The number of homes sold in La Plata County was down during the second quarter of 2024.
Durango Area Association of Realtors’ quarterly real estate statistics show that La Plata County residential real estate was down 29 units, or 8.1%, from the second quarter of last year.
High interest rates continue to play a factor in buyers’ and sellers’ decision to enter the market. John Wells, owner of The Wells Group, said interest rates have an impact on sellers entering the market because they are typically buyers who purchased their home when interest rates were at around 3.5%.
Interest rates reached as high as 7.3% during the middle of second quarter 2024 but have recently dropped into the 6% range.
When rates are in the 6% to 7% range, existing homeowners think twice about selling and tend to move toward other options such as remodeling their current house, Wells said.
That means fewer homes hit the market as a result.
“To put things in perspective, interest rates are higher than they were post-pandemic artificially reduced rates,” Wells said. “In order to keep the economy rolling, the fed brought interest rates down.”
Wells said it isn’t overly abnormal to see interest rates in the 6% to 7% range, but buyers and sellers have become accustomed to seeing lower rates resulting from the COVID-19 pandemic.
But buyers are also deterred by increasing insurance rates. Wells said the cost of insuring a home has almost doubled.
The entire state suffers from the potential risk of wildfire, and as a result insurance companies are jacking up rates, he said.
But Wells said he has seen some increase in “buying activity.”
“Remember, these days almost all mortgages can be refinanced without penalty,” he said.
That means if a person buys a home at a 6.7% mortgage rate and that rate goes down, the buyer can refinance in order to get that lower rate.
Wells said housing inventory issues continue to plague the area. He said La Plata County is still in a position where demand outweighs supply.
“Unfortunately, we have the perfect storm of demand for residential real estate. (It) has grown post-pandemic and its grown because builders didn’t build during the pandemic,” he said. “Then, we saw some in-migration from people who were working remote jobs. And then pent-up demand from people who didn’t make home purchases during the pandemic.”
La Plata County median home prices appear to be leveling off. They had just a 0.3% increase in median price from second quarter 2023. Homes are now sitting at $643,937, only a $3,000 increase from the previous year.
Wells said this is mainly because there is higher density of homes within the county, and with more homes, there’s a variety of prices.
However, Durango in-town homes saw another hefty bump in median price. This quarter, the median price rose 13% putting in-town homes at $865,000 compared with $760,000 during second quarter 2023.
According to DAAR’s data, the median cost of Durango Mountain homes – those around Purgatory Resort – dropped from just over $2.1 million to around $1.5 million since second quarter 2023. But Wells noted Durango Mountain home and Durango Mountain condominium numbers are a bit skewed based on the number of units sold.
“It’s way off because it such a small number of units,” he said.
In second quarter 2023, there were 12 Durango Mountain homes sold versus 2024 when only eight had been sold. He said the same applies to Durango Mountain condominiums.
Durango Mountain condos and townhomes shot up to a median price of $700,000 in second quarter 2024 compared with $400,000 in second quarter 2023.
While only 27 condos were sold second quarter 2024 versus 45 in 2023, the cost of the condos purchased was much higher.
“When you have less than 50 units sold, you really have to look at what inventory sold,” Wells said.
In this case, a new condo complex built by Glacier Club drove the median price up, he said. Twelve high-end Glacier Club condos were sold during the second quarter.
Durango condos and townhomes saw an 18.1% decrease in median price during second quarter 2024, which again is reflected by the price of the condos sold not the value of condos in general, he said.
tbrown@durangoherald.com
