Real estate markets in Durango and La Plata County may be returning to pre-pandemic conditions, according to first quarter statistics and a broker with The Wells Group.
First quarter statistics released last week by the Durango Area Association of Realtors show homes are staying on the market for longer, a sign that things are beginning to slow down compared with the 2020 boom, said Deven Meininger, with The Wells Group.
The trend is especially prevalent with rural condo and townhome sales in the Durango area.
During the first quarter of 2022, Durango rural condos and townhomes stayed on the market an average of 43 days, according to DAAR data. But in March 2023, rural condos and townhomes stayed on the market an average of 74 days.
The trend held true for in-town Durango condos and townhomes. During the first quarter of 2022, those homes stayed on the market for 56 days compared with 83 days during the first quarter of this year, according the data.
Meininger said when homes are on the market for less time, it creates higher demand and leads to multiple offers on properties, which drives up prices. But during the first quarter of 2023, the median home price for some areas fell compared with 2022.
La Plata County homes saw a 12% decrease in median price during the first quarter of 2023 compared with the first quarter of 2022, dropping from $612,500 to $575,000. The total number of La Plata County homes sold also dropped by 33.8% during the same time period.
Durango country homes saw a slight 1.9% decrease in median price from the first quarter last year.
“We're starting to see where full list price is not what it’s actually selling for,” Meininger said. “I think that’s the biggest piece of it: When you have lower numbers to get to that median or average sales price, a lot of time there’s variation there.”
When homes stay on the market for longer, it shifts the power dynamic back to the buyer, she said.
Rising interest rates may be part of what is behind the downturn. In December 2020, mortgage rates were as low as 2.68%. But the rate now sits at 7.29% for a 30-year fixed rate, according to the Consumer Financial Protection Bureau.
“Once the interest rate bumped up, some buyers pause their search and then sellers had fewer buyers looking at their homes,” Meininger said. “So we didn’t see as many multiple offer situations and the prices weren’t being driven up by over-asking price sales.”
Bayfield experienced a significant decrease in median price from the first quarter last year to this year, in both country and in-town homes.
During the first quarter of 2022, Bayfield in-town homes had a median price of $449,900. So far in 2023, it has seen an 11.6% decrease to $397,500.
For Bayfield country homes there was a 28.2% decrease in the median price going from $625,000 first quarter 2022 to $449,000 during the first quarter of 2023.
Meininger said fewer homes sold in Bayfield compared to La Plata County overall, which could help explain why the median price was so much lower in Bayfield.
“When you’re looking at fewer numbers, at a much lower price sale, that really moves the needle on where the average and median prices are coming in,” she said.
The number of Bayfield country homes sold during the first quarter of the year have been on the decline over the past few years. In the first quarter of 2021, there were 29 Bayfield country homes sold. During that same period in 2022, there were 23 sold and in 2023, only 15 were sold.
Five fewer in-town Bayfield properties sold during the first quarter this year compared with the first quarter in 2022.
Yet, median prices continued to increase for Durango in-town homes during the first quarter of 2023.
During the first quarter of 2023, the median in-town home price reached $750,000 which was a 12% increase from first quarter 2022.
DAAR said in its summary of the statistics that the Durango and La Plata County real estate market continues to experience a housing inventory shortage but a snowy winter could change that later this year.
Meininger said anytime there is a winter with heavy snow, people tend to put their houses on the market. She said that is a result of people becoming tired of maintaining their property during heavy snow.
“Now that pricing has stabilized a little bit and interest rates have stabilized, it’s more of a safer choice for them to move around in the market,” she said.
She added that interest rates may drop slightly by the end of year based on early economic forecasts.
“It’s really important to watch what particular market segments are doing because we’re starting to see some variation, but I don’t think that we’ll see a drop in median price overall,” Meininger said.