Working Americans are struggling with the rising cost of living – and communities like Durango may be hit even harder, according to Fort Lewis College economics professor Nathanael Peach.
Grocery prices are expected to keep rising, and housing remains unaffordable for many. Increases in La Plata County sales taxes and higher water and sewer fees in Durango – though slight overall – add pressure for those living paycheck to paycheck.
Grocers, economists and real estate agents say Durango’s economy is feeling strained – but some residents are hurting more than others.
Peach said Durango has a K-shaped economy: Higher-income earners – the upper leg in the “K” – face little trouble with rising costs, while lower-income earners – the lower leg – struggle with groceries, housing, credit card debt and more.
Data suggests consumer spending remains high, he said, but that mostly reflects higher income earners. Lower-income earners haven’t seen the type of income growth that would offset the higher cost of living, he said.
The U.S. suffered a “tremendous shock” during the COVID-19 pandemic, and several effects linger.
The country experienced its highest rate of inflation in decades after COVID-19. While the rate has slowed, 2025 ended with a 2.7% rate, he said.
Just because inflation is slowing doesn’t mean prices are falling. He compared it to mountain climbing: High inflation means a steep slope, but even low inflation still means climbing.
“We see this in the grocery store front-and-center,” he said. “Maybe a bag of chips: The price isn’t going up anymore, but it’s still considerably more expensive than it was even a couple of years ago.”
Mads Root, assistant general manager at Durango Natural Foods Co-Op, said some categories of groceries have fluctuating prices, but prices generally continue to rise.
Small businesses like the co-op can’t just eat lower margins and keep prices low when their costs go up like corporations can, he said.
“We’re a little bit more responsive than you might see from our competitors, and that’s typically because we need our staff to be able to afford to live in this town, which is a pretty difficult thing,” he said.
He said Durango Natural Foods Co-Op is best known for its deli and especially its produce. Dairy products, for example, haven’t had very notable price increases. But products like berries and avocados are a different story.
The co-op locally sources 25% to 30% of its produce throughout the year, he said, and even more so when locally grown produce is in season.
Sourcing locally does raise prices – a locally grown head of lettuce in the summer might cost $3.99 when an outsourced head of lettuce from California might cost $2.99 – but it’s worth it to keep local dollars circulating locally, he said.
Bananas and avocados, of course, must be outsourced because they can’t be locally grown, he said.
He said the co-op is feeling the strain from tariffs and supply chain issues like many other businesses. Warehouses are struggling to staff their facilities. The demand for more food is rising in communities like Durango, but sometimes there aren’t enough trucks delivering enough food to meet that demand.
“It’s just about who’s getting what from who, for how much at which time, and that seems to be constantly changing,” he said.
Root said he expects grocery prices will continue to rise.
Grocers with “razor-thin” margins will continue to bolster their prices in line with increasing costs, he said.
“Everything’s just kind of so back and forth right now, with supply chain issues and everything’s been a little wacky,” he said. “Even before this new administration, just post-COVID, everything has been just up and down and up and down – but overall, just going up.”
A glance at multiple listing service statistics for 2025 released by the Durango Area Association of Realtors on Wednesday gives the impression that the median home price in Durango fell by 8.5%. But it’s a bit more complicated than that, said Heather Erb, president of the DAAR Board of Directors.
One hundred twenty-five in-town Durango homes sold at a median price of $850,000 last year, down 8.5% from 114 homes that sold at a median price of $928,500 in 2024.
Two hundred seventy-seven country homes in the Durango area, however, sold for a median price of $930,000 last year, compared with 283 country homes selling for a median price of $845,000 in 2024.
That indicates the housing market is “cruising right along” at a steady pace, Erb said.
“It’s real hard to tell – unless you have the same house that sold two years in a row – whether the prices are going up or down,” she said. “But yes, the in-town prices do reflect the median went down 8.5% if you’re just looking at those numbers.”
Erb said there is more housing inventory than there was during the pandemic. At that time, there was an influx of people fleeing the cities for rural communities such as Durango. That resulted in people buying up homes, reducing available housing stock and driving up prices.
Just eight fewer homes were sold in 2025 than in 2024, but there are now more homes on the market, she said. That means sellers can’t get away with “insanely high” prices like they had during the pandemic.
“The supply and demand is sort of equaling out, and you’re seeing more and more homes on the market,” she said. “There’s more affordable housing … and it’s going to help renters and owners alike that there’s more to choose from. That’s a much more resilient community.”
The Durango area still has a way to go, though. It still lacks the inventory it had pre-pandemic.
“There needs to be more on the market for people to have a decent amount of homes to choose from,” she said. “We’re always trying to achieve that balanced market, instead of it being a seller’s market or a buyer’s market. Balanced markets are good.”
There are other forces at play that should be considered too, she said. Insurance costs and homeowners association fees have skyrocketed, impacting people who live in condos, town homes and apartments.
She said costs are rising for tenants, landlords and homeowners alike, with insurance becoming harder to obtain because of wildfire risks. Landlords are feeling forced to raise their rents in order to break even, and people’s ability to afford housing continues to be impacted.
While Durango’s economy is K-shaped, it’s also a sponge, said Audrey Royem, economic development coordinator for Region 9 Economic Development District of Southwest Colorado.
Money flows into Durango through tourism, remote worker incomes and second home wealth, she said. Workers may be earning more wages, but those wages are mostly spent on housing.
In a “normal” economy, she said, wage earners typically spend about 30% of their income on housing. But Durango workers are currently spending upward of 60% on housing.
“These strains on the household income show up in our local economy. People, they’re working just as much but they feel poorer,” she said. “They’re not able to buy the goods and services that they would like. Businesses can’t retain staff. People have to move more regularly. Maybe they come here with hopes and dreams, and those are squashed. Employers therefore can’t expand.”
Housing is key to addressing the present cost-of-living problem, she said, because lack of affordable housing creates family and community instability. People have to move and community volunteerism declines with people’s lack of free time. Schools and health care struggle when teachers and nurses can’t afford to live where they work. The economy becomes brittle.
Royem said the community needs to address tough questions about its values.
“If we can’t afford to live here, what kind of a community, what kind of a life are we actually creating?” Royem said.
Does Durango want to be an “enclave” for people with very high incomes, Peach asked. Or does it want to be a democratic or egalitarian community, where some people will surely earn higher incomes than others, but there’s a place for everyone to make a living for themselves.
Politics and policies will reflect the answer, he said.
“What do we want our community to look like, what types of people ought to be able to live here are things worth thinking about and debating and discussing,” he said.
cburney@durangoherald.com
