we will be able to find something that has 600 units.”
Looking ahead, Lorenz expects the market to slow and fewer units will be sold driven by higher interest rates.