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Tourism boosts homes sales, real estate experts say

Strong snowpack to translate to more 2019 visitors, forecast says
Bob Allen, owner of Allen & Associates, a real-estate appraising and consulting firm, said limited inventory of houses priced below $600,000 might limit the total number of home sales in 2019. Allen spoke at the 19th annual Wells Group forecast held Wednesday at the Community Concert Hall at Fort Lewis College.

A good snowpack not only helps Purgatory Resort, spring rafters, farmers and ranchers, it helps Realtors, too.

Wells

“Farmers say we need about 140 percent of snowpack to get out of extreme drought, and folks, we might be there,” John Wells, owner broker of The Wells Group, told a crowd of about 250 people who attended the 19th annual Wells Group Forecast on Wednesday night at the Community Concert Hall at Fort Lewis College.

According to the Natural Resources Conservation Service’s Colorado SNOTEL map, the snowpack feeding the river basins of Southwest Colorado was at 145 percent of the 30-year average as of Tuesday.

Wells said Purgatory Resort has seen a 50 percent increase in skier visits compared with the dry winter of 2017-18, and the heavy snowpack bodes well for tourism throughout the year – benefiting rafters and operating conditions for the Durango & Silverton Narrow Gauge Railroad.

“Visitors become homeowners,” Wells said. “Tourism is the golden goose, and we expect a great tourism season. It’s crucial to market the area to tourists. Tourists don’t shop on Amazon when they are here.”

Allen

Bob Allen, owner of Allen & Associates, a real-estate appraising and consulting firm in Durango, estimated tourism was down 17 percent in 2018 from 2017, largely because of the 416 Fire and the drought, but he, like Wells, was optimistic about 2019.

“They’re going to come back, they always do,” he said.

Both Wells and Allen said new direct flights from Durango to Chicago will increase awareness of the area in a new market in the Midwest and possibly lead to a new stream of migrants.

Retirees are increasingly finding La Plata County an attractive retirement town, and Allen estimated retiree-generated jobs in La Plata County at 3,419 in 2018, and that number is expected to climb to 4,939 by 2025.

A dwindling supply of homes priced under $600,000 in La Plata County will continue to be a problem in 2019. Allen said the lack of supply will eventually translate into fewer transactions, a decrease in sales that could happen this year after relatively stable transaction numbers from 2016 to 2018.

More people would like to live in La Plata County than can be supported by the current housing stock, and Allen said the addition of 194 units at the Rocket Pointe apartments will help increase the vacancy rate in the rental market that he estimated at 3.2 percent.

“The vacancy rate may creep up a bit, but it will still remain pretty darn low,” he said. “It won’t go low enough to put downward pressure on rental rates, though.”

Wells agreed with Allen: If more housing existed, it would be rapidly filled by migrants.

“There aren’t enough places to live here for the people who want to be here,” he said.

Both men also said a lack of inventory in Bayfield and Forest Lakes harms the availability of attainable housing in the county.

Rising construction costs, Wells said, will not help in providing more inventory of houses priced below $500,000.

Wells said construction costs rose 5.7 percent nationally in 2018, and homebuilders have told him costs are rising even more in Southwest Colorado.

Allen said, “It’s hard to find labor.”

parmijo@durangoherald.com

Colorado SNOTEL Map March 12, (PDF)

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