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Home prices up, sales down during third quarter in La Plata County

High interest rates a ‘nemesis’ for prospective homebuyers
Median home prices are up and inventory is down across most of La Plata County. Real estate agents say high interest rates are dissuading rate-dependent people from buying. (Durango Herald file)

Median home prices are up and transactions are down compared with the same time period last year in La Plata County, according to third-quarter statistics.

However, real estate agents say things are picking up with more homes joining the market.

According to the Durango Area Association of Realtors, 40% to 50% more homes sold during the third quarter this year in nearly every market area compared with the first and second quarters.

Meanwhile, the median home price increased in nearly every market area this quarter compared with the same time frame in 2022. Median prices this quarter included:

  • $791,500 in Durango, a 9.2% increase.
  • $530,000 for Durango condos and townhomes, a 14% increase.
  • $850,000 for country homes near Durango, a 9.4% increase.
  • $477,500 in Bayfield, a 6% increase.
  • $524,750 for country homes near Bayfield, 3.8% decrease.
  • $657,000 across La Plata County, a 7.7% increase.

More homes are slowly being added to the market, despite high interest rates, said John Wells, real estate broker at The Wells Group.

“Inventory is starting to grow a little bit,” he said. “We’re probably back to the new normal, and inventories still aren’t where they were pre-COVID.”

As of Wednesday, there were 289 homes on the market in La Plata County, he said. By comparison, there were 500 residential listings in January 2020, 551 listings in June 2020, 132 listings in January 2022 and 154 listings in February of this year, he said.

“So clearly, we’re about double the all-time low,” Wells said.

High interest rates have been a “nemesis” for many prospective homebuyers, he said. If someone with a 3% or 4% interest rate wants to move to a house across the street, they will think twice before taking on an 8% interest rate.

“You’re going to hate to give up that 3 or 4% interest rate,” Wells said.

The same is true for people who want to move here, he said. However, many people looking to move to Durango are retirees, second-home buyers or people seeking a lifestyle change, which makes them more willing to endure high mortgage rates. Likewise, cash buyers are largely immune to high mortgage rates.

The high rates are not without precedent, Wells said. Homebuyers in the late 1970s and early 1980s also experienced high mortgage rates. People tend to remember the lowest rates they’ve ever paid and the highest rates they’ve ever paid, he said.

Kim Penny, managing broker with Legacy Properties West Sotheby’s International Realty, said buyer interest has slowed as a result of low inventory and high interest rates.

“We do still have buyer interest, but that has slowed and they don’t seem to be as anxious to purchase,” she said. “They’re taking a little bit more time with their selection.”

For homes worth $1.5 million or more, cash buyers are still purchasing them, she said.

Homes in the Durango Mountain Resort area were selling for more than the asking price the last couple of years, she said, but that is beginning to stabilize with resort homes selling at asking price or just below asking price.

With high interest rates and limited inventory, Penny said the supercharged real estate market that included double-digit year-over-year price increases in 2021 and 2022 will likely slow down.

Still, Durango’s real estate market seems to be on firm footing compared to metropolitan areas nationwide, she said.

“I think compared to the overall national market, Durango is still a healthy market,” Penny said. “I feel like we are localized enough and there’s such a demand to live in the smaller mountain towns in general that I think we’re still going to be a healthy market in spring.”


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