$8,000 Tax Credit..Is It Affecting Lower Priced Sales?

What affect has the $8,000 first time home buyer tax credit had on the lower priced real estate market in Durango and throughout La Plata County? As many of you know, the Durango real estate market has certainly been affected by the drop in the national economy for the last couple of years. Durango Real Estate Sales Statistics. Overall sales volume, depending on the specific area of the county and price range, has dropped roughly 40%. I recently reviewed the residential sales for the last 120 days in this County and came up with the following sales statistics. Please note this is for homes/condos only and only sales that occurred within La Plata County, so that would include Durango, Bayfield, Ignacio and the rural areas around each of those towns.




In analyzing the data it is clear that the “sweet spot” is $300,000 and under. It is interesting to note that nearly 70% of all the sales have come from homes priced at $400,000 and under. When compared to the available inventory of homes note the large difference in the percent of sales versus the number of properties available in that particular price range. The buyers are certainly gobbling up the lower end price range of homes while the higher priced properties are just sitting almost stagnant on the market. First-time homebuyers tend to buy in that lower price range, so these numbers would certainly seem to suggest that the tax credit is having an effect here for sure.

In order to truly come to a correct conclusion, I feel it would be necessary to compare the sales in 2008 versus the sales in 2009 for that same time frame and price brackets. The chart below uses all residential sales in La Plata County from June 1 through October 1 of the appropriate year.



This chart even more graphically demonstrates the impact of the tax credit on homes priced $300,000 and under. Look at the huge differences in the bottom three categories. It is clear that the product mix of what is being sold is $300,000 and under and there is very little doubt in my mind that what is driving that is the $8000 first time home buyer tax credit.
There are still opportunities out there to obtain that credit, but window of opportunity will soon be closed. Generally speaking, it takes 30 to 45 days to get a loan approval... could be done faster with A+ credit and good steady employment... so it's pretty clear that somebody needs to be under contract on a home of their choice by mid-October or they will quickly be out of luck.
Team Lorenz has two excellent buyer specialists whose only function is to work with buyers and help them find properties. If you're one of those people seeing the window of opportunity getting smaller and smaller, please give us a call today and would be tickled to get you into your first home. Buying Durango real estate can certainly be a daunting task, but with her many years of experience in successful closing of thousands of transactions, we will take you through the process and hopefully have it be into an enjoyable one. To learn a little bit about our Team, click here. Team Lorenz

Buyer Agency... Having Someone Represent You.

Navigating your way through Durango real estate can certainly be a daunting task. If you are a prospective buyer from out of the area, it's hard for you to know the benefits of the various subdivisions and building projects that we have around the County. Nearly all subdivisions will have rules and regulations, called CC&R's, that define what you may or may not be able to do in that development. Let's say that you wanted to have horses and you are told that horses are allowed in a particular subdivision. It would not be unusual to see that there might be a limit as to the number of horses that you could have. In the Shenandoah subdivision, for instance, you have to have 5 acres in order to be allowed 2 horses. No horses are allowed if you have less than 5 acres. A Buyer Specialist will be able to find out this information for you.

Many buyers have campers, motor homes or RVs that they would like to park on their property. That is the type of thing that could easily be covered in the CC&R’s. You need to be certain that you get all of those rules and regulations ahead of time. An experienced real estate broker is very vital in helping you work your way through those sorts of issues when buying Durango real estate. Our Team is set up quite a bit differently than anybody else here in town. Lisa and Nicole are Buyer Specialists whose only job is to work with buyers. They may each see 100 properties or more a month so they truly know the market extremely well. I often kid them and say: “I have a buyer who wants pink carpet in the hallway...” and I'll get a response that says they know three homes just like that. Knowing the product that is available and then matching it to your specific needs is very important.

Another important advantage of having a Buyer Specialist work for you is that you can have an advocate on your side. A Buyer Specialist does not represent the seller; they represent you, the buyer.

Having a Buyer Specialist on your side is definitely to your advantage. ”Does it cost me anything to have a Buyer Specialist on my side?” is a question I often hear. In Colorado, the seller is allowed to pay the buyer brokerage commission and in probably 99% of the transactions that is exactly what happens.

If you're at that spot where you're ready to look for real estate in the Durango area please give us a call and we will have one of our Buyer Specialists take care of you. Please Click Here to learn a little bit more about our team.

When Is the Best Time to Buy?

That is a great question but it's also the one I have an answer for. Having been in the real estate business for 33 years... and over 25 of them in Durango in particular... I know the market here extremely well. Once you hit Labor Day, the first week of September, sellers get very nervous and you see even more price reductions. In addition, buyers are often able to negotiate much harder with the seller because they know that seller really wants to be out of that house before the snow flies. Generally speaking, the inventory is down a bit because of the summer sales, but this year we have seen more properties come on the market and because of the slowness of the market the inventory has not been reduced.

That combination of high inventory and motivated sellers really will help buyers. This is not the time to be sitting on the fence trying to make up your mind, but rather, it's a time to go out and select your new home.

So many people always say that they want to buy at the bottom of the market, but the problem is the only way to know you're at the bottom is when it's on the way back up... which means you missed the bottom. New home sales across the nation have increased for the last four months in a row. Inventories in the big cities like Phoenix and Los Angeles which are our feeder markets, are being eaten up by buyers. Those are all signs that we have hit the bottom and are going the other direction. I don't think any sane person out there feels interest rates can stay this low when the federal government is running a deficit like it is right now. Interest rates will have to go up and they will be forced up by the huge deficit spending. Nobody is talking about a balanced budget in Washington so that will continue to drive rates up and keep them up. It's back to that same concept: The time to buy is now, it will only get more expensive in the future.

Buying real estate in Durango has long-term been a very good investment. I don't see any reason why that will not continue. People live in Durango because they want to live in Durango, not because they got transferred here because of their job. It's not like a job transferred or Detroit (now I can say this because I was raised there) where you might even consider quitting your job just so you didn't have to take the transfer. People want to live here because of all of our outdoor activities, the great feel of the town, the natural beauty of the mountains around us in because the people are so friendly. We offer a diverse cross-section of real estate, with everything from modular homes on acreage to 8000 ft.² mansions in the mountains. And there are lots of homes in between of course. It is our job as Team Lorenz to help you find just exactly the right property so that you'll be able to have that Durango Colorado real estate experience. Please give us a call and I'll set you up with one of my two buyer agents who for the third year in a row have successfully taken more buyers to the closing table than any other agent, mega agent, or team in the entire County. They know the inventory and they'll find you your home.