The year-end statistics for La Plata County were released recently, and many people, including real estate brokers, were surprised that the price of Durango in-town homes declined by 3.3 percent.
The data is deceiving because it measures the median price rather than the average sales price. Additionally, home sales in Three Springs skew the data; this community is within the city limits near Mercy Regional Medical Center with prices in the low end of in-town prices.
The published sales data are based on the median prices, which is the price of the home that was right in the middle of the range of all sales. The median in-town price in 2016 was $464,250, with 58 homes selling in the $400,000 to $500,000 price range. There were 20 sales in Three Springs with a median price of $360,125; the 20 sales were 34 percent of the $400,000 to $500,000 segment.
Sixty-nine homes sold within the $400,000 to $500,000 price range in 2017; 52 of the sales were in Three Springs, a whopping 75 percent of the segment. The overall 2017 median price of $449,000 was significantly impacted by the large number of Three Springs sales.
The inclusion of Three Springs sales and use of the median price resulted in misleading appreciation measurements for in-town areas outside of Three Springs. If we analyze the average price and take out the Three Spring sales, the results are entirely different.
The average sales price of all homes in 2016 was $498,587; $515,125 outside of Three Springs. In 2017, the average in-town sales price was $523,725; $571,166 outside of Three Springs. The average in-town price, including Three Springs, increased 5 percent from 2016 to 2017; average home prices increased by 11 percent outside of Three Springs.
Using statistics that include the entire price range of a given geographical area are not useful. Prices do not normally move equally within the different price ranges. Homes in the lower price ranges have been in higher demand and there are fewer homes available for sale, so that segment of the market has appreciated at a higher rate than more expensive homes. There are less prospective buyers of expensive homes and the inventory is more plentiful; therefore, those homes typically appreciate at a lower rate.
When you are ready to start the home-buying process, you should interview more than one agent. A broker who knows the market and has experience will be able to determine the true value of a home you are considering; asking prices are usually inflated.
He or she will also know the demand for the home you like; your bargaining position varies depending on the supply and demand dynamics for the price range of the home you are considering.
An experienced agent with keen negotiating skills will be able to get you the lowest price and best terms possible.
Steve Setka is an exclusive buyer’s agent with Keller Williams Realty in Durango and a licensed mortgage originator. He can be reached at 903-7782 or Steve@DurangoRE.net.