Durango Comparative Market Update $200,000 to $499,999.

Who last week I blogged about residential sales in the price range of $500,000-$1,000,000. This week I want to talk about homes selling between $200,000 and $499,999. As you know my goal is to give you an accurate picture of the real estate market not necessarily a rosy picture of pure optimism. While last week's data is pretty optimistic, this week's data is not quite so good.

All of my sales figures were taken from the Durango Area Association of Realtors MLS and I used January 1 through December 3rd for each of the last three years as my data collection dates. I did an analysis of Durango in-town homes for each of those three years as well as rural homes not within the city limits of either Durango, Bayfield, or Ignacio. Residential units consisted of: freestanding homes, condos or townhomes, as well as mobile or modular homes.

Let's start with the Durango in-town home sales. In the year 2005, there were 253 homes sold. In the year 2006 that number dropped to 195 homes and in 2007 that number bumped up slightly to 198 homes. From ’05 to ‘07 that would be a decline of 21% in the number of units sold. Interestingly, days on the market, dropped from 234 days in 2005 to only 151 days in 2007. Generally, if the market were going bad days on the market would increase not decrease. What percent of the ask price a property sells for is also a good indicator of what's going on in the market. Generally in a bad market sellers are willing to negotiate quite a bit more. Three year period from 05 through December of 07 that ratio is only changed slightly from 98.96% to 97.85%. I pulled some additional numbers you can review by looking at this spreadsheet below.



The La Plata County rural homes sales from $200,000 to $500,000 are where we've really seen the big change in our real estate market in Durango. In 2005, 415 units sold and that number dropped to 308 units in 2006. Sales dropped again to only 245 units in the year 2007. That is a decrease of 40.96% over that three-year period of time. The number of days on the market has stayed pretty steady, going from 148 days to 138 days and then back up a little bit to 142 days in ’07. Other important statistics can be seen in the spreadsheet.

What kind of conclusions or observations can be drawn from these figures?
It is very clear that the number of units sold in this price range is down fairly significantly since 2005.
The in-town market is stronger than the rural market as indicated by the better days on market figure and the number of units sold statistic.
Durango area sellers do not negotiate very much on their sales price which can be clearly seen by the sales price to list price percentage figures.
The decline in country units sold from ’05 to ‘06 was 25.78% but the decline from ’06 to ‘07 was only 20.45%, a slight improvement. When you review the figures for the in-town units, the decline from 2005 through 2006 was 22.92% while the change from 2006 to 2007 was actually an increase of 1.54%. This may show that the market has already bottomed out for in-town homes and is on the way back up. It's a little hard to tell, but it is possible that the rural properties could bottom out in 2008 and begin their recovery as well.
All of that said, I think a person needs to look hard at the fact that investing in the Durango area is still a good solid venture. The median price of a home, whether you are buying in the city or in the county, has increased from the year 2005 to the year 2007. We are not seeing the actual declines in market value like you see in Greeley or Aurora or other cities across the nation. I've talked about this previously, and it is important to acknowledge that the subprime mortgage market is just not a factor in Durango real estate. Check out one of my previous blogs that indicated that through September of 2007 only five properties had gone all the way through the sale process as part of a foreclosure in our county this year. It's pretty easy to agree that that figure is so small that it is of no importance here.

Even though prices are not falling, just in the last two weeks interest rates have come down one half percent which is a significant reduction in a monthly payment. He still have sellers who want to sell and this might what you hear in the national media, there are loans out there available to our clients. I would be happy to hook you up with one of our great loan officers who can take you through the process. The rental market is still very strong in Durango and Bayfield and this may be a good time to buy a rental property in the $200,000 to $300,000 price range. With a good down payment these can be made the pencil.