A development boom in subdivisions adjacent to downtown is adding dozens of homes to Durango’s real estate stock, but the increasing supply will do little to temper costs – and teachers, clerks, police officers and other average wage-earners will find themselves priced out of the market.
The high cost of land, labor and infrastructure have pushed the median home price for in-town Durango homes close to $500,000, according to the most-recent home sale numbers from the Durango Area Association of Realtors.
Median prices vary in the largest subdivisions expected to accommodate future growth in or near the city of Durango. Building is taking place in Edgemont, Three Springs and Twin Buttes subdivisions.
In Three Springs, the median price is $395,750. In Twin Buttes, homes are selling in the $600,000 range. In Edgemont Meadows, about 6 miles northeast of Durango, the price of several homes sold recently was about $575,000, real estate agents specializing in each community said.
Residents likely need to earn more than $80,000 per year to afford a $484,500 home, and that is with $50,000 for a down payment and minimal debt, said Elizabeth Salkind, executive director of Housing Solutions for the Southwest. The monthly mortgage payments in this scenario would be about $2,300, she said. The median annual income in La Plata County is about $61,910, according to the U.S. Census Bureau.
High housing prices in Durango have been a problem for many years, and thousands of people working in gas stations, restaurants, retail stores and similar jobs must commute long distances from areas where housing is more attainable, said Peter Tregillus, chairman of the Durango Planning Commission. They also “spend less time with their families,” he said.
If the price of homes continues to rise, it is possible the Durango area could look increasingly like the Aspen-to-Glenwood Springs corridor, where much of the workforce must commute long distances, causing traffic congestion, he said.
Demand stays highThe economy is healthy, and new residents continue to move to the area for jobs and the lifestyle, and that keeps home prices high, said Roger Zalneraitis, former executive director of the La Plata County Economic Development Alliance.
At least some of the demand is driven by residents between 25 and 39 years old, who represent the fastest growing demographic in Durango and want to live near schools and other community amenities, Zalneraitis said. Children younger than 5 represent the second-fastest growing group in town, followed by adults older than 70, he said.
Even though thousands of additional homes are planned over the next several decades in Three Springs, Twin Buttes and Edgemont subdivisions, La Plata County needs additional subdivisions to help provide the 11,000 homes the area will need by 2035, based on growth predictions, he said.
Subdivisions allow builders to put in homes quickly and also help prevent sprawl, he said.
“We need to think regionally when we think about housing. Durango simply can’t provide all the solutions to our housing needs,” Zalneraitis said.
For example, a 400-home subdivision planned for east Bayfield, 20 miles east of Durango, could help absorb growth. The median price for a Bayfield home was $315,500 in the third quarter of this year, according to the Durango Area Association of Realtors.
Plans for the development are contingent on the Colorado Department of Transportation allowing the north end of Bayfield Parkway to extend to U.S. Highway 160, Bayfield Town Manager Chris LeMay said.
Three Springs Some Durango residents have found more affordable housing in Three Springs, a subdivision of 537 homes. When complete, the area could have 2,300 homes.
Recently, the subdivision finished preparing 83 lots for construction, said Gary Whalen, who works with the real estate division of the Southern Ute Growth Fund. Of those lots, 23 are for two-story townhomes that will be priced under $300,000, he said.
“Our goal is to try to keep things in the somewhat affordable, attainable range,” he said.
The other 60 lots are larger properties for single-family homes on the north edge of the subdivision, he said. The lots will be sold for around $80,000, he said.
Every year, the subdivision aims to open between 40 and 50 lots for builders, he said.
The subdivision is home to two large apartment complexes, but the developers do not have any immediate plans for additional apartment complexes, Whalen said.
As part of an agreement with the city, Three Springs also charges a 0.5 percent transfer fee on the sale of homes in the subdivision, according to the city’s housing plan. The fee is expected to generate more than $25 million for city housing programs in Durango over the next 40 years, according to the plan.
Twin ButtesSixteen homes are under construction and a handful are inhabited in the Twin Buttes subdivision, 2 miles west of downtown Durango. At full build-out, the subdivision could have up to 655 homes across its 220 acres. At least some of the housing is expected to be apartments on the subdivision’s western side, said Russ Smith, senior sales manager for the development. Additional dense multifamily housing could be built on the Twin Buttes’ eastern side, but those phases may not be built until the 2020s, he said.
So far, Twin Buttes has attracted buyers mainly locally and the Front Range, especially Denver, said Phil Schoon, a real estate agent who sells property in Twin Buttes.
“We have people that are getting closer to retirement that have been living in Fort Collins, Boulder, Denver. ... They are looking to retire and they want to get away from the busy urban areas of Colorado,” he said.
Some interested buyers are also coming from Oklahoma, New Mexico, Arizona, Texas and California, he said.
Smith said he expects between 24 units per year – or about two a month – to be sold in the subdivision.
In the short-term, the subdivision’s lowest-priced housing is expected to be at or below $300,000, said Joel Aguilar, owner of JITA Contracting.
Aguilar is working with Glenn Pauls, the owner of Twin Buttes, to build an area of 20 homes that will include 12 small townhomes between 900 to 760 square feet, he said.
“It’s a little enclave of all differently designed houses, but they are all much smaller than what people are building right now,” he said. Small, dense housing is key to keeping price points down, he said.
If the development is successful, there could be two or three similar enclaves built in Twin Buttes, he said.
Edgemont Nearly 900 homes could be built in the three Edgemont subdivisions about 6 miles northeast of downtown Durango, said Edgemont Meadows developer Tom Gorton.
Most of the development is expected to happen in Edgemont Highlands and Edgemont Meadows, because Edgemont Ranch is essentially complete, he said.
Between 200 to 300 units could be built in the Edgemont Highlands and Meadows, he said.
Edgemont Meadows is the most-recent area to start construction. About 50 of the 83 available lots have been sold, Gorton said. When complete, the Meadows could have between 150 to 160 homes in it, he said.
Developments within the city of Durango tend to pay high fees for parks, streets and other city costs, Gorton said. But developing in the county could soon exceed the cost of developing in the city, in some cases, because of the high cost of providing water and sewer service.
“The community as a whole needs to look at the potential growth and needs to be smart about where that growth can go,” he said.