La Plata County in 2014 largely saw a continuation of trends that began in 2013. Building bounced back in a big way. Real estate transactions plateaued, while home prices rose. Foreclosures fell dramatically, indicating homeowners found more financial stability.
So what does 2015 hold? Here’s a look at what industry insiders and analysts are expecting in 2015:
Residential real estate
The market will have strong demand for homes under $400,000, industry officials said.
That price point is the heart of the market. Durango in-town homes sold for a median price of $390,000 during the third quarter of 2014. For La Plata County combined, the median sales price was $336,200.
“We’ll see continued demand for that under-$400,000 market,” said John Wells, owner-broker at The Wells Group in Durango.
Outlying areas may see stronger market activity in 2015, Wells said.
“I think we’ll see Bayfield continue to see good strong activity, also Forest Lakes,” he said.
Low gasoline prices may make workers more willing to commute into Durango, boosting the appeal of the city’s bedroom communities, he said.
Residential transactions plateaued in 2014. According to the Multiple Listing Service, there were 1,030 residential transactions in La Plata County in 2014, a slight decline from 1,036 in 2013.
2014 also was notable for a comeback in million-dollar sales. That could be affected in 2015 by a number of factors, from volatility in the stock market to the price of crude oil.
Many of the area’s luxury-home buyers earned their fortunes in the natural gas and oil industries in Texas and Oklahoma. Falling oil prices could make that demographic less willing to pay big bucks for a vacation home.
Home prices
Home prices rose 8.7 percent in Colorado from the third quarter of 2013 to the third quarter of 2014, Richard Wobbekind, executive director of the Business Research Division at the University of Colorado, said at the Southwest Business Forum last week.
Durango and La Plata County both saw strong gains. Durango home prices were up 5.7 percent in the third quarter from a year earlier. County homes saw an impressive 9.2 percent gain, according to Durango Area Association of Realtors data.
Fort Lewis College professor Robert “Tino” Sonora noted some analysts expect U.S. home prices to fall in 2015. If that happens, local market conditions will follow, he said.
The notion that Durango exists in a bubble unaffected by market conditions has been disproved, he said.
“We’re not any different it turns out,” he said.
National Association of Realtors chief economist Lawrence Yun forecasts 4 percent home appreciation in 2015.
Kiplinger financial magazine forecasts a 3.5 percent rise in home prices.
Sonora related one tip about Durango home prices, based on a former colleague’s research: Watch San Diego. The real estate market in La Plata County most closely follows what happens in San Diego, he said.
If true, that could signal a slip in Durango home prices in 2015. The Case-Shiller Home Price Index for San Diego fell 0.26 percent for the three months preceding October.
Construction
Residential construction is expected to continue apace in areas such as Edgemont Highlands and Three Springs in 2015.
Developer Mark Williamson is seeking to build 14 townhomes at Florida Road and Colorado Avenue.
A major apartment building, Arterra, is on tap for Three Springs. The Timberline Group is set to build 101 apartments and nine townhomes in a mixed-use development with 2,189 square feet of retail space and 680 square feet of office space.
FCI Constructors of Durango is building the 50-unit Lumien Apartments at 32nd Street and East Animas Drive.
There are also a number of commercial projects underway, including SoundTraxx’ headquarters in the Durango Tech Center and a Discount Tire store near Walmart.
Two hotels are slated to be built: La Quinta Inn & Suites at Mercury Village in south Durango and a Fairfield Inn and Suites at 21719 U.S. Highway 160 west.
Construction created a whopping 565 jobs in La Plata County from Jan. 1, 2013, to March 31, 2014, according to the Colorado Department of Labor and Employment.
The industry is expanding statewide. “Construction has been coming back rapidly,” Wobbekind said.
All that expansion is putting pressure on construction firms to raise wages, he said.
“They’re seeing incredible wage pressure in the construction industry,” he said.
cslothower@durangoherald.com
