STATE OF THE DURANGO REAL ESTATE MARKET

Much has been written and publicized all across the country about the condition of the real estate market. We hear stories of prices dropping on many homes, builders giving huge discounts or incentives in order to get their properties moved and a rise in foreclosures. I think it will be helpful to let you know what is going on here in La Plata County.

It is true that there are a decreased number of units being sold in our market. We have not seen a drop in the sales price of these homes, however. In homes priced at approximately $500,000 and up, that market has been pretty steady. While there is a slight decrease in the number of units sold the average sales to list price still remains high and there are buyers out there for those types of properties. The $200-$350,000 home is a different story. People buying the $200-$300,000 homes tend to be first-time homebuyers and as such do not have large down payments. Many first-time homebuyers are younger and may have lower credit scores than the lenders would like. These are the very candidates who are getting the sub-prime loans or the Alt-A loans that I've spoken about before. Since the mortgage lenders have tightened up so much on these loans, the potential buyers are finding that they no longer qualify for a loan. That takes that buyer out of the market and puts them into the market as a tenant or a renter. This last year has seen rents rise in both Durango and Bayfield and vacancy rates fall. At the same time the person who was the seller of the $200000-$350000 home that has not been able to sell, was going to be the buyer of the $400-$500000 home. That's the idea of trade up buying. Since trade up buying has not occurred, we see a lagging market in the $200,000-$500,000 price range. In the over $500,000 price range, those buyers are still coming to Durango and are still buying. These tend to be Baby Boomer buyers who have been saving up for years knowing that Durango was where they wanted to retire. Many of these buyers pay all-cash or take out very small mortgages so the sub-prime issues don't affect them at all.

I'm kind of a numbers guy who enjoys analyzing sales statistics and then trying to determine the trends and the historical significance of what just occurred. For the most part I accumulate these numbers every month and also keep year-to-date figures. This kind of information certainly helps me to get a good feel for the Durango real estate market and I would be happy to share that information greater detail with you. Please give me a call.