After a few years of rising median home prices, it appears the La Plata County housing market is returning to a more static state.
Median home prices increased in almost every category tracked by Durango Area Association of Realtors during the second quarter of 2023, but they are not skyrocketing like in previous years.
“Since 2020, median home prices were increasing at an unsustainable rate, and the increases that we see now are more in line with the market pre-COVID,” said DAAR President Deven Meininger.
The median price of La Plata County homes increased 2.4% from the second quarter of 2022 to the same time period this year, going from $625,000 to $640,000. By comparison, it increased 18.6% from the second quarter of 2021 to 2022, going from $527,100 to $625,000.
Bayfield in-town homes saw a $46,450 jump from the second quarter of 2022 to 2023, going from $465,000 to $511,450. By comparison, the median price shot up by $80,000 during the second quarter from 2021 to 2022.
Bayfield country homes were the one category that experienced a decrease from the second quarter of 2022 to 2023, going from $585,000 to $540,000.
Meininger said more Bayfield country homes sold during the second quarter of 2023 compared with the first quarter, which is consistent with past market trends.
In-town Durango homes experienced only a 5% increase in median home price from this quarter compared with the same time last year, going from $718,375 to $760,000.
“The combination of rising prices and higher interest rates are making it more difficult for buyers in the Durango market,” Meininger said.
The area’s real estate market remains significantly impacted by an increase in interest rates. DAAR’s report says that many homeowners are not eager to give up their 3% interest rates for higher priced homes with interest rates ranging from 6.5% to 7%.
A strong indicator of this is that 30% fewer homes were sold during the second quarter of 2023 compared with the same time last year.
It was predicted during the first quarter of 2023 that interest rates would drop nearing the end of the year, but economists are now predicting that those decreases won’t likely occur until 2024.
“Mortgage prices stay strong during the higher demand times like spring, summer and fall,” said The Wells Group real estate broker John Wells.
In the Durango Mountain area, the second quarter median price for a single-family home came in at $2.24 million, up 29.1% from the $1.65 million median price for the second quarter of 2022.
For townhomes and condominiums in the Durango Mountain area, the second quarter median price was $405,000, a slight 0.4% increase from the $405,300 median price for the second quarter of 2022.
Wells said the area is starting to experience more inventory in the luxury home market but that homes under $800,000 are still very limited.
There were fewer homes sold in each category during the second quarter of 2023 compared with the same period in 2022. Wells said the number of homes on the market is the lowest its been in 30 years.
During the second quarter of 2021, 643 La Plata County homes were sold compared with 359 sold in the second quarter of 2023.
Meininger said that limited housing inventory and high interest rates were factors in the decrease. She said real estate agents aren’t seeing as many local homeowners move around in the market by upsizing or downsizing, and they want to keep a firm grip on homes they’re paying 3% interest on.
“It’s a supply issue. There’s brokers that have buyers in queue waiting for something to purchase but inventory is the necessity,” Wells said.
With the lack of inventory, property values may level off, but he does not foresee a significant decrease in price.
Wells and Meininger agreed it is still a seller’s market, but Wells said it is beginning to level out for buyers and sellers.
Meininger added that while the market will no longer bear above-market pricing, homes are selling in nearly half the time it took before 2020 and median prices continue to increase, showing pent-up buyer demand.
tbrown@durangoherald.com
