Real Estate Market Poised for Buyers

Real Estate Market Poised for Buyers


HI THERE AND A VERY HAPPY NEW DECADE TO YOU!
MY NAME IS DAN KORMAN AND THIS IS THE DURANGO REAL ESTATE UPDATE, JANUARY 2020 EDITION. WHEN SHOPPING FOR A HOME, YOU HAVE TO TRY
AND BALANCE THE COST WITH THE KIND OF HOUSE YOU WANT IN THE LOCATION THAT SUITS YOU BEST,
AND IN A SMALL MOUNTAIN TOWN LIKE DURANGO, IT CAN BE DIFFICULT TO FIND WHAT YOU’RE
LOOKING FOR. ONE OF THE MOST COMMON COMPLAINTS I HEAR ABOUT OUR MARKET IS HOW UNAFFORDABLE
IT IS TO BUY A HOME. AND WHILE THE PRICE TAGS ARE SOMETIMES SHOCKING, IT REMAINS THAT YOU
CAN STILL GET A DARN GOOD HOME FOR A DECENT PRICE. YOU JUST HAVE TO PUT ME TO WORK FOR
IT! LET’S TALK ABOUT PRICING AND AFFORDABILITY
FOR A MOMENT… DURANGO IS LOCATED NEXT TO THOUSANDS OF ACRES OF NATIONAL FOREST, IS
25 MINUTES FROM PURGATORY, HAS MORE RESTAURANTS PER CAPITA THAN SAN FRANCISCO, AND HAS THE
ANIMAS RIVER RUNNING THROUGH IT YEAR ROUND. IT’S NOT EXACTLY YOUR RUN-OF-THE-MILL TOWN.
SO FOR THOSE OF US WORRIED ABOUT THE PRICING, ALL YOU HAVE TO DO IS TAKE A LOOK AT OUR NEIGHBOR
TELLURIDE FOR SOME CONTRAST: I OFTEN GET ASKED ABOUT THE DIFFERENCES BETWEEN
AVERAGE AND MEDIAN PRICING, BOTH OF WHCIH YOU’LL SEE ON THIS GRAPH SHOWING TELLURIDE.
AND THEY WANT TO KNOW WHEN BEST TO USE EACH WHEN EVALUATING VALUES AND TRENDS. I LIKE
TO LOOK AT BOTH NUMBERS TO SEE WHAT KIND OF DIFFERENCES THERE ARE. IF THE AVERAGE PRICE
IN A PARTICULAR AREA IS HIGHER THAN THE MEDIAN FOR THE SAME TIME PERIOD, LIKE IN DURANGO
FOR INSTANCE, THAT TELLS YOU THAT THE AREA CONTAINS SIGNIFICANTLY HIGHER-PRICED HOUSES
THAN THE MEDIAN BUT IN THE SAME TIME FRAME, SALES WERE STRONG IN THE LOWER PRICE RANGE
AS WELL. IF YOU LOOK AT TELLURIDE’S NUMBERS, THE MEAN AND MEDIAN ARE VERY SIMILAR, LEADING
US TO BELIEVE THAT NOT A WHOLE LOT OF HOMES ARE SELLING BELOW THE $1 MILLION MARK. THE THREE MARKETS THAT I TYPICALLY LOOK AT
ARE SINGLE FAMILY HOME SALES IN-TOWN DURANGO, BAYFIELD, AND LA PLATA COUNTY AS A WHOLE.
THIS GRAPH SHOWS THE AVERAGE SALES PRICES OVER THE LAST DECADE IN THESE AREAS: OVERALL, DURANGO HAS SEEN A HEALTHY 4.8 PERENT
INCREASE IN THE AVERAGE SALES PRICE OVER THE LAST YEAR. WHEN LOOKING AT THE ROLLING 12-MONTH
AVERAGE, LA PLATA COUNTY REMAINED FLAT YEAR OVER YEAR, AND BAYFIELD SAW BIG GAINS OF 13
PERCENY DUE TO THE INCREASE IN SALES VOLUME THIS YEAR. DURANGO’S AVERAGE PRICE OF $582,000
IS A PRETTY BIG JUMP FROM THE MEDIAN OF $507,000, WHICH IS ALMOST TWO TIMED WHAT THE AVERAGE
PRICES WERE IN LATE 2012, EARLY 2013. AND IF YOU WERE LUCKY ENOUGH TO BUY A HOME SHORTLY
