The local real estate market was on pace through the first nine months to be the best year since 2006, and then came October.
October real estate sales in La Plata County are way behind sales in October of last year. Overall, residential real estate sales in the county were down 34.2 percent from last year. The impact was especially felt in the market for homes under $500,000, with a 42.7 percent decline. This is important because those homes are our base employment housing, and they account for 80 percent of all of our sales.
The question it begs is: What caused the change? Is the market just taking a break after recovering the last six years? Is it the economy, either local or national? Is it the uncertainty of an election year? Is it the lower prices in the gas industry? Or perhaps the best question is: Is it the Animas River spill?
The answer becomes clearer when we have more history and we can look back and compare the trends to other markets, locally, statewide and nationally. I am going to make a case for the Animas River spill and contamination. The Gold King Mine flood into the Animas River happened on Aug. 5. From a real estate perspective, most contracts are 45 to 60 days in duration, so decisions to purchase real estate in our area made prior to Aug. 5 would not significantly affect August and September sales. In fact, La Plata County residential real estate sales were up 6.9 percent in August and 19.8 percent in September, yet they fell 34.2 percent in October. The numbers are based on sales data from the Colorado Real Estate Network.
Let’s look at our surrounding areas: Montezuma County and Archuleta County. October residential sales were up 9.8 percent in Archuleta County and 36.7 percent in Montezuma County. This is not conclusive proof, but it certainly supports data to potentially show that La Plata County has been impacted by the Gold King Mine spill.
Another statistic that is alarming and was likely impacted by the national news coverage of the Animas River spill, involves residential real estate activity for $1 million-plus homes in La Plata County. Real estate professionals expect strong activity in the top end of the fall market, and it has traditionally been productive because of buyers from other geographic regions. As of Nov. 3, there are 90 homes on the market in La Plata County for more than $1 million, and only one is under contract.
The other contributing factor for the drop in sales, of course, may be weakness in the “gas patch.”
In conversations with other Realtors, the Animas River spill will probably not have a long-term impact on the market. From my review, it certainly appears that it could have been the significant factor impacting the entire fall market, including November and December. Of course, only time will tell.
Don Ricedorff is a Realtor at The Wells Group in Durango and a past president of the Durango Area Association of Realtors. He can be reached at email@example.com.