Hammers are swinging and saws are buzzing in the greater Durango area, with numerous housing units on track to come online this spring and summer across La Plata County.
The city of Durango anticipates issuing around 300 certificates of occupancy – well above the average of 170 certificates issued per year over the past five years, said Daniel Murray, the city’s development services manager.
That’s due in large part to two major projects that will be move-in ready this year:
- Residences at Durango, located at 21382 U.S. Highway 160, which includes 120 apartments targeted at income earners making 60% or less of the area median income.
- Mesa Verde Senior Living, which will offer 124 apartments on Crader Ranch Road in the Three Springs subdivision.
Some units are move-in ready at the Pine River Commons, a 66-unit apartment project in Bayfield, according to the Regional Housing Alliance of La Plata County. An additional 11 units are being built in Ignacio as part of Phase 2 of the Rock Creek housing project.
Prices continue to rise while the number of buyers continues to fall
According to the Durango Area Association of Realtors, the overall median home price in La Plata County rose 2.3% to $675,827 in 2024. Durango’s in-town market saw a 19% increase in median home price to $928,500.
In 2022, 139 homes were sold in Durango at a median price of $760,000. The number of homes sold in Durango in 2023 fell to 123 homes at a higher median price of $780,000. The trend continued last year, with 114 homes sold in Durango at a median price of $928,500.
A mild winter may have made life easier for Durango-area homebuilders when it comes to keeping projects moving. But Skywalker Construction owner Luke Hanson said fair building weather isn’t necessarily linked to more clients or orders.
Custom homebuilders in Durango said business is steady in early 2025, although there are fewer clients looking to build because construction costs remain high.
Hanson said the home construction industry boomed in the wake of the COVID-19 pandemic as city dwellers, freed by the ability to work remotely, sought to move to rural areas. But that trend slowed after interest rates rose.
The price per square foot for home building rose significantly during and after COVID-19, and once prices rise, they don’t always drop, he said. There are exceptions – the price of lumber rose to an all-time high during the pandemic, but it and other materials and products have stabilized, although they remain above pre-pandemic rates.
“We’ve seen materials and products stabilize,” he said. “But generally speaking, the price has gone up but hasn’t really come back down because the demand is still there.”
According to Trading Economics, an online compendium of historical and up-to-date commodity prices and stock exchange data, the price of lumber rose from $559 per 1,000 board feet in July 2020 to an all-time high of $1,711 in May 2021. As of Thursday, lumber was priced at $675 per 1,000 board feet.
Skywalker Construction couldn’t absorb the higher costs and passed them on to its clients, he said.
“I’m fortunate to have a good reputation and I’ve just been staying busy,” he said.
Ponderosa Builders owner Michael Hale said the homebuilder market is healthy in the sense that business is booming. But in terms of affordability, it isn’t. He’s frustrated that the market is so restrictive regarding who can participate.
“I could not afford myself. I could not afford hiring me,” he said.
Referencing the 2008 housing bubble and financial crisis, Hale said worries another bubble is forming and will eventually pop.
“The cost, in general, to buy a house or to build a house is astronomical,” he said. “Here it’s very expensive to buy or build, and eventually that has to adjust. Inevitably, there’s an adjustment associated with that type of a market.”
Like Skywalker Construction, Ponderosa Builders also operates on a cost-plus model, he said. He’s worked in general contracting for 26 years and has experienced booms and busts – hot markets and cold markets.
The Durango-area homebuilder market is hot but saturated, with many builders and fewer new, young workers entering the scene, he said. The conditions remind him of those in 2008.
“We (had) a lot of carpetbaggers here in a hot market, and then the bottom fell out, and the bubble burst. And, man, there were so many people looking for work because the hot market had inflated the amount of general contractors,” he said. “... There were too many of us here, and a lot of people left back to the cities. And it feels like that’s happening again right now.”
He said net housing costs are driven by a layered set of economic markups, including materials costs, political uncertainty – such as with tariffs – and increased regulations and fees, all contributing to heightened tension in the housing industry.
“It’s not only us,” he said. “We’re trying to give living wages to our employees or subcontractors, but we have a lot of markup on material because we’re not close to major thoroughfares like, let’s say, a city would be.”
cburney@durangoherald.com