AFTER THE GREAT RECESSION, THEN YOU’D BE SEEING APPROXIMATELY 8 PERCENT RETURN ON YOUR
INVESTMENT ANNUALLY SINCE 2010. WHAT A DECADE! DURANGO SAW A SLIGHT DECREASE IN BOTH SALES
VOLUME AND NUMBER OF UNITS SOLD LAST YEAR, ONE OF THE FIRST TIMES WE’VE SEEN A DECREASE
YEAR OVER YEAR IN THE LAST 10 YEARS. THIS IS DUE IN LARGE PART TO THE INVENTORY INCREASES
WE SAW IN Q3 AND Q4 WHICH GAVE A LITTLE PRESSURE RELEASE ON PRICING, THAT COUPLED WITH THE
HUGE SNOW EARLY ON IN THE YEAR MADE FOR A LITTLE BIT LIGHTER YEAR IN VOLUME BUT OVERALL
A VERY HEALTHY AND VIBRANT MARKET IN THE SAME VEIN OF AFFORDABILITY, ANOTHER QUESTION I
GET A LOT IS WHETHER MY CLIENTS SHOULD RENT OR BUY, AND THAT’S A TOUGHIE. FINDING AN
“AFFORDABLE” HOME TO RENT IS NO WALK IN THE PARK EITHER. IT’S, IT’S TOUGH. HERE IN
DURNGO, THE AVERAGE RENTAL RATE ON ZILLOW FOR A HOUSE WITH THREE OR MORE BEDROOMS IS
$2,200 A MONTH! FOR THAT AMOUNT PER MONTH YOU CAN BE MAKING PAYMENTS ON A MORTGAGE OF
$367,000 WHICH IS A $460,000 HOUSE. I’M OF THE MINDSET THAT IF YOU CAN BEAR DOWN,
LIVE IN A CLOSET FOR A WHILE, AND SAVE THE MONEY, THE GROSS ANNUAL RENT OF $26,000 PLUS
THAT YOU’D BE SAVING, IT COULD BE HALF OF YOUR DOWN PAYMENT ON A $450,000 HOME. CURRENTLY
THERE ARE 43 SINGLE-FAMILY HOMES IN DURANGO PRICED UNDER $460K, SO LET’S COME UP WITH
A PLAN TO GET YOU OUT OF THAT RENTAL AND QUIT WASTING YOUR MONEY! THIS IS THE YEAR FOR MILLENNIALS! WE HAVE
MORE HOMES ACTIVELY FOR SALE ON THE MARKET THAN WE’VE HAD SINCE JANUARY OF 2016. THE
MILLENNIALS ARE NOW MOSTLY IN OUR 30S. WE HAVE JOBS. WE’RE FEELING THE PRESSURE TO
BUY NOW THAT WE’VE BEEN RENTING FOR TEN PLUS YEARS. DO THAT MATH! IT’S NOT PRETTY. SO, OVERALL, DURANGO’S REAL ESTATE MARKET
IS POISED, IT’S POISED TO CONTINUE INTO 2020 AND BEYOND. WITH INTEREST RATES EXPECTED TO
REMAIN NEAR THE 4 PERCENT MARK, WHICH IS AN INCREDIBLE NUMBER, AND DEVELOPMENTS SUCH AS
TWIN BUTTES, THE EDGMONTS, THREE SPRINGS, AND SEVERAL OTHERS CONTINUING TO ADD INVENTORY,
THE EARLY PART OF THIS YEAR. IT WILL BE AN INCREDIBLE TIME TO TRY AND SNAG A DEAL ON
SOME OF THE INVENTORY THAT’S BEEN SITTING ON THE MARKET FOR THE LAST FEW MONTHS. FOR MORE INFORMATION PLEASEVISIT MY WEBSITE
AT ALPENGLOWPROPERTIES.COM AND FEEL FREE TO GET SOCIAL WITH ME @DURANGOBROKERS ON FACEBOOK,
INSTAGRAM AND TWITTER; IF YOU’D LIKE SPECIFIC MARKET INFORMATION FOR YOUR NEIGHBORHOOD FEEL
FREE TO EMAIL [email protected] . AS ALWAYS IT’S BEEN A PLEASURE SHARING THE
DURANGO REAL ESTATE UPDATE WITH YOU, THANKS FOR WATCHING.

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