End of Year Sales Statistics

Talk about a roller coaster ride! I'm not sure I've ever seen any year quite late 2009 before, as it relates to Durango real estate. As everybody knows, the sales volume was down in almost every market around the country. Durango's real estate market followed that trend but was certainly not nearly as bad as many markets which were predominantly foreclosure sales and bank owned properties. The "tide" was down all across the country, and our boat was caught in that tide.

In my blog article at the end of the third quarter I told you I was beginning to feel positive and I'd give you a firmer prediction at year's end as to which way the Durango real estate market is going. Rather than look at numbers on a static basis, I like to look at the trends and see which direction the numbers are moving. That gives me a much better sense of "predicting" the future. I've done a ton of analysis and here are some of the thoughts that I have. At the end of the first six months of 2009, La Plata County residential sales volume was down 45% from last year; at the end of nine months of 2009, the volume was down 37%; and at the end of the year 2009 volume was down only 22% compared to 2008. That shows me that the last half of 2009... in particular the last quarter... was making good headway in catching up to the very slow start to 2009.

In my third-quarter blog article, I discussed absorption rate at length. Remember that that rate is the period of time it would take all active listings to be sold, assuming no additional properties come onto the market based on the current rate of sales. That is, it is a reflection of how many homes are currently for sale and how many homes per month are selling. Generally speaking, a faster absorption rate reflects an improving market. For the first six months of 2009 residential absorption rate for all price categories of $100,000 and above in La Plata County was 3.29 years; at the end of nine months it dropped to 2.68 years and at the end of the year was down to 1.5 years. Again, this is another trend going significantly in the right direction.

The last quarter of the year finally saw the higher-end properties begin to come out of their doldrums. Through the first nine months of '09, 10 homes priced at $1 million and up had sold; by the end of the year 18 of those homes had changed hands. In the $800,000-$1 million price bracket, 7 homes sold during the first nine months but by the end of the year 14 had sold. In the $600,000-$800,000 price bracket, 20 homes had sold in the first nine months but by the end of the year 35 had sold. That clearly is a very good rate of increase in sales volume in those higher-end properties.

Areas that did not show improvement the sales price to list price percentage. Let's say you listed your home for $100,000 and sold it for $97,000. That sales to list price percentage would be 97%. Through the first six months of ‘09, that ratio was 96.8%; by the end of nine months it was 94%; and when the year concluded, it dropped to 93.3%. Pretty clearly sellers were willing to negotiate more in order to get their properties sold. Another measuring stick that I look at is median days on the market. It's a little different than absorption rate in that this simply says for those properties that did sell, how long did it take them to sell. Again, through the first six months, median days on the market was 115 days; by the end of nine months it had risen to 144 days; and by the end of the year it was 158 days.

One of the most significant changes was in the number of units currently available for sale. Again, this is strictly residential, priced at $100,000 and above, and only in La Plata County. Inventory at the end of six months was 1382 units; at the end of nine months it had dropped to 1333 units; but at year's end that number was all the way down to 854 units. That is even lower than at the end of 2008 when the available inventory was 1004 units. That is a very significant number of units that are not currently available and figuring out why they are not is a challenge. Partly, some sellers have clearly become discouraged and decided to simply take their property off the market in hopes of the market coming back. Another part of that slack is taken up because more properties sold in the last quarter of ‘09, thus reducing inventory. And thirdly, I believe some sellers have put their homes on the market as rental properties as we have certainly seen an increase in the number of rental homes available at this time of year.
Next week I will be able to post the spreadsheet for the full year statistics. Remember that on my website, www.BuyDurango.com I have posted previous spreadsheets. Here is a link to that page in my website: Durango Real Estate Statistics.

If you are a seller, then this information should be fairly encouraging to you especially when you realize that there's a lot less competition out there right now. If you are a buyer that has been sitting on the fence, I think most people can see that it's time to get off the fence. In spite of what we hear out of Washington DC, qualifying for a loan can be a challenge today. Our team members here would very much like to help you get connected to a good local lender who can start you in that process. Own qualification takes longer now than it did six months or a year ago. With the first-time home buyer tax credit having been extended as well as the creation of a new tax credit for home buyers that previously owned homes, we feel that those two market segments will have increased activity and thus more competition for a fewer number of properties. With more people chasing less properties, it is basic economics that teaches us that prices should rise in that market segment.

Team Lorenz is here to help you and we certainly look forward to a call from you.