A historically low inventory of homes for sale continues to be the greatest factor constraining the Durango real estate market, industry officials said Wednesday at The Wells Group’s annual real estate forecast.
“The biggest issue right now is inventory,” said Bob Allen, a Durango real estate appraiser and analyst. “It’s near a record low.”
The situation is expected to ease somewhat as sellers come to the table and homes are constructed. But real estate professionals said at the forecast that tight inventory is expected to persist.
Typically, inventory grows by about 30 percent from winter to summer as homeowners look to sell, Allen said.
Some home construction will help ease the dearth of available homes, said John Wells, owner-broker of The Wells Group.
“The inventory coming online is going to be positive – we just don’t think it’s going to be enough,” he said.
Wells pointed to ongoing home construction in the Edgemont Highlands, Three Springs and Twin Buttes developments.
Low inventory in Durango will spur sales in outlying areas, including rural Durango, in-town Bayfield and Forest Lakes, Wells said.
The Wells Group predicted a 17 percent increase in residential sales in 2014 to 1,351. Homes will appreciate at an 8 percent rate, primarily in Durango, the brokerage said.
The 14th annual Wells Group real estate forecast was held at the Community Concert Hall at Fort Lewis College.
Other trends that were noted in the forecast:
The apartment rental market continues to be extremely tight. In a December survey conducted by Allen’s firm, Allen & Associates, only four of 540 units surveyed were vacant – less than 1 percent.
Construction contractors will be busy. As Allen said, “Construction is going to go up. The market’s going to work. It’s going to respond.”
Buyers are snapping up smaller homes. The average new Durango home has fallen to about 1,700 square feet, down from about 2,300 square feet, Allen said.
The impact of higher mortgage interest rates and stricter lending rules is unclear but something to watch for this summer.
Population growth will drive strong demand for housing.
The supply of unimproved vacant land remains high. Most land sales are for lots costing less than $250,000.
Ninety percent of single-family home sales in the Durango area are for less than $600,000. Yet sales of million-dollar homes are beginning to recover.
Foreclosures and distressed properties are “almost a nonissue” locally, Allen said.
cslothower@durangoherald.com
