The real estate market’s return to higher volume and higher prices is a good thing from a number of angles, but it does not necessarily reflect how things are going for everyone who lives and works in Durango.
Last week’s retrospective (Herald, Jan. 21) on the 2013 Durango real estate market prompted a trip down my own memory lane when one of my former abodes was featured as the lowest-priced home to sell within city limits last year. Seeing the photograph did not trigger it, though, because the house has morphed just enough to draw a price that would have been laughable in 1998. The address got me, and it got me reflecting.
The house is on the south side, and the time I spent living there was transitional for a number of reasons. I had graduated college the spring before, gone on the requisite soul-searching trip that follows such milestones, planted a few thousand trees in Alaska, and driven back to the town – and the career – that the journey had revealed to me as home. The house on Sixth Avenue seemed as good a place as any to begin in earnest my adult life in Durango, complete with a real job as a journalist. For $750 a month, there were two bedrooms, a bathroom with a wide array of exotic fungi growing in the crevices – as well as a door that, with 18 inches between its bottom and the floor, provided little privacy for those on either side – and a washer and dryer. Deal.
Living there prompted the purchase of my first home that featured far fewer amenities than the rental, but a combination of scavenging and remodeling – for which I can’t take credit, but for design input – changed that, and before long I was a full-fledged participant in the Durango housing boom. And for less than the rent on the Sixth Avenue house.
Such a circumstance is difficult to find these days, in Durango or elsewhere, and seeing the sale price of my former home brought that into sharp focus. For $219,900, a buyer who put 20 percent down – a feat unto itself for many of us – would have mortgage payments of a little more than $1,000 a month, according to an estimate that includes a 4.5 percent interest rate over 30 years, with property taxes and homeowner insurance. That seems a bit high, considering the constraints of the house, which, admittedly, has seen some exterior improvements since my tenancy. But more importantly, it seems high, given the median household income in Durango, which was $53,173 between 2008-2012. A family with no debt and no other savings obligations could handle that home just fine; the range of affordable payments from conservative to aggressive, according to CNN Money, tops out at $1,460 per month. But that is for the lowest-priced home sold in Durango for last year. The median price for homes sold in town last year was $370,000 – great for those who bought low or struggled through the recession with high payments – but unattainable for median earners.
The math, even at the low end, does not leave a lot of wiggle room, and points out the challenges many Durangoans – current or would-be – face in finding housing, employment or workers. Wages are not necessarily high enough to meet the real estate market, which has chastened itself somewhat from the top of the bubble – the same house on Sixth Avenue sold in 2004 for $260,000 – and bottom lines are tight for many employers who are weathering the recovery, but perhaps not celebrating salad days.
The real estate market’s return to higher volume and higher prices is a good thing from a number of angles, but it does not necessarily reflect how things are going for everyone who lives and works in Durango. The story behind these and all such figures is a little more complex and makes the growing issue of income inequality all the more important to consider. When the middle-earners are essentially priced out of their community’s housing market, there are systemic issues at play. Those of us with timing and luck on our side may not see that quite so clearly.
Megan Graham is a Herald editorial writer and policy analyst. Reach her at meg@durangoherald.com.
