“How’s the market doing?” is a common question Don Ricedorff hears from local residents.
Despite what consumers may believe, the Durango real estate broker says there is no simple answer because there are actually various components that make up “the market.”
Generally speaking, there are actually three types of markets in real estate: a balanced market, a buyer’s market and a seller’s market, he said.
The National Association of Realtors has defined the three markets as:
A balanced market is when the relative supply rests at about seven months of inventory. In other words, when the demand for property is about equal to the availability of property.
In a buyer’s market, the buyer has the advantage. This type of market is defined by a relative supply of more than seven months of inventory. The buyer in this scenario has more available options when searching for a home.
A seller’s market is defined by a relative supply of less than five months of inventory. In this case, the seller has the advantage and can dictate the terms when selling the home. Thus, fewer options are available to the potential buyer.
So how does this apply to La Plata County and Durango?
The Colorado Real Estate Network, a database used to look at housing markets in real time, provided the information used in this analysis.
From Sept. 13, 2012, to Sept. 13, 2013, 1,023 residential homes were sold in the county at a median price of $305,000, up nearly $5,000 from the $299,450 it was for the Jan. 1 to Dec. 31, 2012, period. That same year, 834 homes were sold in the county, suggesting more buyers are looking for homes locally.
In 2006, right before the recession, the median price for the total market was $340,000. Though the sale of homes in the county has slowly picked up, La Plata County’s real estate market is not exactly back to where it was seven years ago.
If a buyer is looking for a home in La Plata County, then he or she is in luck. As of now, there are 840 homes available in the county. With about 10 months of inventory, La Plata County is currently in a buyer’s market.
In looking at the rural area surrounding Durango that encompasses the city limits northbound to the Rockwood Resort, west to the county line at Mancos Hill, east 12 miles from Bayfield and south to the state line, a similar result is expected.
From Sept. 13, 2012, to exactly one year later, 372 residential homes were sold at a median price of $364,500.
The area outside Durango currently has 360 available homes and has more than 11 months of inventory, placing that area in a buyer’s market.
Taking a look at Durango homes near downtown is a different story.
Looking at the same 12-month period, 337 residential homes were sold within the city limits at a median price of $320,000. As of now, 122 homes are available at a median price of $382,000. With about four months of inventory year to date, the area within the city limits is currently in a seller’s market.
What about those seeking a single-family house, excluding townhouses and condos, within the city limits of Durango?
A house with a minimum of three bedrooms, two baths and one-car garage that is deemed affordable for a middle-class family in the area will range between $250,000 to $400,000.
Using the same time frame, Sept. 13, 2012, to Sept. 13, 2013, 59 homes with the previously stated requirements were sold at a median price of $344,000. As of now, eight houses are available at a median price of $343,900. With just more than 1.5 months of inventory, this specific criteria is a seller’s market.
Kelly Kniffin, president of Durango Area Association of Realtors, said national statistics show that existing home prices have fallen overall, but stats may be not be indicative of every specific region. Kniffin also said that buyers are willing to pay more for newly constructed homes, but this area doesn’t have a lot of them.
Buyers in the area who are looking to take up remodeling projects would benefit most in purchasing a resale because there is hardly any new home construction.