$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