It’s still a buyers market, but buyers soon will be hard-pressed to find a home as inventory in the county decreases to the lowest rate in five or six years.
That was the message at the 13th annual Real Estate Forecast on Wednesday night.
Inventory is down nationwide, and Durango is far below the six-month supply that real estate experts consider economically healthy.
As inventory decreases and demand increases, the median home price also will go up. It’s expected to increase 5 to 7 percent in the county and about 10 percent in Colorado. If that bears out, it would be the first time home prices have gone up in the county since 2006.
The good news is the real estate market looks better than it has at any time in last five years, said Bob Allen, owner of Allen & Associates, a real estate appraisal, consultant and research firm.
Allen put together 118 slides depicting sales trends, inventory rates and property prices for the presentation.
Inventory in the Forest Lakes subdivision is reduced but still available. It had the most foreclosures during the recession and still is recovering some from the recession, said broker Rick Lorenz.
The impact from foreclosures is fading. Foreclosures in 2012 in Colorado dropped about 19 percent to a six-year low. Foreclosure filings are down 60 percent and auction sales are down 32 percent in the county so far this year.
Investors are diversifying their portfolios with real estate, said broker John Wells. As baby boomers continue to age, they’ll be snatching up more of the inventory for a second home or vacation property, he said.
New construction still is low because of the slow credit market and the lack of builders in the area, Allen said. Construction workers either left the area or went into a different profession after the recession hit.
About 80 percent of the active homebuilders operating in Colorado in 2006 no longer are in business, according to a Hanley Wood Market Intelligence report obtained by The Denver Post.
It will take three to five years before La Plata County has enough workers, said broker Jim Wotkyns.
Another challenge is the slow credit market. Banks don’t want to invest in speculative houses, said broker Christine Serwe.
“The most difficult part of buying a home is the mortgage aspect,” Serwe said. “It’s taking more time, and there are more requirements.”
Allen said he expects the credit market to improve this year.
When the credit market begins to improve and construction companies come back to the area to build, Twin Buttes, Three Springs and Edgemont will be the subdivisions with the most potential for growth in Durango city limits, Allen said.